“We’re going to be OK in 18 months — but it doesn’t feel good today.”
That’s the prediction Paul Zalmezak, Evanston’s economic development manager, made to the city’s Economic Development Committee Wednesday night.
Zalmezak presented charts with data from CoStar Group indicating that at the end of last year 10% of downtown Evanston’s 1.42 million square feet of retail space was vacant and 10.7% was available for lease.
The distinction between those two terms is that space can be vacant while still under lease, and space can be available while still occupied by a tenant whose lease is about to expire.
While the retail vacancy rate is still higher than it was pre-pandemic, it has dropped three percentage points from its pandemic peak.
The vacancy rate for downtown Evanston’s nearly 2.1 million square feet of office space is now down to 11%, while the availability rate is 16.1%.
That means the office vacancy rate is now below its peak from the early part of the last decade — but still above the level later in that decade that drew developers to propose major new office buildings here.
The vacancy rate decline appears to be in line with increasing return-to-office figures in Chicago and other major cities — but those occupancy levels are still only at roughly half the pre-pandemic figures.
Zalmezak said that assuming vacancy rates continue to decline, he anticipates seeing new movement toward construction of the City Council-approved office tower at 605 Davis St. in the near future.
Ald. Bobby Burns (5th) said it appears Evanston is faring pretty well in comparison to other places — but the city is still struggling with COVID-19 and its ramifications.
“Some really cool things are coming in the next few months,” Burns said, after Zalmezak described some of the new retail businesses that have leased now-vacant storefronts.
Ald. Devon Reid (8th) said the city needs to exert more control over what opens in downtown and look at the zoning code to avoid trading retail businesses like Barnes & Noble that draw a lot of foot traffic, for lower impact office uses — like the medical office use that took over the bookstore.
But Ald. Jonathan Nieuwsma (4th) said the city already has the power to influence that through its special use approval process.
Nieuwsma said a couple of applications are currently pending for convenience stores downtown — and he’s opposed to adding any more such uses in the downtown district and would not support their special use requests.
One concern for several committee members is the plan announced last month to renovate the Old Orchard mall in Skokie over the next few years to include residential uses.
“They’re building residential development — a downtown Evanston — on what’s now a parking lot,” Zalmezak said. “This isn’t going to ruin our downtown, but it will be highly competitive and make it difficult for us to reinvent downtown.”
Reid said the mall “feels like a safe place to take kids and not worry about a car popping out of somewhere.” He suggested Evanston needs to close some streets to create pedestrian-friendly areas.
But Nieuwsma said closing streets has been tried before in a lot of other downtowns — generally without much success.
Zalmezak said a consultant’s report on how to improve downtown and the city’s other business districts is scheduled to be presented to City Council late next month.