Hearing on fate of Geneva’s historic blacksmith shop continued to July

GENEVA – The Geneva Historic Preservation Commission on June 20 continued its public hearing to July 18 on whether a circa 1843 blacksmith shop could be razed.

The limestone blacksmith shop is at the former Mill Race property at 4 E. State St., Geneva. The Shodeen Family Foundation, which owns the property, is seeking to remove its historic landmark designation and allow its demolition.

Demolition is a last resort if the owner has no other alternatives – an issue disputed by preservationists who want the shop saved and repurposed.

Scott Goldstein of Teska and Associates presented a revised version of a report on June 20, also prepared by Terri Haymaker of The Planera Group, to address applicant David Patzelt’s comments about how the property could be developed.

Haymaker was unable to attend, so Goldstein presented alone. Patzelt, who represents the Shodeen Foundation, also did not attend the June 20 meeting.

“Teska and Planera considered possible alternatives, including renovating the building as either a standalone project or in concert with the full site,” Goldstein said.

According to the consultants’ revised key findings, a standalone reuse of the historic blacksmith shop would provide “break-even” results with a modest return on investment of 1.3% annually, Goldstein said.

“We also used that methodology. But in addition, we consulted other investors, other real estate professionals and there was consensus to also look at internal rate of return,” Goldstein said.

Internal rate of return is the growth rate of real estate that includes cash flow as well as the increased value of the property, Goldstein said.

One option for the old blacksmith shop would be for the owner to donate it to a qualified nonprofit that could take a tax deduction, he said.

As before, the consultants said another way the project could benefit is from a public-private partnership as the property already is in a tax increment finance district.

But instead of $1.5 million as they concluded before, the revised amount from the TIF should $1.7 million, Goldstein said.

A tax increment financing district – known as a TIF – is a development tool used by local governments to encourage development or redevelopment in blighted areas that would be too expensive to improve with private dollars alone.

A TIF investment would be equal to 3.5% of the total development cost for the full site, which would be about $40 million to $42 million, he said.

“There is less risk because the public is investing in the project,” Goldstein said.

Also according to their key findings:

• The developer could build, as of right, a four-story residential development and receive similar return on investment and internal return with or without renovating the historic blacksmith shop.

• A planned development that includes the historic structure that also would allow partial fifth floor penthouses, which would earn similar rates of return. Allowing a partial fifth floor but not renovating the blacksmith shop would earn a similar rate of return.

“We conclude that the reuse of the historic building as a standalone project is a viable alternative as part of a public-private partnership,” according to the presentation.

The return on investment and internal rate of return for larger projects is similar with or without the reuse of the historic building, “with the value driven by the larger site redevelopment,” according to the consultant’s conclusions.

Committee Chairman Paul Zellmer said he expected testimony on the blacksmith shop to be concluded both from the public and the applicant at the next meeting.