Storefronts in downtown Gainesville are about 22% vacant, according to the city of Gainesville, but the Downtown Advisory Board (DAB) aims to help business owners set up shop through potential expansions of the business impact grant.

The staff report, presented in February, came from March 2025 data and focuses on the core downtown. In those approximately 20 city blocks, the report showed 98 active businesses with four coming soon and 28 vacancies.

But DAB member and realtor Teresa Callen said downtown is on an upward swing, with all the vacancies filled in the next couple of years.

“I think downtown is on the upswing,” Callen told Mainstreet. “I think that people that don’t come downtown don’t realize how much momentum has been built down there in terms of arts and cultural events and getting people from out of town to come in and actually occupy hotel rooms down there and be excited about different, larger events.”

Cited in the report, eight of the vacancies fall within a stretch of North Main Street that recently sold instead of being demolished. The new owners, Scott Shillington and Hal Mendez, own a sizeable footprint downtown, including Pop-A-Top, The Top, The Wooly Events, The Atlantic, The Dime and The Florida Room. The co-owners have started renovating the spaces that could reopen and add to the active storefront roll.

Another business, Beach Bar and Grill, is listed as active but closed last year.

Beyond the core downtown used in the report, St. Francis House announced it would close its center by mid-April. The building has been on the market for two years. Just south of the building is the old fire station that Gainesville has tried to sell for several years.

Callen said small businesses are the lifeblood of any community. She said the downtown already has strong culture and arts with Fest and the upcoming Big: Culture and Arts Festival.

“Getting more grant money allocated to small businesses that are willing to go into the retail spaces and fill the vacancies downtown is a huge priority to me because it makes the biggest difference to our economy down there,” Callen said.

She pointed to the Lot 10 development as another big positive. The City Commission approved a plan in January that would build around 115 residential units on the site, along with some retail space on the bottom floor.

Callen said that’s permanent downtown residents who will patron businesses. She also praised the city of Gainesville’s 2024 contract with Block by Block to serve as downtown ambassadors with neon green shirts.

As for how to provide startup grant funds, the advisory board members focused on amending the already-running business improvement grants with questions about arbitrage and pre-approval.

Board member Lauren Poe asked Callen how many downtown owners are simply waiting for land values to rise in order to sell, known as arbitrage. Poe said he doesn’t want to use public funds to help tenants renovate a space that the landlord can then sell for even more money.

“It’s harder for me to justify [using public funds] for somebody that’s not putting any investment into their own property when they have the means to do so,” Poe said. “They’re just not doing it because they don’t care about the physical envelope. They’re there to wait out the property.”

Callen said it’s probably half and half, and she added that nearly every landowner eyes the arbitrage as a possibility.

But she said the terms of the contract between the landlord and the tenant can eliminate owners looking for quick resell at a high price, thanks to market swings. She said the contracts should have multiple renewal clauses so that the tenant has the option to use the space for a decade instead of helping make renovations for just two or three years.

“If they’re willing to go a measure of 10 years, then they’re immediately not interested in arbitrage because to buy a tenant out of a space is sometimes just as costly as to buy the actual physical property,” Callen said.

Board member Anthony Lyons, working with the city on Lot 10, said the timing of the business improvement grants can make them tough for renters. He said a tenant enters an agreement with the landlord, but must then wait months to see if he gets the grant funding. Then the tenant must take additional months to actually do the repair work.

Lyons asked if there was a way a project could get conditional approval that is finalized as soon as a tenant has a final lease agreement.

Rick Smith, director of the Gainesville Community Reinvestment Area, which allocates the grants, said the process used to be first-come, first-served.

“We didn’t necessarily get the high-profile projects we wanted, so we went to more of a competitive cycle process,” he told the board.

At its March meeting, DAB reviewed applications for the grant, including the Seagle Building, Matheson House and Stripling Square Condominium Association. In October 2025, the City Commission approved $170,000 in grant awards to the Seagle Building, Matheson House and the Florida Theatre.

Smith said the GCRA could consider both the current and former system to find a compromise. The advisory board also wanted to know how other cities operated their downtown grant programs.

Besides considering grants to aid infrastructure changes, like adding a kitchen hood, staff also presented average rent costs and what a subsidy to that rent would look like at different tiers.

Rents ranged from $64,000 per month for 22,000 square feet to $2,800 monthly for 1,700 square feet.

Callen said downtown Gainesville has a glut of office space. But she thinks those spots will fill in over time. She said she wants to see galleries and entertainment venues that are not dependent on alcohol consumption.

She said downtown owners who understand the cyclical nature of Gainesville’s market—with students gone in the winter and summer—begin to generate income and want to expand.

“We would love to see an infill of more retail; stuff that keeps us downtown,” Callen said.