GENEVA – After dire warnings that a delay would kill a $3 million redevelopment investment in Geneva’s downtown, aldermen on Monday voted 5-3 to approve an economic development incentive for the building at 124 W. State St. – formerly occupied by Bicycle Heaven and H4 Fitness – as a restaurant.
The incentive agreement includes a sales tax rebate of 75% of the 1% municipal retailers tax collected for 10 years up to $515,200 in improvement reimbursement.
In a change from two weeks ago – after the City Council voted it down 5-4 – the new proposal included a backstop guarantee to the city for any unpaid deferred permit and parking fees in lieu of parking spaces and permit fees up to $150,000.
At a special Committee of the Whole meeting right before the City Council meeting, aldermen voted 5-3 to table it until next month.
Cody and Chanel Renkosik, who are under contract to buy the building as a second location for Burger and Sushi House, or B.A.S.H., told aldermen that they did not know if their Small Business Administration loans and other financing would still be available if action on the economic incentive package was delayed a month.
“I respect your due process," Chanel Renkosik said. “I do want to stress, that this has been over a year-long process for us … and the closing of this building was pending financing of which this incentive is a major, major part of. With COVID pushing things back, waiting another month for us, is potentially a deal-breaker.”
The property at 124 W. State St. has been on the market for two years. To create a new anchor attraction, the 14,820 square-foot lot with 14,000 square feet of commercial and warehouse space would have to be completely gutted in order to create a second B.A.S.H. restaurant.
Real estate broker Charles Kirkwood, who was handling the sale between the seller and the Renkosiks said after it was voted down two weeks ago, the seller thought it should be leased instead of sold if aldermen could not support the incentive.
“That building can’t sit there vacant,” Kirkwood said when the motion to table was still in play. “I don’t have another buyer with $3 million lined up to do something great with the property.”
First Ward Alderman Tara Burghart and 5th Ward Alderman Robert Swanson objected to the incentive package.
“I have a business and we were shut down for COVID and it’s expensive,” Swanson said. “We listed out all the things we’ve done for existing businesses – which is wonderful. ... suspending utility service connections, etc. All of the things listed here (on the agenda) are small dollars compared to giving $500,000-plus incentives to open up.”
Swanson also objected to the city becoming involved in real estate transactions.
Burghart objected to the size of the incentive, its impact on existing restaurants and noted her past objections to incentives.
The issue sparked intense debate for nearly two hours at the committee meeting, with Mayor Kevin Burns lobbying for aldermen to reverse the motion to table, and act on it instead.
Burns cited the benefits of previous economic incentive agreements.
“If it were not for incentives, more than half the East State Street Corridor would not exist today,” Burns said. “If it were not for incentives, Dodson Place would not exist today. If it were not for incentives, the entire redevelopment of South Third Street on that first block – All Chocolate Kitchen, etc. – would not exist today.”
Burns said the Geneva Commons on Randall Road also would not exist without an economic incentive.
“We went so far as to demand incentives for Geneva Commons that we actually pledged … $100,000 a year from the sale tax revenue of the Commons for several years, to market the downtown. … I think it worked out well,” Burns said.
“Downtown Geneva from East Side Drive to Anderson Boulevard generates approximately $95 million a year in sales tax,” Burns said. “The Geneva Commons generates approximately $98 million a year in sales tax. If it were not for incentives, there would be nothing on Randall Road. If it were not for incentives, there would be no Herrington Inn & Spa, let alone the restaurants there.”
Burns called on aldermen to reopen the issue – and for at least a couple of hours, they didn’t.
And then they did.
All eight voted to reverse the action to table.
Then they voted 4-4 to recommend it, with Burns voting to break the tie so it would move along to the City Council meeting, which followed the special Committee of the Whole.
Then they voted 5-3 to approve it, with 4th Ward Alderman Gabriel Kaven absent and a vacancy left by Michael Clements that is unfilled.