Vacancies adding up on Route 14 corridor

Travis Haughton – thaughton@nwherald.com A sign heralds the coming of a Buffalo Wild Wings Bar & Grill in a building being built near the corner of Route 14 and Liberty Road in Crystal Lake.

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CRYSTAL LAKE – The city’s Route 14 retail roster might remind some of an obituary – listed with the recently deceased are the names of those who passed on before.

Empty storefronts – including the former locations for Bennigan’s, Wal-Mart, Garden Fresh Market, Bakers Square, Thomasville Furniture, The Great Escape, F.I.M. and Tweeter – sit vacant or house temporary Halloween haunts. Other national retailers, such as Linens ‘n’ Things and Circuit City, are preparing to close.

“What is disconcerting for a lot of people is the loss of national retailers. There are quite a few vacant buildings,” said Gary Reece, president of the Crystal Lake Chamber of Commerce. “No doubt when Carl Myers leaves Route 14, it’s just going to add to it.”

Myers, owner of Extreme Ford, plans to close his dealership at the end of next week.

A survey of vacant buildings along Route 14, from McHenry Avenue east to Pingree Road, found more than 200,000 square feet of vacant retail space. And it has happened despite extensive efforts to stem the tide.

James Richter, assistant director of economic development for the city of Crystal Lake, is spearheading a multipronged initiative – including Web sites and trade fairs – to fill what many fear quickly could become a sunset strip.

Woodstock resident Don Haber said he typically would shop at the Crystal Lake Circuit City three or four times a month.

No longer.

“They’re selling out all over,” he said. “It’s kind of scary.”

Mark Nannini, finance director and treasurer for Crystal Lake, said he cannot legally provide sales-tax data for individual stores.

And he still is waiting for the latest citywide totals from the Illinois Department of Revenue. But he said he did not sense any negative impact from the city’s sales tax boost to 7.75 percent on July 1.

The tax does not apply to vehicles or to food sales. Joseph’s Marketplace is eyeing an expansion, and the Route 14 Jewel is among the grocer’s most profitable, said Michelle Rentzsch, the Crystal Lake’s planning and economic development director.

A reduction in state and federal funding means much of the burden for infrastructure improvements – be it sidewalks or lighting – now is falling squarely on municipalities. In response, Crystal Lake created four tax increment financing districts that divert taxes generated by rising property values into a special fund used for everything from paying back construction bonds to defraying the cost of new utilities to helping with building down payments.

In addition to downtown and on Crystal Lake Avenue/Main Street, TIFs were established on Route 14.

The Virginia Street TIF, created in 2005, stretches from the Crystal Lake Motel to Midas Muffler and includes 77 parcels. Rentzsch said an estimated $6 million streetscape plan would be bid this winter, with construction starting in the spring.

The Vulcan Lakes TIF, formed a year later, consists of 22 parcels bounded by Route 14 to the north, Rakow Road on the south, Pingree Road to the east and Main Street on the west. Rentzsch said work should start next fall on an estimated $10 million renovation of the former gravel pit, allowing for public access and creating a unique opportunity to meld retail and recreational uses.

City officials hope these two areas will serve as springboards for renewed interest and development along what Rentzsch characterized as the “gateway” to Crystal Lake.

“That is our corridor. That is our Magnificent Mile,” she said.

But redevelopment takes time.

“[City officials] really want to get it right on Route 14,” Reece said. “It’s not going as fast as people would like. But it’s like a big boat. It takes time to turn that 180 degrees and get it going in the right way.”

Marketing the Market

In the meantime, the city has redoubled education and outreach efforts. There are glossy brochures detailing the inventory of available retail and industrial spaces, and Web sites. They include www.econdevcl.com and the soon-to-be operational www.crystallakerretail.com, which the city is putting together in cooperation with Inland Real Estate Brokerage Inc. – a major Route 14 landowner. Richter expects that site to be operational within a month.

Other efforts include working trade shows, publicity through the International Council of Shopping Centers, ongoing mailings to nearly 2,000 retailers and real-estate professionals, and networking through the McHenry County Economic Development Corp.

The city’s Economic Development Committee also has helped with business retention, as has a new program dubbed “I Shop Crystal Lake.” Its goal is to create awareness and promote the benefits of shopping locally.

But there is only so much the city can do. Once a company declares bankruptcy, property can be tied up in court for years. Rentzsch said she received an average of two calls a day about the Bennigan’s building – which technically is for sale by Inland but remains overshadowed by legal red tape.

Richter said rent along Route 14 averaged $12 to $26 a square foot. Is that enough to put off some national retailers? Perhaps. But a bigger hurdle, Rentzsch said, are incentive payments. Maggiano’s Little Italy, an Italian restaurant chain, requires a $2 million incentive up front, she said.

Another obstacle is dealing with multiple landowners. For example, a 34,000-square-foot space in the Country Corners Shopping Center was sublet multiple times – from Best Buy to T.J. Maxx to F.I.M. The Crystal Court Shopping Center has four owners: Adi Mor, owner of Garden Fresh Market; Developers Diversified Realty Corp. (Factory Card & Party Outlot, Big Lots), J.C. Penney Company Inc. (the former Wal-Mart) and the Illinois Teachers’ Pension and Retirement Fund.

Making parking lot improvements, for example, requires that all owners get on board, Richter said.

That can be a tough sell in a down economy, when a landlord already is collecting rent from a previous tenant or when there is a temptation to locate along Randall Road or Route 31, where Wal-Mart relocated.

“We need help to preserve Route 14 as a retail hub and artery,” said Tom Eilers Sr., president of Glen Ellyn-based Madison Corporate Group, which owns the Crystal Lake Plaza. “We believe in reinvesting in property, and we realize that is an important thing to do for our own financial health. We’ve actually done two major renovations since we’ve owned it and we have on the drawing board to do a third with a new look for the property and a reconfiguration of the outlots. But we need to stay focused. ...

“The community can only support so much retail. We’re not against competition, but I think the city has to focus on where it wants its major retail to be, and it can’t try to locate it along several different arteries.”