At a crossroads

Delay of Calhoun Square redevelopment frustrates Uptown business community

CARAG-A delay in the much-anticipated redevelopment of Calhoun Square has frustrated Uptown business owners, many of whom rely heavily on the center’s ability to draw customers to the area.

“How they do is a direct reflection on how we do,” said Brad Birdwell, general manager of Old Chicago at 2841 Hennepin Ave.

Birdwell said business has been down at the restaurant during the past couple of years. Other business owners in and out of Calhoun Square have also seen a slump in business recently and point to the weakened shopping center as at least part of the reason.

Calhoun Square property owner Principal Financial Group would have liked to start construction of the mixed-use project last spring, but working out the development’s details took more time than anticipated, said Joe Pierce, regional director of real estate for the company. The city approved the final site plan for the $75 million development in September. Pierce said construction is now scheduled to begin this spring.

Plans call for 83 condominium units and an extensive retail revamp, but a soft housing market has caused Principal and development company Solomon Real Estate to reevaluate whether the center will include condos, apartments or something else, said Jay Scott, a principal of Solomon.

“We’re strong advocates of trying to complete the project the way it’s been approved,” he said. “It really comes down to making decisions based on the market.”

Indecision has resulted in short-term leases for many of Calhoun Square’s tenants, and several have come and gone in recent months. Vacant spaces, dwindling foot traffic and uncertainty of the center’s future have concerned existing tenants, though business hasn’t been bad for all of them. Most just want answers.

Dan Vargas, owner of the trendy men’s clothing store Atmosfere, said business has been OK, but he hasn’t received any word from management about Calhoun Square’s future.

“We all want to know what’s going on,” he said. “But no one’s telling us right now.”

Darrel Besikof, who has operated Bay Street Shoes since Calhoun Square opened more than 20 years ago, was also frustrated with a lack of communication.

“I’ve been negotiating for a long time for a bigger, better new store,” Besikof said. “I thought we were getting close to a deal, but then everything just stopped.”

Besikof said business at his store has dropped off every year since about 2002. He’s a big fan of the planned Calhoun Square project and is hopeful it will come to fruition soon. He wants to stay in the center but said it needs to be revitalized.

“This building hasn’t kept up with the times,” he said. “And this holding pattern is not healthy.”

The loss of good tenants such as Borders Book Store and an increasing number of vacancies has also been painful, Besikof said.

Tom Ford, former co-owner of Caruso’s Gelato Café, closed his store in Calhoun Square this month. He sold the business to another company that didn’t want to maintain a store in the center, but he said the café wasn’t making enough money to support itself regardless of who owned it.

Ford said he got along great with management at Calhoun Square and thought the project was on the right track. “It’s just taken them a while,” he said.

Ford’s café is the latest vacancy in the center, and more will follow – Estes Uptown News plans to close soon, as does Orr Books, which has to move because its space will be reconstructed for the new development.

Anne Knuth, director of Leasing and Development for Calhoun Square, said she could not negotiate long-term leases until the project’s details and timeline were set. She said vacancies have been difficult to fill because many tenants don’t want to sign short-term leases. Experimental companies and startups are more likely to move into the empty spaces, she said. Solomon has been in talks with larger tenants who are interested in moving into the center when construction is complete, she said.

Several Calhoun Square tenants, such as high-end eyewear store Eyedeals and the popular restaurant Figlio, report strong sales. But their owners would like to see the project move forward for the good of the area, which is on the verge of many changes outside Calhoun Square. Gap is scheduled to leave Uptown next month. Property co-owner Ruth Weisberg said she was working closely with two prospective tenants.

Construction of the major hotel and condominium development Mozaic at Lagoon and Fremont Avenues is also planned to begin this year. Clark Gassen, president of CAG development, which is developing Mozaic with the Ackerberg Group, said the project would revitalize Uptown. The Calhoun Square redevelopment would contribute greatly to that revitalization, he said.

The Uptown Business Association recently decided to send Principal, a large insurance company that owns property throughout the country, a letter expressing the concerns of area businesses. Association members said Calhoun Square is just a “blip on the radar” for such a large company, but they hope to get across what the project’s stagnation is doing to many Uptown businesses.

“The delay is having a dire affect on Uptown as a whole,” said Mike Finkelstein, a longtime active broker in Uptown and a member of the Uptown Business Association. “But Principal hasn’t been confronted with the impact. One of the strongest things we can do is let them hear from the businesses just how important Calhoun Square is.”

City Council Member Ralph Remington (10th Ward) said he would also write a letter and has urged neighborhood organizations to do the same. The business association has discussed meeting with Principal after the letters are sent.

Robert Sorenson, owner of Bobby Bead at 2831 Hennepin Ave., said he’d like to see Calhoun Square’s redevelopment breathe new life into the area.

“Until Calhoun Square is successful, it will continue to drag down retail in Uptown,” he said.