Phase Two of Hawthorn Mall 2.0, an extensive redevelopment effort that local officials have described as the mall’s most significant since its opening, will add hundreds of apartment units, matching a growing trend for redeveloping malls across the country.

Related plans recently cleared the Vernon Hills Village Board, and the developers said they plan to begin construction in late spring or early summer of next year, with completion expected in 2028.

The results of the redevelopment’s first phase are already visible: The former location of the mall’s Sears building is now home to an apartment complex, known as the Domaine, featuring more than 300 apartment units and retail shops on the ground floor. A road running through the complex, Hawthorn Row, evokes the feeling of the main drag of a downtown, with streets winding around mixed-use buildings.

According to village documents, Phase Two will add another 290 apartments, just south of the existing complex, as well as 37,000 square feet of new retail and restaurant space in mixed-use buildings. Twenty percent of the residential units will be held below market-rate rent, documents said, reserved for households earning up to 60% of the area’s median income.

Justin Pelej, executive vice president of development at Focus Development, said the new apartment buildings will be four stories tall and connected by an overhead bridge. Phase Two will also add two new plazas, and retail on the southeast side of the mall will be given outward-facing entrances.

The addition of on-site housing is one of numerous ways malls have evolved in the era of e-commerce. Earlier this month, Gurnee Mills announced a slate of new businesses as it finds itself in a far healthier position than pre-pandemic, based on occupancy numbers.

A rendering of mixed-use apartments to be built at Hawthorn Mall, as part of phase two of an extensive redevelopment effort at the Vernon Hills mall. When phase two is completed in 2028, Hawthorn Mall will have nearly 600 apartment units. (Images courtesy of Focus Development/SK+I Architecture)

Much like Gurnee Mills, the Hawthorn Mall had faced the loss of several major tenants in the years leading up to the pandemic. The original anchor tenants when it first opened in the early 1970s — Marshall Field & Co., Sears and Lord & Taylor- have all since left. Starting in 2019 and going through the pandemic however, hundreds of millions of dollars have been invested to reinvent the mall.

Business experts previously discussed the ways malls remain relevant and healthy despite years of doom-filled predictions about the rise of online shopping, including the need to be creative to draw in shoppers.

Jim Schrager, clinical professor of entrepreneurship and strategy at the Chicago Booth School of Business, said the idea of adding housing to a mall is a “really interesting trend,” as they imitate a “walking neighborhood” akin to a traditional town.

Pelej said malls, which are built on a community’s most traveled intersections, already act as many communities’ downtown. It only makes sense people would want to live there as well, he said.

“That’s where the best retail is. That’s where the best restaurants are. That’s where the community events are,” Pelej said. “If you can bring housing to it, it kind of rounds out the entire program for a suburban downtown.”

While Schrager couldn’t say what kicked off the trend, he noted a rise in this particular kind of mall redevelopment in the last decade. By his view, such residences aren’t necessarily for young people working in the big city, but rather those who want to live in a more small-town environment while having easy access to shopping.

Schrager said such a development should have restaurants, grocery stores and smaller, perhaps locally owned stores, rather than “mega stores,” to better fit the idea of a walkable downtown shopping area.

Overall, he praised the concept, saying it shows developers are thinking creatively.

“This is a way for people who want to build a mall, want to have a new downtown, to find another creative way to do it with residential housing attached,” he said.

Real downtowns see a downturn.

But it’s “not all good news,” Schrager said. While such malls position themselves as new downtowns for small cities, actual small city downtowns have seen their health decline, turning into office centers as shopping moves elsewhere.

“If you drive around to small towns in the Midwest … a lot of downtowns are failing, kind of because of malls,” Schrager said. “Less and less is going on in downtowns of smaller cities”

Emily Talen, a professor of urbanism at the University of Chicago, also has reservations about such redevelopments. While she supports the addition of housing, her ideal vision of a mall redevelopment goes much further.

She pointed to examples of “dinosaur” malls being far more radically transformed into real walkable neighborhoods, with grocery stores and community institutions like schools, libraries and churches.

Coming from the perspective of an urban planner, the imitation of a main street without offering “what people need for their daily lives,” seen in redevelopments like at Hawthorn Mall, is “less exciting.”

Local officials, for their part, have repeatedly praised the redevelopment. Thom Koch Jr., now president of Vernon Hills, previously said the project is pushing the mall “into the 21st century,” praising its diversity of housing, restaurants, entertainment and retail.

The joint Green Oaks, Libertyville, Mundelein and Vernon Hills Chamber of Commerce has also previously praised the project, saying it will become, “another destination for the area.”

https://www.chicagotribune.com/2025/09/29/hawthorn-mall-redevelopment/