Costco has agreed to lease an empty 16-acre parcel in the Illinois Medical District for its second store in Chicago.

Mark Jamil, counsel for the medical district, said the company inked the agreement on May 25. The site is bounded by 15th, Hastings, Ashland and the Chicago Transit Authority’s Pink Line.

Michael Stratis, of Oak Brook-based Intrepid Properties, which is spearheading the project, said a due-diligence process is now under way.

He said Costco must gain title to the land, survey its environmental conditions, change its zoning and apply for and purchase a building permit from the city, among other needed permissions.

“There’s 50 things,” he said.

“If everything goes perfectly, we’d open in the fall of 2011,” Stratis said, after a construction period that could start in June of next year.

Ald. Robert Fioretti (2nd), whose ward includes the land, said a recent community meeting that the city needed to lift a local liquor moratorium to clear the way for the store as well.

The new Costco will be located on high-traffic Ashland Avenue, as close to Pilsen as it is to other Near West Side neighborhoods, nearby medical institutions and the University of Illinois-Chicago. It will be located south of an existing shopping complex anchored by a Jewel-Osco grocery store.

Under terms of the lease, Costco agreed to pay the district $1.36 per square foot for the land, a rate that will be raised 7.5 percent every five years, according to Jamil. The 20-year lease includes eight possible five-year extensions.

Costco requires shoppers to purchase an annual membership to pick up their wares. It offers a wide-range of consumer products and food items on its shelves, and pays its employees relatively generous wages and benefits. The firm’s only other Chicago outlet is located at 2746 N. Clybourn; it operates four stores in the suburbs.

Jamil said the lease includes language requiring that at least 20 percent of the contractors working on the site preparation and the store’s construction be minority or women contractors.

There are no specific points in the lease about community hiring within the store, however.

The firm will work with city agencies to fill those positions, according to Jamil.

“But also their corporate credo is hiring from the communities that surround them,” he said.

At medical district hearing about the project last summer, Stratis estimated the store would create between 200 and 300 new jobs, half of which would be full time.

Stratis described the store then as spreading over 153,000 square feet, surrounded by 728 parking spots. Twelve to 15 trucks would arrive daily.

The City of Chicago initially proposed building the new 12th District police station at 14th and Ashland site, where the Costco is now expected to locate.

The police facility was shifted to 1412 S. Blue Island after a series of land swaps between the city and medical district.

That, in part, slowed down the negotiations between the medical district and Costco.

“It took a while for the site to get assembled,” Jamil said. “Keep in mind there was another use plan for that site. There were a number of city-owned properties on the site — a lot of land-use issues had to be worked out.”

“We’re extremely excited,” Jamil said. “We think the benefits of this project are myriad.”

Contact: mmaidenberg@chicagojournal.com

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By Claudeah from United Center
Posted: 06/03/2010 1:44 PM

Yea!! I won't have to go to Manhatten, I mean Lincoln Park, anymore! I hope they put in a gas station too!