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Divided Town Council Approves Lease With ISU Art Gallery

Illinois State University’s Uptown art gallery has a new five-year lease, but some Normal Town Council members aren’t pleased with the terms.

During its Monday meeting, the council voted 4-3 to approve a rent-free agreement allowing University Galleries to remain at the ground floor space in the Uptown Station parking deck. The amended lease runs through 2024, updating the current agreement that was set to expire this month.

“It’s always important to value our relationship with Illinois State University,” said Mayor Chris Koos. “I say it time in and time out: What’s good for the town is good for Illinois State University, and what’s good for Illinois State University is good for the town. We kind of base our relationship on that.”

Stan Nord, Karyn Smith and Scott Preston voted against the resolution. Nord believes the pact blocks a potential revenue stream.

“If we were to rent it out to a business, we would be generating property taxes which our schools desperately need. And if that business was selling products, then we’d be generating sales taxes as well,” he said. “Instead of taxpayers subsidizing the property, we’d be generating revenue from it.”

Smith said the length of the deal will prevent the town from attracting such a revenue-generating tenant.

“Yes, this is a very nice amenity for our community. But, for free? I’m questioning that, and certainly not for five years,” she said.

Koos noted ISU already paid Normal more than $2 million – double the market value – over the past five years, calling the upcoming free five years a “leveling.” That $2 million repaid the town with interest for the initial expense of building out the space.

“The fact that they paid so much money up front on this property, the argument was made that if you factor five years of free (rent) and five years of what they paid, it’s about market rate for Uptown,” Koos said.

Comparing the gallery space to area roughly twice its size that Normal currently rents in One Uptown for $35,000, Nord figured ISU is receiving a $17,500 annual subsidy through the new agreement.

“So it’s obvious what ISU is benefitting from this deal,” he said. “What’s the financial benefit that taxpayers are receiving who paid for this building?”

City manager Pam Reece said University Galleries attracts 17,000 guests annually. Using the Bloomington-Normal Area Convention and Visitors Bureau figure of each guest averaging a $70 investment, Kevin McCarthy noted that projects to nearly $6 million in economic impact over the life of the lease.

McCarthy added that the improvement to the space already provided the town with value.

“We had a dirt floor on the ground level of a parking garage and ISU came along and dumped $2 million into it,” he said. “Now we have a $2 million property that if needed when ISU decided to leave we could rent. Sounds like the taxpayers have gotten quite a bit of value in my mind.”

Using the same Uptown rent figures as Nord, Smith said the town would not recoup the potential loss in revenue.

“I doubt that we are getting a benefit equivalent to the rent we are forfeiting if it is equated to the rent we are providing to the Uptown developer,” she said.

However, Koos said the space likely would not be able to command a similar rent as One Uptown.

“That’s not a good retail space,” he said. “There’s no adjacent parking to that except in the parking deck; most retailers want the ability to park. It’s oddly configured for a retail business.”

Kathleen Lorenz stressed the importance of maintaining a good relationship with the university.

“I just want us to keep in mind … the value that we have strategically placed on our partnership with Illinois State University,” she said. “Let’s not lose sight of the fact that this is a valuable partner and we don’t want to be penny wise and pound foolish.”

Troubled by the length of the lease with no real option for an early termination, Preston suggested amending the resolution to change the agreement to a one-year lease with four semi-automatic renewals that could be terminated by either party. But he retracted his proposed amendment when he saw it would not pass.

Nord then moved to table the vote so staff could renegotiate the lease with ISU according to Preston’s year-by-year proposal; that motion failed by the same 4-3 vote.

Uptown Cafes

The council voted unanimously to make a pilot program allowing on-street cafes in Uptown Normal permanent. Stave operated a successful outdoor cafe from May to September last year.

The program will allow up to six cafes in Uptown to operate from April 1 through Oct. 31 in the 100 and 200 blocks of North Street and the 100 block of East Beaufort. The cafes would be limited to one on each side of the street in each of the three specified blocks.

“I think customers of these businesses, they’re mostly restaurants, it’s a real amenity for them,” said Koos. “In my travels, I see them everywhere; we’re kind of late to the game on this. To make the customer experience better is good for the community and it’s awfully good for the business.”

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Joe Deacon is a reporter at WCBU.
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