By Jim Hagerty
CITY HALL – The Rockford City Council on Monday laid over the latest development agreement to turn the 13-story Amerock building into a skyrise hotel.
The motion to lay the matter over came after Mayor Larry Morrissey was flanked by hotel supporters and union workers at a press conference in the lobby of City Hall.
Boosters say the Hilton Embassy Suites and conference center is the missing piece to transform downtown, complementing the UW Health Sports Factory, the home of the Rockford IceHogs, the varied music and arts venues and a soon-to-be-year-round Rockford City Market.
“This hotel will be the catalyst to bring more businesses downtown,” Bee’s Knee’s General Store owner Alan Brown said.
Aldermen are expected to vote on the agreement next week. It is the third development deal since the council first voted on the project in April 2014. Back then, the project had a price tag of $67 million, and included an Amtrak line and a multi-modal transportation hub that would have replaced the downtown RMTD bus station.
Today, the project has a $77 million outlay, with $64 million coming from developer, Gorman & Co., to build and operate the hotel. Gorman is asking the city to take on the convention center at an initially proposed $13.1 million. Those funds would come from Rockford’s redevelopment fund generated by the 1 percent sales tax.
The project would create more than 500 construction jobs; more than 100 would be employed at the hotel. Officials say the facility could be open as early as 2019.
The holdup thus far has been in the capital stack, something the mayor said is finally in place. Gorman is still eyeing around $30 million in EB-5 funds, $16 million of which has already been raised from investors in China. Funds from a new tax-increment financing district, tax credits and various loans could make up the difference.
“This is a complex project with a lot of moving parts,” Morrissey said. “But, the final ingredient for it to come together is this piece – for city council to support the conference center. The EB-5 money raised is enough money to move forward. A construction loan has been raised. With a little help tonight, we believe we can get there.”
Several changes still need to be made to the final agreement. In amendments proposed by 3rd Ward Alderman and Democratic mayoral candidate Tom McNamara, the city’s investment will be changed from $13.1 million to $12.5 million. Gorman would also not receive 5 percent of the hotel’s taxes as initially proposed, but instead only retain 4 percent, with the remaining funds directed to the Rockford Area Convention & Visitors Bureau.
Improvements to Davis Park would also be added in, giving Gorman use of the facility in conjunction with the Rockford Park District and RAVE.
Ald. Venita Hervey, D-5, requested even more information, most notably centered on tax credits and unforeseen cost changes that have already come up since 2014.
“What is the fallback and how much of the project does Mr. Gorman have to have completed by the end of this year, in the event that historic preservation tax statewide do not come forward? What is the result?” Hervey asked.
“There’s (also) some concern about the liability of the estimate for the conference center. We are saying it’s $13 million. (But) we know happened with the sports center. We went from 8, to 14 to 21 (million). If you really want to move this, someone has to start addressing those concerns. I don’t see how this project comes together if one piece falls out. Nobody is telling me who’s going to put their finger in the dam and how that is going to get filled. Those are the kinds of things I want to know before next week.”
The new proposal would also include parking lots in the location of Warshawsky Muller and where the Tapco building stood just south of the hotel. Gone from the initial agreement is a parking deck and multi-modal transportation hub that would have accommodated an Amtrak line and RMTD buses.