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BY DEBRA GRUSZECKI
Times Staff Writer | Sunday, February 08, 2004 | (No comments posted.)
Economic development visionaries in Northwest Indiana are actively recruiting a company to build a lakefront shopping and amusement center in the region similar to Minnesota's Mall of America.
They describe their efforts as preliminary, but sources involved in negotiations said they are in discussions with officials from nationally known developers of malls and factory outlets in Indianapolis, Las Vegas, Minneapolis and Memphis, some that feature amusement attractions operated by the Disney Co.
"It's a big project,'' said Thomas McDermott Sr., president and chief executive officer of Northwest Indiana Forum Inc. "All I am able to say at this point is, if it happens, it would change the area forever."
Those involved are not sharing details about the six potential sites or the project, which could bring thousands of jobs to the region.
Mark McLaughlin, vice president of the forum, cautioned development still is in the planning stage.
"We're in the sales mode,'' McLaughlin said. "Basically, we're getting the word out in the development community that the time might be right'' for a major lakefront project, given U.S. Rep. Pete Visclosky's recent announcement of an initiative to redevelop the industrial lakefront as a recreational and entertainment area.
Visclosky's Marquette Plan calls for securing green, public space along Northwest Indiana's lakefront and dovetails with Chicago Mayor Richard Daley's efforts to redevelop Lake Michigan's shoreline in Illinois and deal with invasive lake species.
"The shoreline is changing,'' McLaughlin said, and the forum wants premier developers to be aware of this synergy.
Local visionaries hope to transform the lakefront by creating a retail, restaurant and entertainment venue similar to Chicago's Navy Pier, Baltimore's Inner Harbor or Cleveland's Flats Entertainment and Historic Warehouse districts.
Access to a deep water channel along the Gary shoreline could enhance the project.
Last November, Majestic Star Casino owner Don Barden offered a glimpse of what may come.
At the time, Barden repeated a $100 million commitment by his affiliate company, Gary New Century LLC, to build a four-star, 10- to 12-story hotel, convention center and outdoor amphitheater some say might carry the Michael Jackson name on Portland Lehigh Cement Co. land adjoining Buffington Harbor, where Majestic Star and Trump casinos operate.
In exchange, Gary Mayor Scott King pledged to build a marina near the gambling vessels and a railroad overpass to the property.
Gary New Century also plans to build a "city-within-a-city," featuring condominiums, a post office, library and museum in a village-like setting utilizing industrial buildings on more than 175 acres of Buffington Calcium Aluminate Cement Plant land that Barden's company acquired for $44 million.
Historical perspective
The lakefront sites reportedly in Gary and Hammond pose significant environmental hurdles, not the least of which is the cost to clean them. Several of the potential sites are laced with nearly impenetrable slag and are studded with industrial smokestacks.
But recent trends to retrofit industrial buildings and capitalize on an area's historic past could bode well for the region's lakefront development. One Web site, for instance, touts efforts in Germany to transform a blast furnace into a tourist attraction.
Despite the possible environmental issues, the area's potential as an historic site ripe for revival was discussed by those who visited the area in tour buses recently. In some places, buildings' remains still stand, as well as a strip of warehouses with loading docks and a big-wheeled grinder. Warehouse row could become an attraction similar to ghost towns out west, according to Barden's development team.
Elsewhere, a tall cement cast holding bin was described as having potential to become a museum or a bed-and-breakfast. Barden's team also talked about its ongoing efforts to acquire the USS Des Moines from the Philadelphia Naval Yard to relocate in Buffington Harbor.
The concept is not lost on U.S. Steel Corp., which owns property close to the harbor, sources said, or on development officials affiliated with Northern Indiana Public Service Co., another industrial neighbor with land holdings and a power plant in the area.
George Babcoke, general manager of U.S. Steel Gary Works, said he believes opportunity exists to redevelop lakefront land that includes portions owned by the mill. A majority of land owned by the steel company is not being used.
"As new technologies are developed, there is less need for larger facilities,'' he said. "We think there's an opportunity to return the land to viable use, to be a catalyst for economic development."
Before anything can happen, however, a public-private partnership needs to be developed, he said.
"That, certainly, is the stage we're at now,'' Babcoke said.
McLaughlin said six sites are potential locations for the mall and amusement venue, including the Gary New Century property, a site along Interstate 65 near Crown Point, and land in and around Buffington Harbor.
Others speculate the mall complex could land in Hammond, where a sales tax increment financing district was set up more than 10 years ago to try to land a major shopping mall and convention center on the shores of Lake Michigan or the banks of nearby Wolf Lake.
Fueling that idea is newly elected Hammond Mayor Thomas McDermott Jr., who has talked about the potential of the southern rim of Wolf Lake -- the northwest corner of 129th Street and the Indiana Toll Road -- as an entertainment and recreational destination. The mayor is the son of Thomas McDermott Sr., who was Hammond mayor from 1984 to 1992.
McLaughlin cautioned that sites remain undefined and a potential developer also could be elusive.
"Only one out 1,000 things really happen,'' he said.
Financing the concept
A high-profile architect from Las Vegas delivered a PowerPoint program here a year ago on a potential mall development, which included themed, interconnected walkways or streetscapes, sources said.
Based on their activity across the United States in recent years, some of the retail and real estate firms that could develop the lakefront mall include Chelsea Property Group Inc., Belz Enterprises and Simon Property Group Inc.
In Las Vegas, Chelsea last summer bought its competition - the 477,000-square-foot Belz Factory Outlet World. The same day, Chelsea opened the 435,000-square-foot Las Vegas Premium Outlets mall.
Chelsea, based in Roseland, N.J., wholly or partially owns 61 outlet and retail centers, including Lighthouse Place Premium Outlets in Michigan City.
Belz Enterprises, one of the South's largest commercial and industrial real estate developers, owns or manages mall properties in Nashville, Tenn.; St. Augustine and Orlando, Fla.; and San Juan, Puerto Rico.
Chelsea built Las Vegas Premium Outlets as a joint venture with Simon, which is based in Indianapolis and owns the River Oaks Mall in Calumet City.
Simon, which is the largest publicly traded retail real estate company in North America, also was part of the group that built Mall of America in Bloomington, Minn., and today owns part of it.
Simon, which sources confirmed is among contacts for Northwest Indiana's initiative, also helped build Circle Centre Mall in Indianapolis.
Circle Centre Mall, which opened in 1995 at a cost of $314 million, was the result of a public-private partnership that relied on the sale of city-backed bonds in 1988 and 1992, which totalled $187 million.
The bonds were backed with tax increment and sales tax increment financing.
Tax increment financing, enacted by the Indiana General Assembly in 1982, is a bond payback measure that relies on additional property taxes generated by new development within the project area. Sales tax increment financing captures a percentage of sales tax revenues within the project area to pay off the bonds.
Building a dream
Les Morris, a spokesman for Simon Property Group who said he has no indication the real estate firm has an interest in a mall development in or near Buffington Harbor, hails from this area.
"I've got family in Northwest Indiana and hope Gary rebounds,'' Morris said. "From that perspective, something like this would be great."
Months ago, King confirmed he might rely on sales tax increment financing to help advance Barden's New Century project. This could be a way for developers and local government to forge a public-private partnership to finance the lakefront mall complex.
Rick Mazur, president of Horseshoe Casino of Hammond who sits on the board of the Northwest Indiana Forum Inc., said the lakefront, which already attracts millions to the shore for gaming, boating, fishing, dining and beachcombing, has vast opportunity for investment.
The turnstile count from the four casinos in Hammond, East Chicago and Gary in December 2003, alone, stood at the 942,000 mark.
"Historically, this area was used for manufacturing, so there is an awful lot of space - mostly brownfields - which can be available for reclamation. The steel industry made it very clear its willingness to consider evacuating some of that land, and making that land along the lake available,'' Mazur said.
"While there is nothing in concrete,'' Mazur said the Buffington Harbor area is ripe for prospecting, given its proximity to commuter rail, the Gary/Chicago International Airport and interstate highways.
"We develop casinos, but if I was in the mall business, I would look for a parcel that best suited my needs -- whether it be in Gary, Hammond or anywhere else,'' Mazur said. "It's my hope that all of Northwest Indiana would get behind it and not let boundaries interfere with what's good for the region."
"There are not many places where you could be on a giant lakefront with the steel mills next to you, and the Chicago skyscrapers right across the lake," McLaughlin said. These are unique attributes that make Northwest Indiana a place people would want to come to."
Debra Gruszecki can be reached at dgruszecki@nwitimes.com or (219) 933-4158.
There reportedly are six potential sites for a lakefront shopping and amusement center in the region, including the land in and around Buffington Harbor (pictured below). The harbor is considered a ripe area for development based on its proximity to commuter rail, the Gary/Chicago International Airport and interstate highways.
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