City gives Highland Park theater developer another shot at filling vacancies

Expressing both frustration and hope that a long-vacant downtown property will soon have tenants, a majority of the Highland Park City Council said on Monday that they are willing to continue working with the property owner of the former Highland Park movie theater property at 445 Central Ave.

The discussion at the council’s regular Committee of the Whole meeting on Oct. 6 was prompted, in part, by an August council meeting in which the board unanimously rejected an amendment to the 2018 agreement with property owner Scott Canel to allow a dermatologist office to open on the first floor.

As previously reported by The Record, and reiterated at Monday’s committee meeting, the 2018 agreement granted a special use permit to Alabama Associates, Canel’s development firm, to develop the two-story, approximately 21,600 square-foot commercial building — once owned by the City — with a restaurant and or retail spaces on the ground floor.

The rejected amendment was seeking to lease two of the three ground floor units for a “high end dermatologist practice with incidental retail sales” and an office of a “private equity fund run by a longtime resident” and friend of Canel, according to public records.

City staff on Monday were seeking guidance on how to proceed moving forward.

One suggestion from City Manager Ghida Neukirch and supported by Canel is allowing the dermatologist office on the ground floor, while also setting tenant deadlines for leasing the property.

Canel said if he doesn’t meet the deadlines, he is offering to pay the city $250,000 for economic development purposes.

If agreed to by the council, the proposed agreement would give Canel two years to find tenants for the remaining spaces.

Speaking to councilmembers, Canel said in addition to Dr. Rachel Lefferdink’s dermatology office, he would like the tenants to include a “high-end” restaurant that is open during evenings and weekends and either a restaurant or bakery that helps developmentally disabled individuals through the nonprofit Lindsey’s Place.

Canel explained that he believes that one of the storefronts is not a viable restaurant space because of its layout, which he said was one of the challenges he’s had in filling the vacancies.

He also said that delays caused by, among other factors, the COVID-19 pandemic meant that he only moved into the building around three years ago.

“I’m not walking away from this project,” he said. “I did it as a public service project. But it’s also not that I’m sitting on my hands.”

Councilmembers explain frustration

Mayor Nancy Rotering began the discussions by telling Canel that everybody wants the same goal of seeing vibrant businesses fill the storefronts.

“And nobody’s looking to punish anybody, but we are all feeling the pain of this vacancy for a long time,” she said.

Rotering said that five restaurants have reached out to her and expressed interest in moving into the building. But she said that neither Canel nor anybody on his team ever returned any of her phone calls.

Councilmember Andrés Tapia told Canel that his biggest concern was the lack of a response from Canel when businesses expressed interest in the building.

“As a businessperson, I understand some things don’t work out,” Tapia said. “But a good faith relationship requires a give and take, a back-and-forth conversation. And that’s the part that really worries me. We tried to engage in a conversation, we tried to engage (constructively), working this out together, and my perception is that there wasn’t … it was one way.”

Canel responded that he never meant to cause pain by not returning phone calls.

“I’m very sorry if I hurt the community,” he said. “It was not my intention to by not getting this development done over the three-year period of time.”

He said that while he was working on the former movie theater property, a second development opportunity opened up for him, and he put his time and effort into that development due to it being “time sensitive.”

Councilmember Anthony Blumberg, who was on the council when the agreement was approved in 2018, said he’s frustrated that Canel never came to them with any issues he was having with construction or that the space may not be appropriate for its agreed to use.

“You made a commitment in writing to develop this in a certain way, and now you’re asking all of us to accept a renewed commitment to do something else,” he said. “And although I appreciate your willingness to pay the city $250,000 to do that, it really doesn’t make up for the lack of what we wanted there and the impact that was intended to have on the surrounding businesses. I’m having difficulty agreeing to either the city’s plan or your proposal.”

Councilmember Jon Center said he wants to support Canel’s efforts, “but I’m very much trying to reconcile your comments and how you’re answering questions today with the original development agreement and the history of the project.”

Responding to Center’s questions about other businesses who have expressed interest, Canel said some interested parties include a real estate office, a bridal shop and the restaurant group Hogsalt, which operates popular burger spots Au Cheval and Small Cheval. He did not pursue any of the opportunities for various reasons.

‘It’s a risk’: Majority supports working with Canel

In the end, after sharing their frustrations with the vacancies, six of the seven councilmembers said they are interested in moving forward with Canel and his ideas.

Tapia said, in reconciling Canel’s intentions and the long-term vacancy, he’s willing to give Canel a chance.

“It’s a risk,” he said. “I wish it didn’t feel like a risk, but I’m going to put my risk on the good faith that you have offered here, and I’m going to make my bet on that.”

Center also voiced support for Canel, while also saying he’d like to see an agreement that sets deadlines and milestones.

“You’ve talked a lot about your word, and so let’s see you make good on your word,” he said to Canel. “I’m supportive of moving forward.”

Only Blumberg voiced opposition to the city and Canel’s ideas.

“I’m not comfortable with any of these plans,” he said. “I appreciate the apology enormously. I really do, and I still feel the enthusiasm and excitement that I felt with your initial proposal. I just can’t get over some of the other issues to make this unanimous.”

City staff will work with corporation counsel and Canel on drafting an amended agreement that will allow for Lefferdink’s office to open up in addition to two restaurant and retail spaces.

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