A $200 million real estate development along the edge of Arlington International Racecourse is heading into the final stretch, with plans to build an entertainment complex, hotel, restaurants and hundreds of new apartments around a former hotel and water park.
Springbank Real Estate Group is finalizing deals to bring a 10-screen Cinepolis luxury movie theater and a First Ascent Climbing & Fitness facility to the Arlington Downs development just west of the horse racing park in Arlington Heights, Springbank CEO David Trandel said.
It would be a significant change for a large development site that has been largely untouched for years. The former hotel has turned into an apartment tower and the water park has sat vacant for eight years.
The retail leases are part of a new phase of the Arlington Downs development, which is expected to include an approximately 100-room hotel, as many as 443 apartments, new restaurants and conversion of the shuttered water park into an indoor adventure facility.
Major plans for the site seemed like a long shot in 2009, when a hotel and water park on the site at Euclid Avenue and Rohlwing Road shut down after the U.S. financial crisis. The real estate market is much stronger now, but grappling with large retailers such as Macy’s, Sears and J.C. Penney closing stores as they struggle to adapt to e-commerce competition.
Arlington Downs’ retail leasing is a glimpse at the entertainment-driven model many real estate experts predict will shape future retail developments.
“It’s all about the experience now,” Trandel said. “The big-box days are gone. It used to be that theaters could piggyback off the department stores. Now it’s theaters and experiences that are bringing in the traffic.”
Arlington Heights will be the first of potentially several Chicago-area theaters for Cinepolis, a Mexico-based company with about 500 locations in more than a dozen countries, said retail broker Kevin Boyd, a senior vice president at SRS Real Estate Partners. Boyd is representing Cinepolis in the Arlington Heights deal, and is also the leasing broker for Springbank’s retail project.
Cinepolis is known for luxury features, including extensive food and drink offerings that are delivered to customers’ seats. The chain is wrapping up a lease for a 42,000-square-foot building that Springbank will build near the existing apartment tower, Boyd said.
Also close to finalizing a lease is Chicago-based First Ascent, which plans to lease 30,000 square feet of the former water park for rock-climbing walls as high as 55 feet, a fitness center and yoga studios, said Jon Shepard, one of the company’s founders and owners. It will be the first suburban venue for First Ascent, which opened in Chicago’s Avondale and Uptown neighborhoods in 2015 and plans to open in Humboldt Park within two months.
“We have been looking in the suburbs for over a year,” Shepard said. “When this opportunity came along, it just seemed like there was a lot of synergy with the developer’s plans. People can come and climb and stick around for dinner, drinks or a movie afterward.”
Springbank is seeking an indoor children’s play concept to use the remaining 16,000 square feet of the former water park structure, Trandel said.
With entertainment tenants in place, Chicago-based Springbank plans to ramp up efforts to add restaurants to the site, he said.
Retail deals are a key step in reviving the site where the Sheraton Chicago Northwest hotel and adjacent Coco Key water park went belly-up under different owners.
Springbank was part of a venture that bought the shuttered hotel and water park in 2011 and converted the vacant hotel building to a 214-unit apartment building called One Arlington, which opened in late 2015. One Arlington is more than 91 percent leased, Trandel said.
Chicago-based CA Ventures and Barrington-based Stoneleigh Cos., the latter of which developed One Arlington along with Springbank, will join Springbank in a venture to build as many as 443 apartments in Arlington Downs, likely in two or more phases, Trandel said.
The developers also plan a hotel with about 100 rooms, said Trandel, who declined to comment on a likely brand.