By Jim Hagerty
The City of Rockford will let the Morrissey Realty Group, formerly headed by the father of Rockford Mayor Larry Morrissey, out of the gone-bad development agreement attached to the Garrison Lofts, aldermen decided Monday, June 2.
The vote was 12-1 to squash an agreement the city had with Garrison Lofts, LLC, a company controlled by Morrissey Realty Group and its principal, Rockford attorney, Joseph Morrissey.
In 2007, the city kicked in $1.5 million to help the Morrissey Group turn the old Garrison School into upscale townhouses and lofts at the corner of North Court and John streets.
While the majority of the units were built, the near-end of the banking industry brought by the Great Recession found the project severely under water. As it stands, 20 lofts are completed and two townhouses are partially built. That leaves it more than three units shy of the 33 called for in the development agreement.
Rockford Bank & Trust is still owed about $5 million. With the city’s portion of the debt forgiven, the lender can take control of the property without seizing it through foreclosure proceedings.
The bank will sell the lofts and townhouses to recover its losses, officials said Monday. The new deal puts the project two years behind schedule. The initial agreement with the city required the developer to rent the Garrison units to tenants for five years before selling them and utilizing historic tax credits.
The city was to recover its investment by recapturing TIF funds by 2028. Instead, economic hardships destroyed those plans. According to figures, the city would have taken a $1.4 million loss at the end of the term.
Joe Morrissey and Larry Morrissey bought the 127-year-old Garrison School for $120,000 in 2001, before the younger Morrissey was elected mayor. The mayor relinquished his share of the development when he took office in 2005.