While preparing his Meineke Car Care shop to open in January, Jeff Vogt had workers tear out fixtures so all that was left of the former Blockbuster store in Cary were four walls and the roof.
He gutted the building and put in new overhead doors, new drainage and car repair equipment for his franchise. The 6,600-square-foot building had stood empty for a year.
Many businesses are concentrating on existing, vacant spaces rather than building new places, in part because financing is loosening up.
Vogt was able to get financing for his project in five months, which the bank said was quick. “Maybe I got lucky,” he said.
Vogt still has about 1,600 square feet of available space and said he is thinking about putting in a coffee shop, cellphone store or ice cream shop.
In the past two years in Crystal Lake, more than 1 million square feet of empty retail space has been filled, which is about 50 businesses and 500 new jobs, said Michelle Rentzsch, the city’s director of planning and economic development.
Crystal Lake offers incentives for businesses that locate along Route 14, Route 31 or Route 176 – up to $10,000 in a matching grant for start-up costs. Most of the time, though, businesses are investing about $250,000 to open, Rentzsch said.
Incentive money can be used for furniture or fixtures, Rentzsch said. The city also offers discounts on permit and development fees, which are based on the upfront investment.
“It could be a nice savings up front,” she said.
Rentzsch said it retail development was slow for two years, when no one started building anything from scratch. Now, though, investment capital is starting to loosen up, she said.
“People are trying to rent out the existing space,” Rentzsch said.
“It’s fascinating how retail is changing,” she said. “For decades, retail had its formula and stuck with it. People are adapting. They’re retrofitting existing storefronts. They’re more efficient on how they stock inventory.”
Getting a retailer in place sometimes takes a long time.
One success is Fresh Market, which went into the former Borders store on Route 14. Fresh Market had been in contact with Crystal Lake for seven years before it opened up a location.
Finding the best real estate deal and best opportunity takes time, Rentzch said.
In McHenry, a Buffalo Wild Wings and an AT&T store are planned to go into the Shops of the Fox River.
The former Borders location in McHenry is slated to become a Room Place in early to mid-spring. A Japanese sushi restaurant is slated for McHenry Commons.
“I think it’s definitely a good sign,” McHenry Deputy City Administrator Doug Martin said. “We still have a lot of vacant retail space, but specifically with larger buildings it is difficult to fill.”
The former Walmart store in McHenry on Route 31 remains vacant, as is the former Sears building.
There is about 266,000 square feet of space available just along the northern stretch of Route 31 in McHenry.
When it comes to incentives McHenry awards them on a case-by-case basis, Martin said. “If someone requests an incentive, we have a strategy that states what to look for,” he said.
Christopher Stilling, director of community and economic development for Cary, said landlords are structuring leases differently than in years past to make sure tenants stay long-term.
“We’re doing as much as we can,” Stilling said. “It starts with establishing great relationships with property owners and reaching out with tenant representatives and brokers. ... The village tries to bridge the gap between the landlords and prospective tenants.”
Cary has seen some businesses fill vacant spots recently. Currently, there’s a 9 percent vacancy rate for retail space in the village. At the peak of the economy, many communities had vacancy rats of 5 percent to 7 percent or less.
“I think it’s a slow rebound, not one that’s skyrocketing,” Stilling said. “It’s not that far off from a few years ago.”
Assorted retail space vacancy rates:
Cary: 9 percent
Crystal Lake: 8 percent
Algonquin: 7.5 percent
Lake in the Hills: 6 percent
Woodstock: 7 percent
McHenry County: 9 percent
Source: Village of Cary and city of Woodstock