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SPECIAL SECTION

Now available: Nearly one-quarter of downtown storefronts empty

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Neil Johnson
Sunday, August 20, 2017

JANESVILLE—On a brick wall in the 300 block of West Milwaukee Street, vandals spray painted the phrase “Deth This Way.”

It's hard to know if they had a flippant joke in mind, but the farther west a pedestrian travels through downtown Janesville, the words might seem less funny and more like an epitaph.

Storefront vacancies in downtown Janesville are not a new phenomenon, but in some blocks of downtown west of the Rock River—particularly along the far west end of West Milwaukee Street—the number of vacant storefronts rivals that of storefronts occupied.

A Gazette walking survey of downtown revealed 36 storefront vacancies inside the boundaries of a proposed business improvement district. West Milwaukee Street and some of its side streets hold more than two-thirds of the vacancies.

The Gazette identified at least 150,000 square feet of vacant storefront space west of the Rock River. By comparison, the area east of the river had just under 40,000 square feet of street-level vacancy, according to survey observations matched with city property data.

Gale Price, the city's economic development director, estimated the vacancies recorded by The Gazette represent about 24 percent of the 154 retail and office properties downtown.

Vacant stretches on downtown's west side are more glaring amid an emerging renaissance across the river along Main Street.

Although there are storefront vacancies on downtown's east side, they are fewer, and storefronts along Main Street have begun to see millions of dollars in private redevelopment in the last two years.

Meanwhile, the city is embarking on the first phases of a multimillion dollar riverfront revitalization through its ARISE program.

But officials say some owners of vacant storefronts on downtown's west side seem disconnected from the revival a few blocks east. That's despite a resurgence in the general economy and a critical shortage in specialty apartment space that some believe could drive redevelopment and rebranding of some defunct downtown storefronts.

Price said he's seen continued malaise from some west side storefront owners he's reached out to even as the city has begun marketing a downtown tax increment financing district it created last year.

Price said it's hard to know if downtown properties remain vacant because owners fear risk or if owners dread the prospect of burdensome renovations or financial constraints that might make storefront rehabs or even occupancy fail to launch.

Even as the city nurtures a few major private redevelopment prospects simmering in the riverfront area, Price said some vacant property owners in downtown's west side remain on the sidelines.

Despite “For Lease” signs and even city construction permit papers taped in the windows of some vacant properties on the downtown's west side, some properties appear to linger in purgatory.

At some of those properties, The Gazette observed dusty work permit signs at least 2 years old, their print faded by sunlight. Inside, piles of construction material and tools that sit idle seem to be the storefronts' only inventory.

“I will say that it's frustrating,” Price said.

'NOW'S THE RIGHT TIME'

Vacancies have continued to open along West Milwaukee Street, not in just small shop storefronts but in entire commercial buildings such as the former Chase Bank at 100 W. Milwaukee St.

The 23,000-square-foot building went vacant and for sale when the bank consolidated locations in late 2016.

Some storefront owners and downtown stakeholders say lingering vacancies hurt perception in parts of downtown, even if they open doors to future reuse or redevelopment.

In some vacancy-riddled stretches of west downtown, signs of renewal are appearing.

Janesville resident Mick Gilbertson's 1,100-square-foot storefront at 419 W. Milwaukee St. has sat vacant for years, but that soon could change.

He aims to demolish most of the building.

Gilbertson plans to create a pair of 1,400-square-foot loft apartments on the second and third floors of two occupied storefronts just east of 419 W. Milwaukee St. The project hinges on Gilbertson tearing down most of 419 W. Milwaukee St., leaving only part of its fašade standing. Behind the fašade would be a private courtyard for apartment tenants and a small parking deck for their cars, according to Gilbertson's architectural plans.

Gilbertson acknowledges it's taken almost a decade to fully launch the upper-floor apartment redevelopment. He said that's largely because he had to wait years for the market to recover from the housing and lending meltdown of the Great Recession and for demand for apartment rentals to build.

Now, housing stock and the local stable of available rental properties have reached historic low-water marks, according to recent Realtors' analyses.

“Now is the right time,” Gilbertson said.

Gilbertson said the apartment project could take off later this year, and it's likely to be market ready by 2018. It would create spacious, white-collar apartments with built-in parking and loft space—something Gilbertson said the downtown sorely needs to revive.

“To have a successful downtown, you need services, activity, and you need housing to all be a part. A lot of that is chicken and egg. My feeling, at least with the work I'm now committed to for redevelopment in downtown Janesville's case, is it's important to have some housing here,” Gilbertson said.

Gilbertson sits on several ad hoc committees focused on downtown revitalization. He believes the first waves of revival likely will center on the riverfront. That's where the broadest redevelopment is occurring, and it's the location of the city's first phase of ARISE: a town square under construction along South River Street.

Gilbertson called Milwaukee Street's far west end “the frontier” of downtown Janesville.

He acknowledged that 36 downtown storefront vacancies, most of them on the west side, is “concerning,” but he believes if his apartment project is successful, it could provide a model to re-invent the area west of downtown's core.

Gilbertson's project would attack a sliver of storefront vacancies on the west side of downtown, but Forward Janesville President John Beckord, who is familiar with Gilbertson's plan, suggested it would be a “disconnect” for anyone to think a small-scale redevelopment lacks significance.

“Every little bit—every building—counts,” Beckord said.

MAYBE NOT RIGHT NOW

While Gilbertson might be striking a hot iron, other owners seem uninspired by the fire.

Price said within the last year he had a walk-through a few blocks east of Gilberton's property of a small West Milwaukee Street storefront that's now vacant. The visit excited him, he said, because he saw the building as suitable for a rehab that could dress up the storefront and revamp its upstairs to create market-grade apartments.

Like Gilbertson, Price believes the downtown is badly in need of more spacious apartments for younger, professional people.

Price told the building's longstanding owner that a renovation might cost $250,000 to $350,000, but it could transform the storefront's upper floors into a haven for downtown dwellers. At market rates, Price said he thought the owner could easily collect $40,000 to $50,000 a year in rent from four apartments.

But after his visit, the owner never followed up, Price said.

During site visits to downtown properties, Price said, he often talks about city incentives, state tax credits or federal grants that might be available to improve older downtown properties, particularly those more challenging to renovate or redevelop.

“I think for some, it's a hesitancy of risk. Nobody wants to enter into a deal to see themselves fall flat,” Price said. “You've got to have the right timing between the idea and when you can bring it to the market so that the market is at a peak to absorb it.”

Price's job is made more challenging by the lack of a comprehensive city database for vacant commercial properties. A new city ordinance approved Aug. 14 that requires both residential and commercial property owners to register vacant properties unless they're actively renovating them or listing them for lease or for sale.

A vacancy registry could help the city quantify empty properties or in some cases spur vacant property owners to action. But knowing what's vacant wouldn't necessarily make the market respond any faster.

Beckord, the Forward Janesville president, pointed out that in a free market, government and local economic development officials can't force redevelopment, renovations or tenancy in any area of the city.

“You hear comments like, 'Why don't they (local officials) demand that retailers locate downtown or on the south side of town?' I'm quick to tell people that's just not the way it works,” Beckord said.

The condition of any commercial property is a factor in its prospects as is its location and its assessed value, Beckord said. But he also believes the owners of some vacant storefronts—including some on downtown's west side—might readily draw tenants if they made a concerted effort to market their properties.

“There are some who are not particularly aggressive related to tenant acquisition. They don't hire professionals to market their properties. Instead, you might see a card in the window with a telephone number written on it,” Beckord said.

SEE YOU LATER?

Accountant Ron Ross says he's considering moving out of the office he owns and has occupied for nearly 20 years at 119 W. Court St. on the west side of downtown. He said he's troubled by a spate of recent gun violence in the Fourth Ward, including a shooting homicide in May that happened on South Franklin Street, just a block from his office.

Ross said he has not heard other business owners on downtown's west side say crime is hurting their business, but he said some of his own clients have told him violence in the neighboring Fourth Ward has made them leery of coming by his office.

As a business owner, Ross said, violent crime is something he can't control.

“The murder that happened, it wasn't even people from this area. How is anybody supposed to predict that or stop it from happening?” Ross said. “But people hear about the crimes, and they're reactive. I can understand that.”

In the past, Ross said he's considered adding on to his Court Street office to grow his business. But he said he's found the city's process for commercial construction to have “huge red tape issues,” including fees for site evaluations and reviews and mandates that for him would included planting additional trees in his terrace.

He said it's extra cost for a small business owner to absorb.

“I squashed my plans pretty quick when it became clear the city wanted this, this, and this … and then this,” Ross said.

Ross said he can understand why some vacant storefront owners might not be eager to launch major building revamps even if it would make their properties more marketable or better suited for a specific use.

Ross figures it might be better for him to build a larger office elsewhere in Janesville.

“I have a daughter who's graduating from cosmetology school, and I've thought maybe I could turn my office here over to her for a salon. That would bring a young entrepreneur downtown,” Ross said. “But with the thought of the crime nearby … I don't know that I'd want her down here.”

Ross gave an ironic chuckle, knowing what it could mean to bow out of a building he's owned for years.

“It'd be another downtown property vacant, I guess.”

NOTE: This story has been altered to reflect a change from an earlier version that mistakenly described the status of a commercial storefront at 545 N. Main St., Janesville. The storefront is currently being occupied by Crossfit 608, a fitness gym.



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