In its efforts to remake the long-dormant West Dempster Street business district, north suburban Skokie has landed a sweet prize in bringing a new Oberweis Dairy to the area.
But it's not just another of the successful chain of ice cream parlors that will set up shop at Skokie Boulevard and Dempster Street. In addition to the familiar dairy store, of which there are 46 in four states, the Skokie retail building will have a quick-serve restaurant, a new concept for Oberweis.
“In my long career here at the Village of Skokie, seldom have I taken the podium and been more excited to announce a development plan,” said Skokie Economic Development Director Tom Thompson at Wednesday's Village Board meeting. “This has been awhile coming. This is what TIF (tax increment financing) and economic development are all about.”
Village Trustees Wednesday approved preparing an ordinance for the sale of property at the busy intersection. The ordinance will come back to the Village Board two more times, and the Oberweis plan is expected to go before the Plan Commission over the summer.
The project must be considered a big win for the village, which only in the last couple of years has bought up several dilapidated business properties on West Dempster Street, set up a TIF in the area and engaged in the longest eminent domain case in the village's history there.
That controversial case was settled only last year when long-standing Value Transmission at 4829 Dempster St. was forced to relocate to the south on Skokie Boulevard, clearing the way for Skokie to market the property alongside adjacent property to the east it already owned.
Village officials had said all along that because of the small size and atypical shapes of the two properties, they had to be marketed together if Skokie was to have real success.
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Oberweis is expected to open at the new address of 4811 Dempster St. — a combination of the previous two parcels — in the early spring of 2012.
But what also has village officials excited is their belief that the new development will draw more companies to the area.
“We believe this represents the shot in the arm that the West Dempster Street corridor needs,” Thompson said. “The Oberweis name is recognized throughout metropolitan Chicago as a very high quality retail establishment serving some of the best premium ice cream and dairy products in the area.”
Thompson said that the village aggressively marketed the site for the last year. Just in the last six months, he said, more than 500 marketing brochures and letters were sent to real estate developers, brokers and retailers promoting this and other properties on West Dempster Street.
But the village did not ask for the traditional requests for proposals (RFPs) because of developers' reluctance to engage in the process in a down economy.
“While many retail professionals are still guarded in their optimism due to the sluggish market and financing constraints,” Thompson said, “we have received fairly positive feedback on the redevelopment potential of this site.”
Oberweis was not the only company that showed interest in the site. According to Thompson, two “serious proposals” surfaced in the last few months as well as an unsolicited offer to purchase the property outright for $400,000.
The latter was rejected because use for the property was not known. Another proposal from a respected developer for a retail building on the site was also rejected because the developer would not offer any land payment and wanted additional TIF assistance for site work, Thompson said.
The village purchased the two original properties at Dempster and Skokie Boulevard for nearly $1.7 million, demolished the buildings and is currently completing environmental cleanup on the Value Transmission parcel since a gas station was located there at one time.
Thompson said Oberweis should produce “substantial property and sale taxes” making the village's investment pay off.
The proposal calls for Oberweis to pay the village $400,000 upfront for the property and then annual land payments over 10 years based on 5 percent of on-site sales that exceed $1 million a year.
CEO Joe Oberweis said that a traditional dairy/ice cream store generates $1.25 million to $1.75 million a year but this prototype — with the new quick-serve restaurant — could generate $1.75 million to $2 million or even more.
The village has estimated that land payments could be about $487,215 a year in addition to property and sales taxes the retailer will generate.
The company originally considered a site on Golf Road near Westfield Old Orchard before zoning in on the West Dempster Street vacancy. In the end, Joe Oberweis said, the Dempster-Skokie Boulevard property was better suited for a 4,000 square-foot drive-through building that needed to be larger than the company's usual store.
“We think it's a great match for both the village and us,” Oberweis said.
More details about the quick-serve restaurant will be forthcoming, he said, but village officials said Oberweis will specialize in hamburgers, chicken sandwiches, french fries and other food cooked to order but served quickly.
“We've been working the concept (of the quick-serve restaurant) for a long time,” Oberweis said after the Village Board's action. “Finding the right location is a significant challenge. There's also a risk so we wanted to make sure we're lining up an outstanding location and not settling for just an OK location.”
Oberweis opened its first retail store in 1951 in Aurora and now has stores in Illinois, Missouri, Indiana and Michigan. The two closest stores to Skokie are in Lincolnwood and Glenview.
“I patronize your store on Lincoln Avenue in Lincolnwood,” Trustee Randy Roberts said. “I look forward to being able to do so in my own village here. I think this is going to be a real turning point for our Dempster Street.”
Trustee Michael Lorge said the new retail acquisition should send “a great signal” to others about the potential for lucrative development along one of Skokie's busiest streets.
