Why it takes time to build timeless centers
The pandemic lit a fuse in the world of retail real estate. Societal flows changed overnight, disrupting conventional traffic flows at centers. Redevelopment plans for B-and-C-market centers flourished. A-market malls turned themselves inside-out with outdoor entrances for key tenants and added green spaces and restaurant rows.
Quick makeovers, however, do not necessarily result in long-lasting, commercially successful retail properties. At Cullinan Properties, we started developing mixed-use properties in the 1990s. Our Levee District in East Peoria, Ill., the former brownfield site of a Caterpillar tractor factory, has in time evolved into a new neighborhood packed with retail, grocery, restaurant, office, and civic uses.
We believe in working closely with municipalities to create projects that add dynamic new elements to their towns. That result can only be achieved with careful calculation and ongoing observation. We are an extremely patient company. A dedicated investment in time, we have learned, is what provides long-lasting value for both tenants and towns.
In the southwest Chicago suburb of Joliet, Ill., we are currently building RockRun Collection, a 310-acre super-regional mixed-use development that will include 500,000 sq. ft. of retail and restaurants and 160,000 sq. ft. of entertainment along with office, hospitality, and multifamily. It will service a total trade area where numbers are expected to rise tremendously. The population of Will County, of which Joliet is the county seat, is expected to grow more than 75% by 2040.
Within the next two decades, this trade area is destined to morph into a region that can’t be succinctly imagined as yet. Our plan for RockRun, then, is not to build out a million square feet all at once. We are now building Phase 1 with a focus on entertainment. Our anchor will be Penn Entertainment, which has signed on to build a $185 million Hollywood Casino. Several other national entertainment brands and restaurant chains have shown interest, as well. These will be the tent-pole tenants.
Traditional retail will come next, and we’ve been talking to big-box retailers that are not currently part of the Joliet community. Retailers today spend a lot of time cultivating their concepts and they are looking for developers that, likewise, spend time cultivating their center environments. When they find well-thought-out developments that fit their brands, they are eager to join the party.
The same is true with restaurant chains, though it is key for us to include top local restaurants in a development as massive as this one in order to make it part of the fabric of the community. One of our goals is to build a center that locals will embrace as their own.
Learning what local communities want and what local municipalities need takes time. We’ve worked with the mayor of Joliet for 8 years on RockRun. That long-term, focused community involvement resulted in the recent installation of an interchange that provides direct entry from I-55 into RockRun. Currently, projected traffic of 230,000 vehicles per day from Chicago, central Illinois, Iowa, and Indiana pass the site, and that volume is sure to increase once RockRun and Hollywood Casino open.
Municipalities that find themselves at the center of landscape-changing population growth are being very thoughtful about what their communities might become 20 or 30 years down the road. When considering what they might do with the current RockRun site, the municipal leaders of Joliet decided not to take the quick and easy route and fill it with rows of new warehouses. They brought us in and asked us to be thoughtful, to be creative, to build a project that would unlock the potential of Joliet as the key draw in a rapidly expanding suburb of America’s third largest metropolitan area.
They asked us to take 310 acres of farmland and turn it into a retail, entertainment, and residential hub. Eight years later, the plan we crafted is on paper and looks great. Now it’s time to execute it. But slowly and carefully.
Matthew Beverly is the CEO of East Peoria, Ill.-based Cullinan Properties.