Despite some stumbles, business climate looking up in St. Charles

St. Charles does not have a natural immunity to the economic downturn. Shoppers need only look at the rows of gated shops in Charlestowne Mall and the shuttering of several businesses across the street for evidence of that.

But there is hope.

Community leaders believe they have a recipe for an inoculation that's allowed business to slowly thrive despite financial struggles in the private sector.

“We have continued to grow economically the last few years, and there's at least half a dozen good examples of that,” Mayor Don DeWitte said recently.

The cornerstone of that evidence is the city's First Street redevelopment project. The project has been dubbed the crown jewel of the city's downtown district. Local officials believe in the retail and restaurants at the center of the project so much that they've staked $26 million in tax increment money into the plan. The project's financing currently is stalled with the completion of the second phase of that vision. City officials expect Phase 3 may start in 2012 if financing for the project comes together.

“That's the goal.” DeWitte said.

St. Charles Chamber of Commerce Vice President Christine Manisco agreed First Street is the key to the downtown's future. Almost all the businesses associated with the project are members of the chamber. The organization promotes cruise nights during the summer months on First Street to help attract customers to the downtown. Manisco said once businesses open in St. Charles, owners quickly find they want to do more than just operate in the community; they want to become part of it.

“We have a lot of businesses in St. Charles that give back to the community,” Manisco said. “That's why we were voted No. 1 by Family Circle magazine.”

The publication recently voted St. Charles the best town for families in America. The ranking was based on the quality of local schools, affordable housing, green space and a giving spirit, according to the publication.

The city also seems to be a shopping destination. The city ranked behind only Aurora and Elgin in total sales among Kane County communities last year. DeWitte said that's because the city has shown an ability to rebound from bad business turns. For example, Sears abandoned its anchor store location at Charlestowne Mall only to return to the city in the form of a smaller appliance-based store a few months later.

The city's Mercedes-Benz dealership and the Buick/GMC dealership on the east side of town have also continued to be strong sources of sales tax revenue for the city despite declining auto sales nationally.

In a show of its business diversity, DeWitte pointed to pending plans for RR Donnelley to convert the former Pier 1 warehouse into a new industrial business use. Likewise, the Armour Swift Eckrich facility on Kirk Road is planning an addition to the building to expand operations, DeWitte said.

“That means new jobs are coming to St. Charles,” DeWitte said.

But there are still plenty of opportunities for growth. The city's own website lists 219 different sites available for development, sale or lease. That compares with about 2,000 businesses already established in the city.

All businesses need customers. City staff members are currently working with developers to bring a new residential development to the city. The project, known as the Lexington Club, would bring 28 single-family homes and 114 townhouses to the area formerly known as the Applied Composites site. The plan would rehabilitate what is currently a brownfields site.

“That kind of activity shows us that the new homebuilders continue to view St. Charles in a favorable light,” DeWitte said. “Economically, it may seem like there's nothing going on based on the activity we've had in prior years. But compared to other communities struggling with economic issues we feel fortunate to hear about the activity we have.”

There is even a ray of hope for Charlestowne Mall. Mall owners are advertising the coming of a new restaurant and the creation of a community ice rink inside the mall. City officials have not seen any formal plans for those changes, but DeWitte said he welcomes any new activity that may start the mall on a new path.

“Our biggest problem over there remains that we're once again dealing with an absentee owner based on the West Coast,” DeWitte said. “Significant marketing and attractions must be done and created to bring that place back to some level of economic viability. The mall is definitely the nexus of that business district. Walmart showed it's bullish on the future of that area with the creation of a Super Walmart over there. We think that direction will be contagious once Charlestowne can get back on its feet.”

2010 St. Charles sales tax numbers

General Merchandise: $1,737,180

Food (Grocery): $1,109,241

Drinking and Eating: $1,666,350

Apparel: $133,778

Furniture and Household: $169,268

Lumber and Hardware: $777,607

Auto and Filling Station: $4,632,453

Drugs and Other Retail: $2,113,267

Agriculture, Extractive and Other: $1,220,630

Manufacturing and Miscellaneous: $142,528

Total: $14,190,338

Most recent sales tax revenue high: $15.89 million (2006)

SOURCE: City of St. Charles

Sales tax breakdown

State portion: 5 percent

City portion: 1 percent

City home rule portion: 1 percent

County portion: 0.25 percent

RTA portion: 0.75 percent

Total Sales Tax: 8 percent