A development group wants to turn Regal Cinema Lake Zurich into a mixed-use housing and restaurant development though the Lake Zurich trustees have worries over traffic, flooding and the proposed housing density.
Their proposal includes nearly 300 rental units spread across eight three-story buildings and includes apartment sizes from studio to three bedrooms as well as a 4,000 square foot “quick service restaurant.” This will include indoor and outdoor seating. Should the project come to fruition, it would cost about $80 million.
The movie chain is expected to close its Lake Zurich location this year for lack of customers and for months owners have quietly sought buyers for their 20-acre property located at June Terrace and Rand Road.
The national theater chain filed for bankruptcy protection in 2023 and has been shuttering theaters nationwide.
Two development groups, MJK Real Estate Holding and the Continental Properties Company, a housing development firm, are working together to develop the property.
Representatives from the two companies went Monday, Jan 6, before the town board and asked the trustees for a courtesy review rather than a vote but Erik Hahn, the vice president of acquisitions at Continental Properties, told the board a deal with Regal is tentatively moving forward.
“We came forward (to Regal) with a proposal that met their needs and we have an exclusive agreement with them to purchase the property and we’re working through that with them now,” Hahn said.
Ricky Silverman of MJK said he believes the deal will attract businesses looking to move into the property. He told the board that when he began developing plans for a coffee shop on South Rand Road last year — a project that is underway and which the board approved — investors approached him with bigger, ambitious plans.
“We had a line of suitors that wanted to open businesses in Lake Zurich,” Silverman explained. “Unfortunately, the site I was working on (on South Rand Road) was too small, so I started looking for a larger development site. … We identified the Regal shopping center and decided to pursue it. The size is too great for retail alone. That led us to a group conversation with Continental about interest in entering the market and this is how we got to where we are right now.”
He conceded, though, that his group could not make a retail-only space work and the two companies have worked together in a Lockport development.
“The site is far too big for retail alone,” he said.
But though the end goal for the Regal property is clear, nobody can say when the theater will close its doors.
“We’re not sure from Regal how much longer they’re going to operate,” explained Hahn. “They would need to make a significant investment in that theater to bring it up to current (standards.)”
Hahn explained the theater doesn’t offer now-common amenities like reclining lounge chairs, and if they were to stay open, the chain would need major upgrades to compete with AMC and other theater chains.
“There’s a lot of work there so that’s one of the reasons they determined they’re willing to dispose of this asset,” Hahn said.
Mayor Tom Poynton asked Hahn if that meant that Regal could stay open potentially, but Hahn said the Chicago market isn’t that great for Regal anyway.
“They don’t see the same amount of theatergoers as they do in other markets,” said Hahn. “They indicated they may not be able to keep it open for another year. … I think they would like to see something happen to it by the end of the year.”
Silverman added the whole company is looking to get out of the Chicago market and are pleased with the proposed development deal.
“Based on our progress this far they’re happy with our execution on this and this is a key first step to reutilize this commercial property,” he said.
But as happy as the developers and the seller seemed to be, the trustees had concerns.
Trustee Mark Spacone, who spoke first, said he didn’t like the number of units suggested.
“I don’t necessarily have a problem with putting in a development of residential on that site but that being said I think the density is overwhelming,” he said. “I think it’s a lot of buildings in a tight space.”
He said traffic is already bad in the area and adding nearly 300 residences in that space wouldn’t help that. The other trustees all agreed about worsening traffic and the density.
In addition, Spacone as well as Trustee Greg Weider added that snow removal is a problem under the current design because it would require the property to push snow onto adjacent property, though Silverman said he believed there’s room on site for excess snow.
At the end, Poynton said the meeting and the concerns were not the end.
“This is step one of the project,” he said, thanking the developers for coming in for a courtesy review. “There will be a long working relationship with the village.”
Jesse Wright is a freelance reporter for Pioneer Press.
