ST. CHARLES – Visitors to Charlestowne Mall have few places to spend their money.

Outside three department stores and cinema, tenants include a shoe store, an eyeglass store, a cellphone shop, some kiosks, a dollar store, a nail salon, a hair salon and a children’s clothing store.

A recent market study conducted by Melaniphy & Associates estimates Charlestowne Mall generates about $58 million in sales – an amount the study concluded could more than double by 2017 and more than triple by 2022, if certain steps are taken.

The city recently received the full retail market feasibility study, which sought to determine future retail alternatives for the mall and the actions necessary. John Melaniphy, president of Melaniphy & Associates, gave a brief presentation on his findings to the Planning and Development Committee in June.

Aldermen had criticized his presentation, saying the conclusions – that the mall needs new ownership, a new image and new attractions – were findings they didn’t need a $24,750 study to tell them.

While the report didn’t provide “earth-shattering” conclusions, its comprehensive nature is helpful and could be used in new marketing materials, Economic Development Director Chris Aiston said.

“It tells you basically the St. Charles area – let’s say the population within a 15-minute drive time – A. has an awful lot of buying power [and] B. … Those sales are not being made in St. Charles.”

City administrator Brian Townsend said the study did a good job of injecting some economic and market reality into the thoughts and ideas expressed in recent years. It also indicated there is a market for retailers the city once believed were a stretch for St. Charles, he said.

“It really shows the potential and the prospective success that could be there if the owners just invested some time, money and effort,” Townsend said.

THE STATE OF CHARLESTOWNE

Open since 1991, Charlestowne Mall, 3800 E. Main St., has about 1.1 million square feet, which includes about 850,000 square feet of tenant space.

Although it once had more than 120 tenants, the study found about a dozen occupants remain, including anchors Von Maur, Carson’s, Kohl’s and Classic Cinemas Charlestowne 18.

Multiple factors have contributed to the mall’s struggle to maintain sales and tenants, including poor management, the economic recession and the loss of retailers to shopping centers along Randall Road, which generates an estimated $1 billion to $1.5 billion in retail sales, according to the report.

“Following the mall’s loan foreclosure, tenants who wanted to stay in the mall were often ignored regarding lease renewals or extensions and thus forced to exit the mall,” the report states. “Randall Road and, more specifically, Geneva Commons offered mall tenants an alternative lifestyle shopping center with generally lower rents and costs.”

Additionally, the report found Charlestowne Mall is too big for the market, a problem compounded by nearby big-box stores. About 107,778 people live within five miles of the mall while other nearby malls – Fox Valley Mall, Stratford Square Mall, Woodfield Mall, The Promenade, Oak Brook Center and Yorktown Center – have more than 200,000 people.

This lower population density had been partially offset by St. Charles’ higher household incomes.

“The recession and Randall Road has changed that with more emphasis on price and value, resulting in an exit of more retail stores,” the report states.

IMPROVING CHARLESTOWNE

Melaniphy & Associates seem to have found potential in Charlestowne Mall. With the exception of the Geneva Commons lifestyle center, the mall is not in direct competition with other major malls. Also, it noted Randall Road is “overbuilt and in many areas struggling to generate retail sales.”

Problems, however, lie with the mall ownership, according to the study. A group of California-based investors purchased the mall in 2010. Signs at the mall suggest changes – including a seafood and sushi buffet and an ice rink – are being planned.

“Get ready, St. Charles,” the signs read. “Great things are coming.”

The study describes those promotions as empty promises and asserts the mall needs an aggressive developer or owner who will invest money into the shopping center and give it a new image.

“Existing ownership has done virtually nothing to improve tenant interest in Charlestowne Mall,” the report states. “The promise of an ice skating rink was merely that, an unfulfilled promise.”

St. Charles residents shop at Oak Brook Center and Woodfield Mall, indicating such shopping centers would succeed here. Aiston said Charlestowne Mall has only one department store – Von Maur – that is scarce in the Chicago area, and it needs to have a mix of tenants that make the mall a destination.

Melaniphy & Associates recommends removing the Sears concourse, halving the amount of specialty store tenant space.

In Sears’ place, the firm suggests adding a Mariano’s Supermarket or similar unique grocery and pairing it with such box stores as Half Price Books, Gordman’s, TJ Maxx, Abt Electronics, Woodman’s and a major fitness center.

Other suggested actions include adding entertainment venues like Dave & Busters, improving the food court, creating a restaurant area near the cinema, increasing the mall’s visibility from the road and re-leasing the mall to previous specialty tenants with a focus on a younger audience.

“After the new owner/developer demolishes the Sears concourse and implements the recommended actions, we expect sales at the mall to rise to an estimated $143,700,000 in 2017 and $180,000,000 in 2022,” the report states.

City officials acknowledged they have little power to effect change.

“We’re kind of the minority partner in this deal,” Townsend said.

However, Townsend said, St. Charles officials can put additional pressure on the owners to encourage them to move forward with the mall or sell it.

Aiston said he has sent the owners the study electronically, and the owners acknowledged they received it. Dialogue between the city and mall ownership has increased in recent months, and the owners are starting to realize something must be done with it.

The mall has a limited revenue stream and costs associated with maintenance, utilities and taxes, Aiston said.

“No matter how much money anybody has, at some point you want to stop the bleeding,” he said.

Mall ownership did not return a phone message by press time. The owners also did not attend a visioning workshop about the mall last week, but a representative of Sperry Van Ness, the listing broker for the mall, did.

Neil Johnson of Sperry Van Ness said he was pleased by the participants’ energy and imagination, but most of the suggested improvements would cost millions or even tens of millions of dollars.

“The challenge, as for any business venture, is for the owners to make investments that will be profitable,” Johnson said. “As both a St. Charles resident, and member of the business community, I am optimistic that the property can again become a productive part of our community.”

For information about the Melaniphy report, contact the city’s Economic Development Department at 630-443-4093 or econdev@stcharlesil.gov.