News Nearby: Geneva Downtown Alive and Well

• Editor's note: This is the third in a series of articles on Geneva business and development, based on an interview with 2011 Wood Award winner Joe Stanton—Geneva businessman, landlord and developer. The path is interesting for Batavia, which is undergoing its own downtown transformation with the Streetscape project.

Geneva developer and landlord Joe Stanton says the death of downtown Geneva was greatly exaggerated.

Former Geneva Patch columnist Jeff Ward started sounding the death knell of the downtown in a column that ran in October 2011 headlined, "Why I Think Our Downtown Will Disappear."

As late as mid 2012, three of the four corners of Third Street and State Street were vacant—the State Bank building on the southwest corner, the Merra-Lee building on the southeast corner and the Erday building on the northwest corner, which was vacated by Kiss the Sky on June 30, 2012.

Only Starbucks remained on the corner that defines Geneva's two major downtown business thoroughfares.

Then came news that Grunwald Jewelers was leaving, due to retirement, and the Cole Travel said goodbye. And all of that came after the closing of the iconic Mill Race Inn in January 2011 and the U.S. Bank exiting its longtime home at North Third and Hamilton.

But what's happened since that time has been just a shade short of remarkable.

Today, all four corners of Third and State have tenants. EvenFlow Music and Spirits started the ball rolling by renovating the State Bank building into a successful entertainment and dining venue that opened Aug. 1, 2012. Perlman's Jewelers moved into the Erday building and opened in January 2013, and State Street Jewelers capped the trifecta by announcing in January that the longtime Geneva business would take over the Merra-Lee spot.

Meanwhile, the All-Chocolate Kitchen spread its wings, strengthening yet another Geneva destination and Mossy Twig expanding into the Third Street shops. The list of new additions is long and includes Tavolinio, OS2 Salon, the Sugar Path, Sweet Natalie's and many others.

Is Downtown Geneva "Back"?

"It’s not that it's back—it never went anyplace," Stanton said in an interview with Geneva Patch.

"It was easy to sit there and pick Geneva apart and say everything that was going wrong. And those comments were true—those were things that were going wrong. But you compare us to all the surrounding cities, and we were way ahead.

"We’ve definitely turned a corner on it," he added. "And I think we’re turning a corner quicker than everybody else."

Part of the success has been, not only in finding new businesses to come to Geneva but in existing businesses exploring new opportunities. 

"We’ve had a lot of businesses that expanded," Stanton said. "I know, a lot of people say you shouldn’t count when a business just moves as ‘a new business.’ (But) if they move out of a 1,000-square-foot office and move into a 2,200-square-foot office, absolutely you should give credit for a new business coming into town, because (these businesses) took the opportunity to say, ‘I’m not going to make a lateral move for less rent. Because it’s a competitive market, I’m going to take these good rents, and I’m going to grow now.’

"The jewelry stores are perfect examples. Both of them took the opportunity to move and to grow—and to invest big bucks in the properties—because it was a good market for them to make their move."

Confidence Is Up

Just as vacancies can cause doom and gloom and a self-fulfilling negative prophecy, filling vacancies creates momentum in a positive direction, Stanton said.

"If you look at it, so many businesses that closed down got filled in quickly, because there is confidence there—and it’s confidence that the city and building owners are on their side."

And there's more interest than perhaps most of us see.

"If you look at the corner of State and Third, we immediately got a new jewelry store in there. They had to beat out a couple different people to get that spot, because a jean shop was working with Erdays at the same time.

"State Street Jewelers decided it’s a good market to expand—even though they knew Perlman’s was going across the street. EvenFlow put a lot of money into that building to go in there. Mike Simon—All Chocolate Kitchen expanded, Mossy Twig expanded, he got a clothing store in there, and he’s close to a lease for another spot that’s in there. The jean shop down the block, the Denim Loft, closed and it was reopened—the doors didn’t even get closed before it reopened.

How'd It Happen?

As with any turnaround, the Geneva downtown successes happened because of a number of factors, Stanton said.

Entrepreneurs recognized opportunities with lower rents, landlords made creative deals and incentives to move or stay, the city of Geneva and Geneva Chamber of Commerce helped market open spaces, and financial institutions offered refinancing that helped landlords and tenants lower their monthly payments.

"Everyone’s been very aggressive, and I think the market has rebounded because of the aggressiveness of the city, the aggressiveness of the landlords. It’s amazing, when you let the market work for you what you can get done," Stanton said.

"The landlords got very aggressive, which we do whenever there’s a downturn in the economy," Stanton said. "They went to existing tenants and made what deals needed to be made to get new tenants to come in.

"We’ve created voidable leases for people to let them know, during the first year (of occupancy), if something went wrong, you can walk away from it. We’ve been a little more aggressive on what we’ve given out for building allowances and things like that. So that gave people a higher level of confidence.

"We have a very, very aggressive mayor when it comes to going out and talking to the business community. We have a staff that’s very approachable. And it was a collaborative thing that kept it going.

"The city staff cut the budgets down to nothing before people even knew there was a problem, (so) they didn’t have to lean on the businesses any more to carry it through. So I think the city did a good job keeping Geneva above ground."

Some of the stability and positive momentum was made possible by lending institutions getting together with businesses and landlords to make smart refinancing decisions, Stanton said.

"If you looked at the arithmetic that was going on, you’d be surprised that the landlords survived—and the landlords helped businesses survive because of the generosity of the banks. 'Generosity' might not be the right word, but we went into the banks, and my 15-year mortgages are all 25-year mortgages now. If at the end of the year we went to the bank and said, ‘We’ve got 50 grand in credit cards, the taxes are due,’ they’d say ‘OK, let’s take your mortgage and you have enough equity in your property, let’s go ahead and re-do it.’

"So I think most of the businesses that made it have made it. The businesses probably owe tens of thousands of dollars more than they did before, but it’s been restructured in a way that they can make it. The building owners—I probably owe hundreds of thousands of dollars more than I did 10 years ago, but I still have buildings, they’re still in good condition, I’ve been able to take care of them—my loans are just different.

"It took a lot, and you didn’t see that happening in the other towns."

Still a Long Way to Go

Stanton is an optimist by nature, and he's always been a cheerleader for downtown Geneva. But he's also a realist, and he understands the balance of Geneva's business ecosystem as well as anyone in the city's long history.

He also acknowledges that there's a long way to go. He notes the vacancy of the U.S. Bank building, the Mill Race Inn, the back end of the Erday's building and a tenant has yet to be named to fill the State Street Jewelers location when the store moves to the corner. There are a number of vacancies in the properties closer to the Fox River on the West Side, and on the East Side, the former bicycle shop at the southwest corner of East State and Bennett Street has yet to be filled. The former Citgo and Mobil station has moved to the Fuller's station location farther east, leaving a vacancy at State and Crissey, and the property at the northeast corner of East State Street and East Side Drive has yet to be developed.

"I’m not sure what the vacancy rate is right now. I think it reads high, but when you take the Mill Race Inn property, 10,000 square feet, 12,000 square feet, it's probably (not as bad as it might appear.)"

Stanton speaks with some authority because he's been here, living and breathing the environment he helps nurture. And his assessment is that Geneva is doing well—especially compared to its neighbors—the salad days haven't returned just yet.

"It’s a different economy than it was a few years ago, but it’s a working economy," he said.

In This Series

• Stanton Makes a Bid for the Mill Race Inn Property
• Park District Will Open Community Theater in 'Underground' Space