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                                  EXHIBIT 10.23

                                                               November 22, 1999

Mr. Andrew Pelmoter
Horizon Group Properties, Inc.
77 West Wacker Drive, Suite 4200
Chicago, IL  60601

Dear Andrew:

As you are aware, Horizon Group Properties, Inc. has retained Secured Capital
Corp as its strategic advisor to assist us in evaluating strategic alternatives
including the possible disposition of some or all of our portfolio in an effort
to enhance shareholder value.

Your efforts on behalf of the company have been important and will continue to
be important as we embark on this new phase.

While we engage in our efforts to maximize the value of our portfolio, we
recognize that the employees could have concerns about their future with the
company. Although I have discussed various possible scenarios which could have
little, if any, impact on your position with the company (including a portfolio
purchaser retaining our company as its leasing agent and manager, that only some
of our properties are actually sold, and/or that we start another line of
business which requires your expertise), there is no absolute guarantee or
promise of continuing employment that I can give. In light of these
circumstances and the company's desire that you remain fully committed to your
efforts on its behalf, the company intends to both reward you for contributing
to a successful transaction and afford you appropriate protection in the event
of a transaction after which we cannot offer you continued employment.

Accordingly, this letter sets forth the terms of your continued employment with
the company:

1.       SALARY AND DISCRETIONARY ANNUAL BONUS. You will continue to receive
         your current salary, subject to discretionary increases according to
         our current company policy. You will also continue to be eligible for a
         discretionary annual bonus in February, 2000, also in accordance with
         our current company policy. In no event will this bonus be less that
         35% of your current salary.

2.       SUCCESS BONUS ON PORTFOLIO DISPOSITION. Provided that you have not
         resigned prior to the actual closing date of the sale of all or
         substantially all of our portfolio, you will receive a success bonus if
         and when the company sells all or substantially all of our portfolio
         (the "Success Bonus"). The Success Bonus shall be calculated on the
         following basis:

<TABLE>
<CAPTION>

                           Gross Sales Proceeds For The Portfolio                       Percentage of
                           in Excess of Outstanding Mortgage Debt *                     Your Annual Salary
                           ----------------------------------------                     ------------------
                           <S>                                                          <C>
                           Less that $40 Million                                        Discretionary
                           Between $40 and $50 Million                                  50%
                           Between $50 and $60 Million                                  75%
                           Greater than $60 Million                                     100%

                           * cumulative based on one or a series of transactions
</TABLE>

         Additionally, if the company executes a binding letter of intent or
         contract with one or more purchasers for all or substantially all of
         the portfolio and said transaction or transactions subsequently close,
         you will receive an additional success bonus (the "Additional Success
         Bonus") as follows:

<TABLE>
<CAPTION>

                           Date of Binding Agreement                                    Additional Success Bonus
                           ------------------------------                              --------------------------
                           <S>                                                         <C>
                           On or before December 31, 1999                               50% of your Success Bonus
                           On or before March 31, 2000                                  25% of your Success Bonus
</TABLE>

         Both the Success Bonus and the Additional Success Bonus, if any, will
         be payable to you if you have not resigned prior to the final
         transaction closing date and shall be paid within thirty (30) days
         following the final transaction closing date.

3.       LEASING BONUS. In addition to the bonuses above, you will receive a
         leasing bonus (the "Leasing Bonus") provided certain increases in
         portfolio occupancy are achieved through the efforts of the company's
         leasing department. The Leasing Bonus will be based upon the increase
         in portfolio working occupancy ("Working Occupancy") from September 1,
         1999. Working Occupancy is defined as actual non-temp tenant occupancy
         plus leases for one year or more that have been executed by both the

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         tenant and the company, but the tenant has not yet taken actual
         occupancy of its space. The Working Occupancy calculation for the
         portfolio shall include the Medford expansion, but shall exclude any
         other expansion. The Working Occupancy for the portfolio as of
         September 1, 1999 is 82.5% or 2,213,002 sf occupied out of a total of
         2,683,326 sf for the entire portfolio. The Leasing Bonus will be
         calculated as follows and based on the February 1, 2000 Tenant Rent
         Roll:

<TABLE>
<CAPTION>

                    Increase in Working Occupancy                                Leasing Bonus
                    -----------------------------                                -------------
                    <S>                                                          <C>
                    Between 2% and 3%                                            $75,000
                    Between 3% and 6%                                            $160,000
                    Between 6% and 9%                                            $300,000
                    Between 9% and 12%                                           $500,000
                    Between 12% and 15%                                          $750,000
</TABLE>

         The Leasing Bonus shall be first calculated as of February 1, 2000, and
         shall be paid in its entirety to the Senior Vice President of Leasing,
         provided that you have not resigned prior to said date. The Leasing
         Bonus shall be payable within thirty (30) days of its calculation.

         Additionally, the Leasing Bonus shall be recalculated between February
         1, 2000, and December 31, 2000, as of the first day of the month
         following the date of your termination by the Company, if applicable.
         At the time of such recalculation, the amount earned under the Leasing
         Bonus as of said date less any amounts previously paid to you as a
         Leasing Bonus shall be paid to you provided that you have not resigned
         prior to that date. The Leasing Bonus shall be so payable within thirty
         (30) days of such recalculation. There shall be a recalculation of the
         Leasing Bonus only is you are terminated by the company between
         February 1, 2000, and December 31, 2000.

4.       SEVERANCE BENEFITS. In addition to the bonuses above, if you are
         terminated by the company, you shall receive a severance payment equal
         to five (5) months salary not later than thirty (30) days after your
         termination. Additionally, if you are terminated by the company and if
         you elect COBRA insurance coverage after your termination, the company
         will continue to pay the company's portion of your (and your family, if
         applicable) insurance coverage for four (4) months after your
         termination. After said four (4) month period, you will be solely
         liable for the payment of any and all COBRA insurance coverage for as
         long as you elect to continue COBRA insurance coverage. No severance
         benefits shall be payable to you in the event of your resignation.

5.       TERM OF THIS AGREEMENT. This letter agreement shall be valid and
         binding from the date of your execution through December 31, 2000. If
         your Success Bonus and Additional Success Bonus, if any, has become
         vested, but has not yet been paid on or before December 31, 2000, it
         will be paid to you within thirty (30) days after the final transaction
         closing date. If you have been terminated by the company on or before
         December 31, 2000, you shall receive the balance of the severance
         benefits due to you as set forth above. However, if all or
         substantially all of the portfolio has not been sold prior to January
         1, 2001, no Success Bonus and Additional Success Bonus, if any, shall
         be payable. Further, if you are employed by the company on or after
         January 1, 2001, the severance benefits provided for in this letter
         agreement shall terminate and no longer be applicable in the event of a
         termination.

Notwithstanding the above, the company may terminate an employee's employment
for cause at any time if the employee (a) commits an act of fraud, embezzlement
or misappropriation of company funds with respect to the company, (b) is
convicted of a felony or (c) commits a material breach of any of his or her
obligations as an employee of the company and the employee fails to correct such
breach within thirty (30) days (or such shorter period of time as may be
reasonably warranted) of receipt by the employee of written notice from the
company specifying in reasonable detail the nature of such breach. Upon an
employee's termination for cause, the company shall have no further obligation
to pay the employee any salary or to provide the employee with any other
employee benefits (including severance benefits) hereunder except for any salary
and other benefits that have fully accrued and vested, but have not been paid as
of the effective date of such termination.

Nothing contained in this letter agreement shall be construed, in any way, to
limit or impair the company's right to termination your employment at any time
for any reason.

Your signature on this letter constitutes your agreement to its terms and
conditions. Please sign and retail this original and return one copy of the
executed agreement to me.

Very truly yours,                             APPROVED AND ACCEPTED BY:

/s/ Gary J. Skoien                            /s/ Andrew F. Pelmoter
---------------------------------             ---------------------------------
Gary J. Skoien, Chairman, CEO and             Andrew F. Pelmoter       11/22/99
President


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