Most of the old Bergner’s store is coming down. The north end of Peru Mall that once housed JC Penney is staying up. Mall owners have no current plans for the former Sears space because they don’t own it yet.
Starting next year, Peru Mall will look very different. The Peru City Council has OK’d a partial tear-down and rebuild that will turn the mall into a retail-housing mix.
That’s not to say that existing tenants such as Marshall’s, Bayou Express and JoAnn Fabric will be shown the door, however.
“Everyone is invited to stay,” said Andy Patras, director of development management for GK Real Estate, the mall’s owner. “We’re trying to accommodate everyone who wants to stay.”
It’s an ambitious project, and whether it happens depends on whether GK Real Estate and the city of Peru can hammer out a redevelopment agreement. No agreement, no deal.
However, the City Council advanced the project Monday with a 7-1 vote approving assorted variances and petitions needed for GK Real Estate to convert the mall into a multi-use facility with apartments, restaurants, a cinema and more than a little greenery. To make way for “The Crossroads at Peru,” a residential-commercial mix, about half the mall will be demolished to make room for free-standing buildings and apartments.
Alderman Aaron Buffo cast the lone no vote.
“I do not think any housing should go up there,” Buffo said. “I don’t think it’s the right location for it.”
Buffo wasn’t the only skeptic. Alderman Mike Radtke said he, too, had misgivings about whether GK can fill 100-plus units.
“I think the alternative is the mall is going to fail and someone will have to pay to tear it down,” Radtke said. “I’ve been to that party before.”
Alderman Tom Payton said he voted yes based on the promise that a redevelopment agreement acceptable to both sides would be hammered out later. GK representatives said the lack of such an agreement was a deal-breaker for them, too.
“GK won’t proceed without a redevelopment agreement,” attorney Mary Riordan said. “We’re kind of partners in this.”
Final details may be pending, but GK has pitched the complex as an all-in-one site for dining, shopping and three-story residential buildings containing one- and two-bedroom apartments. GK intends to market the units to “empty-nesters” and young professionals, which should produce fewer than a dozen new students at Dimmick Elementary. (Read more below)
GK Real Estate plans a live-eat-work-play model where “everything is at your fingertips when you walk out the door,” Patras said.
One of the keys, explained architect Andrew Koglin, is demolition creates outdoor space that will appeal to shoppers wary of going indoors amid the pandemic.
“We’re creating an open-air environment,” Koglin said, adding later, “In the post-COVID world, there is a sense of safety being outside.”
Other proposed features are a new “ring road” that parallels Route 251, plus a series of out-lots accessible via Route 251. The property will undergo a great deal of landscaping.
GK Real Estate cleared the first hurdle Thursday when the Peru Planning/Zoning Commission recommended approval of multiple variances and rezoning petitions. The full Peru City Council has now adopted those recommendations, but construction won’t begin until late spring 2021.
Developers estimate they’ll need 10 months to get through the design and construction documents. Once permits are in hand, construction will take 16 to 17 months.
One of the moving parts is the Sears building. Riordan said GK has every intention of buying it, but Sears is effectively defunct and GK has trouble even getting someone on the phone to negotiate. GK might ask the city to use its eminent domain powers to take the building as a last resort.
Dimmick Elementary raises red flags
One potential snag for GK Real Estate is the Dimmick Elementary School District, which is wary of admitting new K-8 students without new money coming in.
Dimmick superintendent Ryan Linnig asked the GK representatives for a look at the projections showing fewer than a dozen children would take up residence at the Crossroads at Peru, which sits in Dimmick’s boundaries. At the close of business Monday, Linnig hadn’t seen the promised data.
It could be a sticking point between city and school district because Peru Mall sits in a TIF district, and Linnig said the limited revenues wouldn’t cover students’ tuition. Any more students than the projected dozen, and the school will have to make up the shortfall.
“The cost is then passed down to the taxpayers in our district,” said Sid Haas, vice president of the Dimmick school board, who addressed the City Council on Monday.
Alderman Mike Sapienza said the council didn’t have many fallback options beyond letting GK try its retail-residential projects.
“We need to do something,” Sapienza said.
Mayor Scott Harl proposed another alternative to Dimmick: Call Peru about renegotiating Dimmick’s boundaries, which extend well into Peru city limits.
“Take that back to your school board meeting: Give everything south of I-80 to Peru,” Harl told Haas.