City plans hotel construction


Northern Star File Photo

Downtown DeKalb features several restaurants and shops for residents to explore.

By Jessie Kern

DeKalb — City Council was presented with a renovation idea on Monday to turn a vacant downtown building into a boutique hotel.

The property, located at 145 Fisk Avenue, was initially built as St. Mary’s hospital in 1922. After shutting down in 1965, the building was utilized as a girl’s dormitory before becoming an administrative building for the DeKalb Community Unit School District until 1992.

The building has since been vacant, but Developer Nicholas Cronauer has plans for the space.

“We are happy to obviously bring this idea to reality, where if it is something the city does not want to go forward with, we know now rather than investing anymore time [and] money into this project,” Cronauer said.

Cronauer said like many previous developers he initially thought of converting the space into luxury apartments.

Jason Michnick, City of DeKalb economic development planner, said because of depth of the building and unit requirements for apartments, the property would function better as a boutique hotel is a “fitting concept.”

“The concept that they would like to do here at the 145 Fisk Avenue property would be to convert it into a boutique hotel with approximately 40 rooms, a restaurant and entertainment space in the basement [and] flexible commercial space,” Michnick said.

Michnick said various businesses have signed letters of intent to operate out of the commercial spaces at this location. He said with the renovations they will also construct additional event space through greenhouse concept designs and improve the integrity of the roof to allow for rooftop amenities.

“The views from the roof are pretty exceptional as the grate slopes down towards the river so you can see out over the treetops from the roof, it is pretty remarkable,” Michnick said.

Cronauer said through the renovations they would really try to capture the natural light, height and location of the old building, which has been vacant for almost 30 years.

“I think this is kind of the last chance to turn an eyesore into an economic engine that can help drive revenue, taxes, jobs and people to downtown DeKalb,” Cronauer said.

Cronauer said the building is a designated landmark and part of the city of DeKalb walking tour, but is an eyesore in its current state. He said it has tremendous historical value, like many of the downtown buildings but has significant revenue generation potential.

“One of the reasons to rehab a building like this is, a building like this can’t be built today, the architecture on it is gothic revival, the facade has religious undertones,” Cronauer said. “I mean it would be cost prohibitive to ever see a hotel or to ever develop such a hotel, other than rehabbing the one that’s currently there.”

Michnick said the property would rely of Tax Increment Financing funds in the support of $2 million, which estimates about 32 percent of the preliminary $6.25 million project. He said he estimates the property tax bill to fall between $44 and $62 thousand based on the 40 room concept with commercial and event space.

“The hotel tax, based on a 65 percent occupancy, which is a pretty standard target in the industry for hotels, and at $119 a night, that would generate $80,000 annually in hotel motel tax for the city’s general fund.”

Michnick said there would also be retail tax and a tax for alcohol sales from the restaraunt.

“Based on the projections that I provided to you, recapture period on a $2 million incentive would be between 10 and 14 years which is in line with Corner Stone and DeKalb,” Michnick said.

The building has attracted attention from other buyers as well. Safe Passage, a social service for victims of domestic and sexual abuse, is in need of an increase in space.

“I just want to let the council know that we at Safe Passage have needed a new facility for many years,” Mary Ellen Shade, Safe Passage executive director, said. “We are extremely crowded in our shelter and our programs are dispersed among different houses, which is not ideal for a business to run.”

Shade said she understands the importance of development to the city, but Safe Passage has been looking at the property since 2015-2016. She said the work they do at Safe Passage is in line with the original mission when the building ran as a hospital.

“I can’t compete with the numbers that we’re throwing around here,” Shade said. “We are a nonprofit organization, there’s no property tax involved but we do have 48 employees. We create citizens who are productive members of the community.”

Shade said during the financial crisis the organization went into survival mode but did not have to cut any programs or staff. She said they are now in a position to be able to purchase the building.

“We are committed to finding the donors and finding the dollars we need to turn that Fisk Avenue building into a beautiful building again,” Shade said.

First Ward Aldeperson David Jacobson said he doesn’t believe this $6 million project is going to be something a nonprofit can raise the funds for after understanding the fundraising efforts and difficulties for the library, Hope Haven and NIU. He said he would be happy to work with Safe Passage towards finding other spaces like poorly run apartment complexes or a partnership with NIU to utilize vacant dorms.

“I appreciate that there’s now somebody else coming to the table that’s interested and I understand their mission and I understand what they do and appreciate that partnership but the property’s under contract,” Jacobson said. “It’s already going forward with a buyer that’s now coming to us with a project.”

Jacobson said there are few TIF projects to check so many boxes and the conversion of the building will preserve a historic building.

“On paper, the numbers are great,” said Jacobson. “The potential numbers are great, the building looks amazing, the concept looks very high end in niche that I think will go very well with the Elwood House and the Egyptian Theatre, which would be their very close neighbors.”

Jacobson said the project is in the concept phase, and it would bring an economic engine to the neighborhood and build on the development momentum downtown.

“I’m ready to support the project that’s in front of us,” said Jacobson. “Obviously they’re under contract, they have the rights on the building, they’ve been doing all the due diligence, they put together a project and a proposal for us, I think we should certainly explore that proposal.”