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Rockford aldermen vote to forgive Morrissey Group of Garrison Lofts debt

June 2, 2014
garrison school

By Jim Hagerty
Staff Writer

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 bath 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.

14 Comments

  1. old folkie

    June 3, 2014 at 1:29 am

    Surprise! Surprise!

  2. Tad Douglas

    June 3, 2014 at 8:38 am

    I am sorry, but this stinks. Nobody,but nobody has ever forgiven my debts. Can I get some forgiveness on some of my property taxes? Ya know, the ones they used to give these people the money in the first place?

  3. Rick

    June 3, 2014 at 8:48 am

    $6.5 Million total owed to the bank and the city on the property or $197K per unit (33 of them). Tell me who in their right minds thought this was a good investment. I don’t know anyone who would want to invest nearly 200K in a loft or town home in that neighborhood when average victorian style homes sell for under $100K. Something stinks here. Most likely they borrowed money against that property and spent it somewhere else.

  4. BerthaDerpkins

    June 3, 2014 at 9:48 am

    Only the rich get forgiven for these incredible debts, while the middle class get left to scrounge for less than a hundred thousand -which is the difference between being homeless and having a halfway decent life.

    I bank at RB&T -is this going to affect my bank rates? If this group/company/rich family owes MY bank $5m and owes the city as well, WHY SHOULDN’T THEY PAY IT BACK?????

    • Tom Joad

      June 4, 2014 at 4:35 pm

      The bank is NOT going to take a hit. That is the point. Rather than spend the money on litigation, the bank can just sell the property. All this means is that the City will not enforce a lean against the property, this is a gift to the bank, not our corrupt Mayor and his idiot father.

  5. old folkie

    June 3, 2014 at 9:56 am

    Honestly, didn’t anyone see this coming? Now, let’s turn our attention to that squalid piece of trash on 7th Street.

  6. Alan M.

    June 3, 2014 at 10:18 am

    This doesn’t surprise me at all. I lived in Rockford for 40 years. I watch him and his constituents turn down businesses trying to open at zoning meetings. He even went to Springfield to get approval to annex the county pocket we lived in as to double our taxes. We would have jumped from about $3500 to almost $7k a year. The politicians in that town and state are really trying to finish you off. I’m so ashamed of what happened to my home town and so happy we sold our home and got out before we wouldn’t be able to trade it for a VCR. Well guess it’s time to go pawn the rest of the stuff you own at pawn daddy for 1 more go at the slot machines all over town. Smh

  7. Aaron M. Magdziarz

    June 3, 2014 at 10:45 am

    HERE IS THEIR INFO PLEASE USE IT!!!!!!!!! Timothy Durkee 1 Tim.Durkee@rockfordil.gov 815-637-6200
    Jamie Getchius 2 Jamie.Getchius@rockfordil.gov 815-713-7575
    Thomas P. McNamara 3 Thomas.McNamara@rockfordil.gov 815-262-6734
    Kevin J. Frost 4 Kevin.Frost@rockfordil.gov 815-978-0542
    Venita Hervey 5 Venita.Hervey@rockfordil.gov 815-968-7682
    Marcus Hill, Sr 6 Marcus.Hill@rockfordil.gov 815-222-8057
    Ann Thompson-Kelly 7 Ann.Thompson@rockfordil.gov 815-968-8389
    Jeanne Oddo 8 Jeanne.Oddo@rockfordil.gov 815-375-0457
    Teena M. Newburg 9 Teena.Newburg@rockfordil.gov 815-654-8752
    Franklin C. Beach 10 Franklin.Beach@rockfordil.gov 815-399-3737
    Karen Elyea 11 Karen.Elyea@rockfordil.gov 815-961-1795
    John C. Beck 12 John.Beck@rockfordil.gov 815-961-1954
    Venita Hervey 13 Linda.McNeely@rockfordil.gov 815-962-5424
    Joseph V. Chiarelli 14 Joseph.Chiarelli@rockfordil.gov 815-962-5424
    Lawrence J Morrissey larry.morrissey@rockfordil.gov 815-987-5590

  8. Jim Phelps

    June 3, 2014 at 11:04 am

    This is the problem with Potemkin villages… they only last as long as the cardboard façades and and fake peasants that are paid to care about them. BTW: This is a nice historical aphorism considering the ongoing problems in Ukraine and Crimea. ((http://en.wikipedia.org/wiki/Potemkin_village))

    BTW Jim Hagerty: Remember this Stu Wahlin story from your weekly?

    http://rockrivertimes.com/2010/05/19/rockfords-tif-report-card-negative-balances-will-drain-public-funds/

  9. Matt Makris

    June 3, 2014 at 2:26 pm

    This is why I won’t ever move back to Rockford. I’m very disappointed in Mr. Morrissey. I wish Rockford would give me reasons to move back there. It was such a great place to grow up.

  10. Albert

    June 3, 2014 at 8:23 pm

    Keep in mind that our tax dollars went to hundreds of banks during the 700 billion dollar Troubled Asset Relief Program and many have not paid back those investments including QCR Holdings which operates RBT.

  11. Almost Retired

    June 3, 2014 at 8:39 pm

    Can we say, “crooked politicians?” I have NEVER had any of my debt forgiven, even when I was out of work DUE TO THIS SAME economic downturn. Why has this been allowed to take place? People who are constituents of these council members…remember what they did and DO NOT re-elect them. What have they done for YOUR district lately?????

  12. KR

    June 3, 2014 at 11:45 pm

    Did they do a “study” before deciding this?
    4 years ago,we moved our business and ourselves to a small town two counties west of Rockford. There a virtually no zoning restrictions, they are MORE than happy to have us and our business and the tax dollars we bring in. AND we have tripled in size and quality
    Yes, TRIPLED. OUR local government knows the value of attracting and retaining businesses, especially if they are small, locally owned.
    We provide a needed service to our community, and in turn, our community and local governing body encourages and supports our endeavors. We would have never been able to start our business, have this kind of success or support, had we stayed in Rockford. So glad we left. Rockford is it’s own worst enemy.

  13. Rick

    June 4, 2014 at 5:25 pm

    Yes this stinks is a correct comment. And our debts are definitely never forgiven.
    This smells of political favor all over it,obviously should have been studied better before this venture was started.
    I think I’d like to borrow several million,not be able to pay back a large chunk of it and then have some politicle friends say nah you don’t have to pay that back. We got you covered.

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