Lakeside Mall transformation project is one year behind schedule, city says

The $1 billion transformation plan for Lakeside Mall in Sterling Heights is already a year behind schedule over where officials had hoped they’d be, city officials said this week. The delay is due to a complicated list of factors involving many moving parts, but primarily because the owners of two of the mall’s remaining department stores are holding out for more money in the buyout process, officials said.

“We’re about one year behind schedule in terms of what Lakeside was hoping we’d be,” said Luke Bonner, the city’s senior economic adviser, told the City Council on Tuesday.

According to Sterling Heights officials, JC Penney and Macy’s owners have reached agreements to sell, but Lord & Taylor and Sears have not. The holdouts are blocking the project from moving forward, officials said.

Word of the project’s delay came during a discussion over a pair of items before the council relating to the struggling shopping center.

The council voted 4-3 to:

• Approve an agreement between the city and the Michigan Economic Development Corporation for a $3 million grant to fund the acquisition of property in connection with the redevelopment of Lakeside Mall

• Approve a sub-grant agreement between Sterling Heights and Lakeside Out of the Box (OOTB) Ventures to allow grant proceeds to fund the acquisition of the property.

Holdouts holding up development plan

The $3 million grant, secured by Democrat state Rep. Nate Shannon of Sterling Heights, will serve as a “placeholder” or deposit on buying the two holdout department stores as they work through the purchase process, according to Bonner.

Ultimately, Bonner said, Out of the Box will purchase the stores as part of the deal. The $3 million will not “move the needle” as the stores will probably be sold for approximately $20 million, officials said.

Mayor Michael Taylor compared the Lakeside situation to that of Little Caesar’s Arena purchase of parcels of properties needed to make the arena deal viable. The first few owners who agreed to sell received lesser amounts of money than the final couple of properties that had held out and

According to Sterling Heights officials, JC Penney and Macy’s owners have reached agreements to sell, but Lord & Taylor and Sears have not. The holdouts are blocking the project from moving forward,

officials said.

PHOTOS BY MITCH HOTTS — THE MACOMB DAILY Motorists pass on Hall Road (M-59) — dubbed the Golden Corridor — in Sterling Heights on Thursday afternoon.

An empty parking lot sits outside of the vacant Lord & Taylor department store at Lakeside Mall.