Calumet City officials have initiated steps to take control of a distressed shopping mall following stalled negotiations with its owner.
The city plans to acquire portions of the River Oaks Center mall, at 96 River Oaks Center Drive, through eminent domain, the Chicago Tribune reported.
Namdar Realty Group, led by founder and CEO Igal Namdar, has owned the 1.4 million-square-foot shopping mall — the seventh-largest in the Chicago metropolitan area — since 2017.
In response to the city’s negotiations, Namdar presented his own valuation of the property, claiming it is worth $40 million, or $28.50 per square foot. However, the city strongly disagreed with the owner’s valuation of the center, prompting officials to consider alternative actions.
“I don’t think there’s anybody in this room that thinks that River Oaks mall in its current state is worth $40 million,” Mayor Thaddeus Jones said.
The city has agreed to make a final offer of $13.2 million, or a little under $9.50 per square foot. Jones is skeptical whether Namdar will accept the offer, which could force the city’s eminent domain actions.
Negotiations with New York-based Namdar came to a halt this summer, after the owner backed away from a deal to sell for a price in the $4 million to $7 million range, which would be $2.85 to $5 per square foot. The mayor indicated Namdar was asking $10 million, or $7.14 per square foot, at the time.
Alderman James Patton, the only dissenting voice regarding the city’s plans for eminent domain, cited concerns about finding a developer for the 58-year-old mall.
“You have to understand that for us to consider taking such a drastic action like this, there has to be some viable developer lined up, or multiple viable developers lined up, to do something,” Patton said. “Because if we step in and we take this action, then if there’s no developer there, the city’s saddled with the mall. There’s not a single person in this building that’s qualified to run a mall.”
Jones said two developers have already expressed interest in the project. The city unveiled a $110 million plan for the site in July, which would integrate retail, dining and residential spaces. A key feature of the proposal is a three-level go-kart track from Supercharged, a company based in New Jersey.
If the city moves ahead with eminent domain, it would need to ensure fair compensation to Namdar and support tenants in relocating. Approval from the Illinois General Assembly would also be required, which Jones aims to address during the November veto session.
— Andrew Terrell
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