Northwest Business Magazine

Fueling Economic Growth in St. Charles

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The growing skyline in downtown St. Charles is just one signal that this city’s economy has been expanding across many sectors. Get the inside scoop on what’s new, what’s in the pipeline, and what’s being done to keep the momentum going in one of Kane County’s largest communities.

From his perch in St. Charles’ municipal center, Mayor Raymond Rogina has an undisturbed view of his city’s future.

Just outside, as the Fox River rambles through the heart of downtown, he spies crews completing the latest additions to the St. Charles skyline – the second in a trio of new buildings with an old Main Street feel.

What’s happening on First Street, along the riverbank, is emblematic of the growth happening all around the city, as developers bring to life a vision of St. Charles as a destination to live, work and play.

Of course, the city has long enjoyed a reputation for its nightlife and live entertainment, but to assume that’s all there is to do here is to seriously misjudge one of Kane County’s largest municipalities.

Manufacturing, entrepreneurialism and retail – both big and small – enjoy a strong and growing presence in this city of 33,000. The housing sector is rebounding, formerly vacant spaces are being filled, and new collaborations are reinforcing the many attractions that bring people to St. Charles’ numerous go-to destinations.

To Rogina, a former high school economics teacher, it’s a welcomed sight and a promising turning point.

We sat down with Rogina to learn more about the city’s expanding economy and some of the most promising opportunities for revived growth.

What are some of the most encouraging economic indicators you’re seeing in St. Charles?

We’re monitoring three sectors – residential, commercial and industrial – and they’re all on the upswing. Our building permits in the past year are down slightly; however, the value of the construction in 2017, compared with 2016, is up almost 80 percent. That’s huge. We think that’s a very strong indicator.

In 2017, 75 new businesses opened in St. Charles and we saw the expansion of several businesses.

A former student of mine runs a unique antique car dealership on the east side of town. He’s expanded his business near Pheasant Run, which is near the east gate of our community.

Out on Kirk Road, you’ll see AJR Filtration, a huge plant that expanded out there. We worked with peer local government organizations to come up with a tax abatement plan that was a win-win for them and a win-win for all of us.

Doran Scales recently opened in St. Charles. That’s been a longstanding industrial producer in our area.

There’s been a lot of focus lately on improving the First Street corridor downtown. How’s it impacting the neighborhood?

A recent addition to the First Street corridor is complete, and its new tenant, ALE Solutions, has moved in. That’s a disaster relief for-profit company. They go in when there are natural disasters, and they work with citizens who are displaced. They have a solid market share, and they take up three floors of this building, in offices that hold 200-plus employees. On the ground level are several eateries.

Another building on First Street is under construction, and it’s going to house condominiums, the Illinois headquarters for Sterling Bank and several other offices. It’s along the riverfront.

Construction starts soon on the third building planned for the space between Main Street and Illinois Street. That building, which is slated to be finished in summer 2019, will house retail on the first floor, and from what I understand tenants are lined up for the entire space. The building will have offices on the second floor and condominiums on floors three through five. We’re bringing people downtown to live.

Across the street, we have a plaza that’s permanently lit up. Once we have nice weather, we’ll have Wednesday events there. We had a St. Patrick’s Day celebration, and of course for our Holiday Homecoming, that’s where we have Santa, Lighting of the Lights and the end point of our Electric Light Parade.

I’m mentioning this because, when the third building is done on First Street, that plaza’s going to extend from the west side of First Street all the way to the river. What I see there is a great spot for downtown celebrations. Our strong Downtown St. Charles Partnership organizes a lot of activities, and I anticipate them closing down First Street so people can mingle. It’s set up for that kind of opportunity.

Now, we’re not done with First Street. We already have a Request for Proposals out to hear developers propose possibilities for what we call Lots 6, 7B and 8. They’re three other lots that were part of the original vision for the First Street Development. Those lots call for more residential downtown and some retail/service.

Putting all of this together, it creates the idea of live, work, play in downtown St. Charles. I think this should become a main street for activity.

The City of St. Charles has called for developers’ input on how to fill Lots 6, 7B and 8 in the city’s downtown. The current vision calls for a mix of retail, office and residential on these three properties. (Image courtesy City of St. Charles)

Nightlife is the city’s strong suit, but there’s been an increasing focus on other ways to enjoy downtown. How’s that effort progressing?

This town has become a serious, serious, serious dining town, in which you can have fine dining, casual dining and even family dining that’s not over the top. And then we have the Arcada Theatre, the Steel Beam Theatre, and the theater at Pheasant Run. You don’t have too many cities that have that much live theater on a regular basis. The entertainment scene is strong.

At the same time, we want to see downtown become better known as a center for health and wellness, where you can bike, walk or run. We’re looking at plans to develop the riverfront that may include additional river walks. There are all sorts of paths going north, south, east, west, but downtown we want to create a crossroads where people can easily come through St. Charles, whether they’re walking, biking or hiking.

Did you know we’re a running town? Dick Pond, the running shoe store, is just across the river from my office. We have the Fox Valley Marathon, which has become a huge success, and the number of 5K’s and 10K’s is growing, because we have the facilities for them.

The Greater St. Charles Convention & Visitors Bureau’s (CVB) new campaign really plays up the “actively authentic” personality of this town. How does this new campaign impact downtown?

The CVB is saying ‘live it, experience it,’ while the Downtown St. Charles Partnership (DSCP) says ‘create your city side.’ This town offers some of the same opportunities available in Chicago, without having to travel to the big city. Art, history, entertainment – you can do it here with less congestion.

We’ve now got both organizations, the CVB and DSCP, housed in the municipal center, so there’s great opportunity for collaboration.

Someone recently asked me, ‘Aren’t you worried about the congestion downtown?’ I responded that I think parking problems are a good problem to have. We have to resolve them, but it’s a good thing to resolve, because it means people are downtown engaging in our businesses, spending money in our town and improving our economic situation. And they’re having fun.

The city’s east gate has long been a focus for economic re-development opportunities. How are things progressing there?

Of the top three questions I get, one of them focuses on what’s going on at the Charlestowne Mall. The Krausz Companies, from the West Coast, bought the property. Their initial approach was to re-create the mall. That didn’t work out, and that’s playing out in a lot of other communities.

And why is that? I think it’s very clear: retail is being challenged aggressively by the internet. Not to say retail is dead. It’s simply being challenged. I talked to a person yesterday, who said, ‘My wife buys everything on the internet.’

Krausz has brought in a national residential developer to put together an initial plan that blends residential with the mall. It’s a multi-use concept that would have some specialty retail, townhouses and apartments. They’re in the midst of doing their preliminary work.

I’d be in seventh heaven if a shovel turned over there in 2018, but I can’t say whether that’ll happen.

Now, there are some footnotes.

Cooper’s Hawk just opened up on an outlot and it’s been a home run. I can’t tell you how pleased I am to hear how happy management is to be there. It’s a tough ticket to get into. Make sure you have a reservation.

Von Maur isn’t going anywhere. They own their own pad, and they’re very happy there. Classic Cinemas has just re-created itself. That’s here to stay.

I think what you’re going to have, ultimately, is a place where people can walk out of their townhouses or apartments and go enjoy some specialty retail and restaurants or see a movie.

Now, let’s look across the street. We had a just-about-vacant strip mall and it’s now being filled by stores that we know millennials enjoy: T.J. Maxx, Ross Dress for Less, Ulta, and, for all the millennials – we’re going to have Five Below, because millennials like dollar stores. That whole area, which was vacant two or three years ago, is now nearly full.

A preliminary conceptual plan for the Charlestowne Mall mixes residential living with developed outlots and a partial demolition of the current mall structure, creating a live-work-play destination on the east side of St. Charles. (Concept image courtesy City of St. Charles)

So, is the vision to make the east gate another “destination” for retail, entertainment, etc.?

We’re 40 miles from the world’s greatest city, but it does take a train or an hour’s car ride. I like to think St. Charles can offer some of the same attractions. Not on that same scale, but the same kind of destinations in a much more homey atmosphere. We have Pheasant Run. We’re a hotel town, where our neighbors might not be. We have a couple of different festivals every year. We like to think all of St. Charles is a destination.

And the Arcada Theatre is a national landmark. It’s 91 years old. [Operator] Ron Onesti’s been here for 10 years and he’s like a magician. He brings these musicians in here who have deep followings. Trust me when I say we get visitors here simply because of the Arcada. They dine and see a show. Steel Beam Theatre has an active number of plays.

What initiatives are you working on to help businesses establish here or expand?

We have a 50/50 program, with matching funds, where a company puts up around $20,000-$25,000 and we help to fund permanent improvements in the building. In 2016, the city expanded that program beyond just downtown. According to [Economic Development Division Manager] Matthew O’Rourke’s statistics, that program helped seven new businesses locate in St. Charles, and it helped six existing businesses last year.

Both the city and the Downtown Partnership offer facade and storefront improvement grants. We have a Corridor Improvement Commission that’s given a certain number of dollars to support landscape enhancements within downtown, along Main Street and around our other main arteries, like Randall Road and Kirk Road.

We’ve worked to the benefit of city and business on creating sales tax agreements, where, as an incentive to come to St. Charles and do business here, initially they get a rebate on sales taxes paid by customers. It’s worked to the betterment of the business.

We don’t sit on our heels trying to lure businesses to St. Charles.

Now, some taxpayers complain about incentives and using tax dollars to bring businesses to town. But to some extent, those incentives have become a way of life. Businesses are seeking a locale because of what it offers their bottom line. But the goal here is a win-win. I’m happy for the business, but if the City doesn’t win, I’m not interested.

And businesses, of course, are always facing cost pressures from taxation, regulation, health insurance, red tape, competition, etc.

When I was an economics teacher, I used to tell the kids, ‘You’re lucky to live in a community where individuals will take on risk; they’re throwing their hard-earned money at this, and there’s a chance of failure. They’re taking a risk in order to give you more choices. More choices in restaurants, retail, service.’ I don’t like the word ‘monopoly.’

How are things moving in the housing sector?

There are several developments that have been approved by city council and are in some level of progression. Let’s talk about Prairie Centre. It’s been approved for 670 residential units, all apartments. This is in west St. Charles, off Illinois 38 and Randall Road. We are helping the developer, Shodeen, to obtain federal tax credits that ensure a portion of these units are senior affordable housing.

Now, this land sat fallow for almost 15 years after the mall out there closed. I’m very happy we finally got something moving on that property. You think about the opportunity cost, in taxes, lost from that area just sitting vacant. We haven’t turned a shovel yet, but building permits have been taken out and there’s been some preliminary work on the property.

One development we approved last year is Prairie Winds. The developer says he wants to finish by Thanksgiving of this year. It sits behind Lowe’s, off Randall Road, and has 250 residential units, all one- to three-bedroom apartments. I would say they’re relatively upscale, because they have amenities like indoor-outdoor pool, weight room, sauna, and clubhouse. There are people living there already, even as they finish developing.

On the west side of town, we also have the single-family housing development called Anthem Heights. It’s 78 single-family homes under construction.

And then there’s First Street. The second building has some condominiums in it. The third building, where construction starts this spring, will have condominiums in it.

I’ve alluded to residential over at the Charlestowne Mall, but nothing’s been done there yet.

The third building in the latest First Street project, seen here in artist’s concept, is expected to be completed by spring 2019. It includes a river walk and an extension of the courtyard located on the west side of First Street. (Concept image courtesy of City of St. Charles)

It’s a lot of emphasis on multifamily residences.

That seems to be the trend. We know that millennials, the up-and-comers, prefer renting. But let’s take it at the other end. I’m a baby boomer, and numbers I’ve seen suggest maybe 15 percent of St. Charles is baby boomers or older. The developer at Prairie Winds tells me it’s a mix of young people and seniors. He says there are very few children there.

And how are sales on existing homes?

All across Illinois, single-family sales were down 2.4 percent last year. Condos were up 2.3 percent. The condo market has been revived. I have no concrete number, but from talking around, residential sales seem to be upbeat. We have an affordable housing statute in this town, and it says that a certain percentage of our housing stock has to be affordable following certain guidelines. I like to think that St. Charles is a town where we have a solid number of houses for those who want luxury. We have a number of houses here for people who want to have a starter house. We have rental that’s upscale, and we have rental that’s reasonable. It’s a solid mix.

What are we seeing in the way of jobs growth?

Our town currently has 20,000-plus job opportunities. Those aren’t job openings. Those are people working here, in the city limits of St. Charles.

The largest concentration of jobs is in manufacturing, construction and the service sector – particularly food services, but accommodations as well. The retail industry is fine, but I don’t believe it’s saturated.

I’m actually kind of happy that St. Charles was not inundated with a lot of big-box retail because that’s being challenged aggressively by the internet. We have plenty of small specialty stores, lots of service opportunities, lots of entertainment venues, lots of tourism activities and a big industrial park. That blend works really well.

You’re familiar with gross domestic product – GDP. I like to talk about gross city product – GCP. I’m pretty confident that it’s expanded here, because I can see sales tax revenues are on the uptick and new businesses are still coming to town. Now, how’s this gross city product made up? It’s made up of three factors: consumer spending, investment (new businesses and expanding businesses), and government spending.

On this latter point, the City government is a $40 million operation. We’re building a new police station next year on the west side. That’s going to open up an opportunity for development at the old police station right here on the river. I don’t know what will happen yet, but I have to believe prime riverfront property is going to attract somebody.

At the same time, there are discussions about increasing the utility of the river and riverfront. One of those plans shows an island, with more places for canoeing and kayaking. But that would also require an economic study and citizen input.

What do you hope to see over the next 12 months?

Let’s finish First Street between Main and Illinois streets, including the plaza and river walk.

Demolition for the new police station will hopefully start soon, and work should be completed within 15 to 16 months. That police station is a significant redevelopment opportunity. It demolishes a tired, old, vacated strip mall on the west side of town that was an eyesore. Every Sunday when my wife and I would go out for coffee after church, we’d drive by and I’d grimace, just thinking we’ve got to do something about it. Finally, we have.

The City staff is going to initiate a visioning process this summer for our comprehensive plan, at least for downtown, so that we can take this river development in a holistic sense, asking ourselves where the possible opportunities are to make downtown more vibrant.

It’s only in the talking phases, but I’d add that a developer has bought up a number of lots around our Mercedes-Benz dealership on Randall Road. He’s already advertising with a sign saying “Coming Soon: Audi of St. Charles.” Now, it’s only in the planning stages, but he’s bought property and has been interacting with the City staff. That’s really an avenue for further development.

It’s my personal hope that we’ll see construction on Prairie Center and we’ll get definitive news about Charlestowne Mall.

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