By Jim Hagerty
Dozens of citizens who packed council chambers will again have to wait until April 10 to find out the fate of the 13-story Ziock/Amerock building.
A decision on whether the structure will be turned into a $77 million Embassy Suites and conference center was postponed again as aldermen tabled the item Monday at the March 27 meeting of the Rockford City Council.
The delay is the second in as many weeks as leaders are still at least two votes from approving a deal with Wisconsin developer Gorman & Co. The proposal was tabled last week when Ald. Tom McNamara, D-3, read several proposed changes and asked his colleagues around the horseshoe to consider an amended deal.
“There’s no sense in rushing it,” McNamara said. “Right now, we don’t have the votes. We could rush a vote like Trump wanted to do (with the ACA repeal), or we can take our time and work the process.”
Under the latest agreement, Gorman is asking the city to spend $13.1 million to build the conference center, while he invests $64 million into the hotel portion of the 40,000 square-foot facility. The developer is also asking for 5 percent of the hotel tax revenue until 2040.
A candidate for Rockford mayor, McNamara proposed the city spend $12.5 million and allow Gorman to retain 4 percent of the tax revenue and direct the rest of the Rockford Area Convention & Visitors Bureau.
Aldermen must also consider the cost to demolish the Warshawsky Muffler building and build two parking lots, including one at the site of the former Tapco building.
Civic investment would come by way of the Redevelopment Fund generated by the 1 percent hotel tax. Estimates show that the city has already pushed nearly $5.5 million into preparing properties around the development, including the straightening of South Main Street.
“As much as it could be frustrating to some,” McNamara said, “(the delay) is a good sign.
“We have aldermen ready to vote no today, but are willing to take some time to negotiate to see if we can get there. I respect those aldermen. They are doing their due diligence.”
But the vote can’t be delayed forever as part of Gorman’s capital is coming by way of EB-5, a cash-for-visa program that would account for around $30 million. So far, Gorman has raised $16 million from investors in China. But, if a deal is not in place by the end of April, even those funds could be in peril.
Construction loans and tax credits are also part of Gorman’s capital stack as well as funds generated from a proposed TIF district.
Gorman & Co. is the third developer in the last decade with big plans for the Amerock building since a 2005 plan to turn it into a lifestyle center failed and Associated Bank began foreclosure proceedings.
Two other multi-million-dollar plans went nowhere until the property landed on the National Register of Historic Places in 2011 and became eligible for state historic tax credits. Gorman was given exclusive development rights a year later. Aldermen approved an initial agreement in 2014.
A second deal came before council in 2015, yet delays set the project back while Gorman lobbied for financing in China. He’s currently seeking investors in Vietnam, likely for good reason.
Rumors of capital outflow restrictions by the Chinese government have developers seeking foreign investors from other countries. Outbound moratoriums could curtail billions of dollars being injected in American projects like Amerock.
Gorman could not be reached for comment.
City leaders say the hotel could open in 2019. More than 500 construction jobs are expected while more than 100 people would be hired to operate it.