Geneva panel supports $290K to revive boarded-up Little Owl/Flagstone

The former Little Owl/Flagstone at the corner of Routes 31 and 38 in Geneva - boarded up and vacant since 2021 - has a chance at a new beginning following a recommendation last week for a grant and tax rebate of $290,000 so the new owners can complete structural and architectural renovations.

The city council's committee of the whole voted 9-1 recommending approval of an economic incentive agreement for a $138,800 grant and a $151,200 sales tax rebate between the city and Woodmont Tapville Geneva, 101-105 State St. The full city council will take final action.

Economic Development Director Cathleen Tymoszenko said the former restaurant is a prominent historic building in Geneva and the goal is to reverse its dormancy and get it back to active use.

"It is significant within the local historic district," Tymoszenko said. "It's contributing to our Geneva Central Historic District, it's listed in the National Register for Historic Places."

The private investment is a little more than $2 million or 87% of the cost, while the city's commitment of $290,000 is 13% of the cost, she said.

The building has masonry issues, deterioration and window restoration that need to be addressed before a business can move in, she said.

The grant would come from American Rescue Plan Act funds, which can be used for downtown investment "as it is such an important corner for the city," Tymoszenko said.

The restoration work on the front elevation would cost $173,500, according to estimates from the architect and contractor, she said.

The owners will pursue historic tax credits, which will cover 20% of those costs, so the city will support it with the grant, which is 80% of the cost, she said, payable upon occupancy.

The second phase would be work on the building's east elevation, which would cost $189,000.

Tymoszenko said the recommendation is for 80% support of $151,200, in the form of a sales tax rebate. The rebate would come from 60% of revenues from the city's 1% municipal sales tax, she said.

"We have looked at all of the project costs - that includes the acquisition, the tenant build out, the additional work that was not completed by the (previous) owner that has to be completed," Tymoszenko said. "Why should we assist? Well, economic vitality includes historic preservation. This is a key structure, a key gateway historic structure adding to the city's image and brand. ... It is a prominent, important building. We have a new owner willing to invest, to retrofit and preserve the structure."

The city's assistance would go to the building, not to the business, but the business needs the city's support to move forward, she said.

"Without the business, no one would be here wanting to do this to the building," Tymoszenko said. "We would have the reward of having the building preserved, reversing the decline and disinvestment and reactivating a corner. It's a really important corner and it's been dead for a while. We are proposing that we invest into the building and we allow the business to pay for the remainder of the improvements and then we're getting this building out of its current condition of (being) boarded up."

The owners have 24 months to complete the work.

Mayor Kevin Burns applauded the recommendation.

"The council's overwhelming support for re-energizing this visible, valuable and vaunted structure in downtown Geneva underscores our commitment to the power and potential of strategic partnership with business," Burns said.

A clawback

Fifth Ward Alderman Robert Swanson, who cast the lone no vote, proposed a clawback clause in the agreement, so that the owners have to pay the city back.

"In the event that they close down a month later, we're out that money and they put the building up for sale ... it's more valuable," Swanson said.

Tymoszenko said a clawback is not recommended.

"We are not investing in the business, we are investing in the structure - and the structure needs attention," Tymoszenko said. "And whether or not the business succeeds ... we need to address this deteriorating structure. I think that the clawback may interrupt the progress of the deal."

Tymoszenko the deal is a delicate one that has almost fallen through a few times.

"We are actually here by the grace of a lifeline that the owner is throwing," Tymoszenko said. "We are not paying out until the work is done. We will have windows in here, we will have the facade renovation. Even if the business doesn't succeed, we still win."

Besides that, clawback is for when money is given in advance, she said.

Fourth Ward Alderwoman Amy Mayer said she did not support a clawback because it might make financiers wary.

"I am super excited that this is coming," Mayer said. "I think that the whole city will be pleased that this is going to happen. It is an important - maybe the most important building - in our city streetscape. We should go full force and give these people ... what they need to get it done."

Arbizzani family

The former Little Owl/Flagstone building dates back to 1837, according to city documents.

The Arbizzani family owned it and operated the restaurant since 1947, adding Flagstone Crafts and Cocktails in 2007. The family operated both until they closed the establishment in August 2019. Then it was sold that September to another restaurateur.

"The new owner had the intention of building a second location for a very successful business in Elgin," Tymoszenko said.

But that owner had a more intense use for the property than the electrical system could handle, requiring a new transformer.

Coupled with the need for more power, that owner halted restoration work and put the building back on the market in 2021.

"The decision ... was really based on understanding that the property was not going to be a right fit for the vision and their concept," Tymoszenko said of the former owner deciding to sell the property.

"In November 2022, it went under contract with a new business owner looking to do a Tapville Social restaurant concept. This is a successful concept in other communities. It's a better fit with the building. They don't need to do the electric upgrades, they don't need to do as much of an intensive build out. It's kind of right-sized for the space."

Financing challenges delayed it from moving forward, but now with a new investor to purchase and fund renovations, it is ready to progress, she said.

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