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TIF funding could give former St. Mary’s Hospital in DeKalb new life

January 7, 2019

DeKALB – Nick Cronauer used to play SimTower, an iteration of the popular build-it-yourself Sims video games, which might explain why a lawyer is interested in taking on one of the biggest revitalization projects in the city.

“I’ve always had this bug for development,” Cronauer said as he gave a tour of the gutted, pitch-black, four-story building at 145 Fisk Ave. that began as St. Mary’s Hospital in 1922.

He led the way with a flashlight.

“My whole mindset is goals; I like to achieve things, and it’d be fun to take this from an abandoned, decrepit building to something that could help the town,” said Cronauer, who grew up in DeKalb. He is a civil and litigation lawyer for Burns, Cronauer and Brown in Sycamore, where he lives with his family.

On Dec. 18, the DeKalb City Council earmarked $2.5 million in surplus funds from the tax increment financing district known as TIF 2. The funds will be finalized in the coming weeks, and Cronauer said he and his co-developer, Charles “Chip” Bylson, are waiting to see whether their ambitious project will receive funding to turn the Fisk property into a 35- to 40-room boutique hotel, with a banquet space, distillery room and restaurant and bar on the 5,000-square-foot lower level.

“The floor plan is subject to change, but it’s a nice kind of synergy with weddings, proms [and] dances at the Ellwood House,” Cronauer said of the plans for the lower-level space.

He also wants to have bridal suites and other room packages available in the hotel portion of the building. The lobby would be on the lower level, with the street-level entrance for guests only.

Cronauer estimates that the total project would cost $7.1 million, but he said the final figure will depend on construction and other costs once the city approves rezoning and a special use permit for planned commercial development.

“We would not be able to serve liquor here because [Clinton Rosette Middle School] is across the street,” Cronauer said of the original idea to convert the space into luxury apartments. “Hotels, however, are exempt from that rule.”

Cronauer said the rezoning could take three months, and he hopes the council soon will have a finalized TIF contract, which will mandate construction costs be completed in the next 15 months.

When St. Mary’s closed in 1965, the building became a girl’s dormitory for Northern Illinois University and the Sisters of Mercy. The building was vacant from 1970 to 1973 before DeKalb School District 428 bought it and used it for administrative offices until 1992.

In the past 26 years, six developers have come and gone, said Jim Mitchell of DeKalb. Mitchell is acting as an adviser to Cronauer as the project unfolds.

“[Cronauer] chooses to invest in [his] own community,” Mitchell said. “This is a great investment for young 30-somethings in the area.”

According to project materials from the Dec. 18 City Council meeting, the estimated combined total tax generation from the Fisk Avenue project sits between $149,000 and $167,000, and according to the documentation, it will allow the investment to be “recaptured” in 15 to 17 years.

The project also could generate an increase in hotel-motel tax, based on the city’s proposed 2019 rate of 7.5 percent, a boutique hotel occupancy rate of 65 percent and a daily room rate of $119. Depending on the future commercial uses for the building, $20,000 in additional sales tax is possible.

“I just think it’d be good for downtown, good for the Egyptian [Theatre], good for NIU,” Cronauer said. “A lot of people complain about there’s not really much unique venues or restaurants in the area, so it’d be – hopefully – something that would stand out.”

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