Like commercial and business districts across the nation, downtown Evanston has lost commuters and other consumers, leading to dramatic drops in sales, retail closures and vacant office spaces. Still, downtown Evanston business leaders say they have been pleasantly surprised by the resilience of downtown businesses and are encouraged by new ventures and emerging plans for the downtown.
“Our biggest focus right now is trying to help get things back to a pre-COVID state, with the understanding that we don’t know when exactly we’ll get to that.” said Paul Zalmezak, Evanston’s economic development manager.
Zalmezak and other Evanston business leaders who recently spoke with the RoundTable about downtown Evanston’s current economy expressed optimism for the future, but said they understand the current circumstances and what it will take to get back to a pre-COVID economy.
“Things are definitely rebounding,” said Joe Flanagan, CEO of Evanston-based Acquirent, which provides outsourced sales and marketing services. “We’re seeing more new restaurants and other businesses coming in than going out. Things are improving dramatically.”
Zalmezak said, “Our small businesses should be commended for making it through a really rough, scary time.” He said there had been fewer failures and business closures than he anticipated at the beginning of the pandemic. Business openings had exceeded closures, he said, with around 20 new businesses compared with around six closures year to date, Evanston-wide.
Flanagan said he pulled together a group of business leaders in Evanston, including from NorthShore University HealthSystem, Northwestern University and Rotary International, among others.
“They are interested in seeing a reboot, so we’ve been sitting down and talking about economic recovery and what we can do to make Evanston a better place for other businesses.”
Members of the informal group are leveraging their connections and relationships, Flanagan said.
“I’m not aware of any other time when you had all these organizations sitting in a room working on the issues,” he said. “Evanston has always been a vivacious town, but it took a body blow. It takes time to get people to return to offices – it’s slower than expected. We can’t dictate when they’ll come back to town, but we can make Evanston more attractive for them.”
Office vacancy surges
Zalmezak said one of Evanston’s advantages is that it has a significant office market in its downtown that isn’t typically found in the suburbs, particularly because of the amount of office space available.
Prior to COVID, he said, there were around 20,000 commuters coming in to work at buildings like 1603 Orrington Ave. or 909 Davis St. Based on data tracked by the real estate information company CoStar, Zalmezak’s office said that the space vacancy rate pre-COVID (at this time of year in 2019) had been 7.77%, but the loss of commuters and less need for physical space has led to a rate of 13.45%.
Steve Degodny is vice president of leasing at Golub and Company, which is Chicago-based but has offices in Evanston.
“The pandemic has forced every company to take a hard look at how it operates,” Degodny said. “For the majority of businesses, there is likely going to be flexible scheduling going forward and there will probably be a lot of varying opinions on office setups.”
Degodny said that he believes that many companies will likely downsize their office space by as much as half. Apart from the decreased need for expansive spaces, he recognizes other challenges, such as substantial increases in construction costs for office renovation and the customization clients want.
Still, Zalmezak said he hopes business leaders and their employees who got used to working from home on the North Shore or on the north side of Chicago will prefer downtown Evanston to going all the way to downtown Chicago. He said that he is working with the mayor’s office to speak with CEOs of businesses in other communities that have a need to relocate.
Annie Coakley, executive director of Downtown Evanston, said that her organization has created a website for the initiative Downtown Evanston Works (downtownevanstonworks.com) to encourage decision-makers considering where to locate their businesses to think about Evanston.
Though commuters are beginning to return to work, Zalmezak said, foot traffic downtown has remained low, which means decreased lunches sold, decreased gym memberships and decreased sales tax, among other things.
According to Costar data, Evanston’s retail space for restaurants and stores pre-COVID (at this time of year in 2019) had a vacancy rate of 6.4% versus the current rate of 12.37%.
“The disappearance of office workers downtown makes it difficult. In neighborhood districts, people are continuing to go to coffee shops, restaurants and other businesses,” Zalmezak said.
He acknowledged that much of this is market-driven and that the same thing is happening in business districts around the country, but also said that Evanston businesses have shown resilience.
The city passed an ordinance in February of 2021 that banned the use of brown paper coverings of windows, which Zalmezak said leaders feared might emphasize closures. He said that the city hadn’t had to invoke the ordinance because so many businesses had survived and landlords had steadily filled vacant spaces.
He pointed to the 719 Church St. space that Andy’s Frozen Custard recently vacated, explaining that, even before the lease was up, it had already been filled by Elephant and Vine, a vegan restaurant.
Zalmezak also said that while Next of Kin, which was at 625 Davis St., had permanently closed, a new restaurant – unnamed as yet – will be coming.
He acknowledged, though, that despite encouraging numbers of restaurants that survived or have been replaced, most are still struggling, partly because people still want to wear masks and avoid crowded spaces.
“They are still scared and have a sense that we are still in uncertain times,” he said.
Zalmezak also pointed to signs of the downtown’s rebirth. He said that the transformation of Church Street Plaza, including the return of movies with AMC Theaters, and the addition of businesses like Sky Zone, an indoor trampoline park, and Belong Gaming, an e-gaming studio, will be key to stabilizing downtown – especially to bringing people back at night and on the weekends.
“The big picture is that we’re adding the kind of businesses that we have been talking about for years because of the way the global retail world is working,” Zalmezak said. “You can’t experience the trampoline from your phone – you have to go in. These types of businesses will bring in dining before shows and other types of entertainment.”
Among other retail locations that Zalmezak said already house new businesses is 1630 Sherman Ave. where Barnes and Noble was previously located, and is now the location of a new Northwestern medical facility.
“It will provide health care services that we need as our society ages. It may not be what people think of as a fun, sexy kind of use, but it will bring high-paying jobs, people running to the doctor, grabbing lunch and running errands.” He also said that the Barnes and Noble closure had allowed Bookends & Beginnings, 1712 Sherman Ave., to thrive and provide new offerings.
Nina Barrett, the store’s owner, agreed.
“I realize that Barnes and Noble was important to a lot of people,” Barrett said. “I do, however, remember that when Barnes and Noble began spreading across the country, it drove thousands of independent bookstores out of business. … I think we care more about Evanston. I know we care more about local authors, that we are more interested in responding to what Evanston wants … It’s all part of our mission. We definitely have gotten more business because Barnes and Noble has gone, and I feel bad for people that miss them, but I think it’s a good thing for Evanston.”
Focusing on what works
Zalmezak said that city incentives for encouraging new business are limited, but talked about its Storefront Modernization Program, which helps small business owners improve the appearance and functionality of commercial buildings in the city’s business districts.
He said the focus of much of the city’s work to support businesses will be in transforming and promoting the business districts.
“We have a comparative advantage of having a unique train station district, historic buildings and unique retail businesses. We also have the suburban and the urban – you can move here to get away from city life but still have aspects that are urban,” said Zalmezak. He also said that the city is looking for consultants who will help the city develop a business district strategy and implementation plan.
The work will include market research, analysis of Evanston’s business districts physical characteristics, identification of physical improvement opportunities and recommendations for moving forward.
He said he believes that an important part of that strategy will be new and higher-quality events, including in the recently renovated Fountain Square space, which is still awaiting a functioning fountain that is not expected to be repaired until 2023.
Talking about innovative outdoor spaces that other neighboring suburbs have “beat us on,” he cited the Wilmette dining district, including its outdoor space at Wilmette and Central avenues.
“Their entire downtown could fit into one quarter of our downtown,” he said. “If we can work a little harder, we can duplicate what they’ve done. It’s a fun opportunity but will take lots of work.”
Zalmezak also said that commitment to shop local from Evanstonians will also be key to reenergizing the downtown.
“There is a lot of commentary in Evanston, but we need more action. We need a mindset that we should be shopping local and supporting local businesses more. The evidence suggests that folks are still using e-commerce. Stores in Evanston need a surge in activity, so let’s shop local. Let’s follow CDC guidelines and go back out to shop and eat,” he said.
“Evanston still has cachet in terms of attracting business, but we’re in a competitive landscape,” Coakely said, adding that Evanston has always competed with the mall, but that now it’s competing with growing business districts along the North Shore.
“Willmette, Winnetka, Highland Park and Glencoe – those communities didn’t have the landscape they do now. What are things we can do as a city so that we are more of a destination? You can’t rely solely on a good mix of tenants. Placemaking and beautiful environment is what puts you over the edge.”
Coakley said that she believes attitudes toward COVID-19 are changing and that there is a definite uptick despite the ways that e-commerce has dominated the last two years.
“Shopping is still a very social experience,” she said. “I feel people, the vibe, the scene is different, people are getting back into stores and restaurants. As long as COVID numbers stay down, I think we’re OK.”