What the Hanley happened?

The fallout from the Hanley fire went up in a blaze of social media commentary last week. Now that the smoke has mostly cleared, we took time to talk to the key players and voices in the decision making around the demolition of the 116-year-old building. Here’s what happened during the city’s hectic Hanley week.

By Jim Hagerty
and Shane Nicholson

ROCKFORD — While the Fourth of July parade was rerouted, downtown businesses were still dealing with the aftermath of the fire that gutted the Hanley Furniture building.

One of those businesses is Magpie, the eatery next door to the vacant five-story Hanley structure. Owner Stephanie Caltagerone evacuated the restaurant just before 1 p.m., Sunday, June 25, when the fire broke out.

She hasn’t been open since and says the building’s owner, Hanley Lofts LLC, controlled by Urban Equity Properties President and CEO Justin Fern, is largely to blame.

Caltagerone initially took to Facebook to voice her frustration. In a post last week, she said Fern’s attempts to save the building have come with grave repercussions.

“Thanks to Urban Equity Properties, Justin Fern and Gary Anderson our building has sustained 3 more days of damage and we are expecting more rain this evening,” Caltagerone posted Thursday. “There is an enormous amount of standing water on our roof due to the debris from the building next-door clogging o(u)r drain.”

Since then, she says water damage has tripled.

Fern told The Times during the fire that he deferred decisions regarding the building to the city, something he said was necessary as firefighters battled the blaze. But he did not agree to knock down the building once the fire was out.

“I allowed the proper authorities to do what they needed to do to secure the site,” Fern said.

He said he was then asked to take expensive and immediate measures to stabilize the building or demolish it. The developer decided meeting those demands was not economically feasible, so Fern joined the city in announcing the plan to raze the building he planned to turn into an apartment complex.

Within 48 hours, however, Fern learned the project may still qualify for historic tax credits even though the building lost the fifth floor, leading to a hectic few days around the 1901 structure.


The city’s Building Code Official Thaddeus Mack said the fire chief and investigators had to wait for daylight last Monday morning, June 26, to make any decisions on the fate of the building.

“We couldn’t just continue hammering away at this thing overnight. We had to preserve the safety of the other buildings.”

“Demolition should have been started Monday (following the fire),” Caltagerone argues. “There were a lot of authorities on site that night saying the building couldn’t be saved.”

But the city says that Fern had time under law to respond to any order to tear the building down. UEP was notified Monday of the city’s intent to carry out a demolition. That gave Fern a Tuesday afternoon deadline to respond.

Meanwhile, local architect Gary Anderson had, without contact from Fern, lobbied the city to delay any decisions on the structure. On Tuesday, the Rockford Register Star was reporting that Anderson felt the building could be saved.

City officials say Anderson called them the morning after the fire citing concerns over the use of the wrecking ball to remove the top floor. But their concern was for the public safety, not the possible preservation of the structure.

Anderson is a longtime proponent of using historic tax credits for projects throughout downtown, from which the Hanley would have benefited.

By Wednesday, with Fern concurring with the city’s initial evaluation that the building come down, officials began seeking contracts to begin demolition. A bid from Northern Illinois Services (NIS) was placed at $500,000, with another bid of $800,000 coming Thursday morning.

On the hook for a pending demolition, plus what Fern had already paid for the building, UEP asked if it could solicit its own bids to bring down the building. Mack says the city gave Fern’s company a Thursday afternoon deadline as it told NIS to begin prepping its crews.

Fern filed a temporary restraining order Thursday in the hopes of stopping the wrecking balls. But a Winnebago County judge denied his request and demolition began Friday, June 30.

Caltagerone says that was nearly a week too late. But the city says its schedule for the demolition was ultimately unchanged by Fern’s actions. Mack says many things were at play.

Demo work continued Monday on downtown’s Hanley Building, as crews carefully dismantled the building’s south side. Photo, Don Bissell

“We had to be able to take down the building without damaging the southern buildings,” Mack said this week. “We got a wrecking ball out there Sunday night to start on that top floor because that top floor was a different type of construction.”

Mayor Tom McNamara says safety was his No. 1 concern as decisions about the building were made throughout the week.

“Public safety comes first. No. 2 was making sure we’re doing everything we can in our powers to make sure the adjacent buildings are secured.”

Once the Hanley structure was secure, NIS lined the roofs of the southern adjacent buildings with hay bales, plywood and tarps for protection. Some damage had already been done by the fire, including bricks falling during the blaze taking out skylights and other fixtures. That was compounded by drains backing up as debris shed the Hanley, and those drains remained blocked Wednesday as torrential rains hammered the area.

McNamara said getting the owners and tenants back into those structures as quickly as possible was critical for the city.

“We made sure they had the opportunity to get into the buildings last week, and again (Monday),” he said. “That’s with demolition ongoing. But it had to be safe.”

McNamara added that further resources were made available to the Hanley’s neighbors.

“We’ve made them aware of different tools the city has for economic development, different tools we have available if they need help.”

Flames and smoke pour out of the Hanley Building as Rockford Fire crews battle the blaze, Sunday, June 25. Photo, Carly Rice

What’s next

Fern’s company purchased the Hanley Building in 2014 for $355,000. More than a year’s worth of planning and staff time will put his losses north of $1 million on the Hanley, he says, adding he hopes a thorough investigation into the fire’s cause can be done contemporaneously to demolition.

The City of Rockford says demolition will cost $500,000, which it plans to recoup from Fern’s companies.

“I didn’t want to see another vacant lot downtown when we have a housing project like this on the horizon,” Mack said. “Unfortunately, that didn’t happen.”

In the meantime, Caltagerone and her staff are in limbo.

“There’s no money coming in,” she said. “Personally, I am not making any money and I don’t know how long I can carry everything.”

She said the next step after the demolition is complete and her building is stabilized is for insurance adjusters to put a value on the damages. As of this report, Caltagerone says her roof is damaged, her electricity has been shut off, and prepared food is still on tables from when customers evacuated the room and things are only getting worse.

Caltagerone is thankful, however. She said as losses continue to mount, firefighters should be commended for a job well done.

“They did an exemplary job,” she said. “They prevented our building from catching fire.”

Officials say that as of Monday they were working to hand-demo the south wall of the burned out Hanley in the hopes of minimizing damage to the adjacent buildings.

Fern said while he sympathizes with Magpie and the other adjacent businesses, he isn’t receiving special treatment from officials. He is also barred from his property.

“There are fences around the building,” Fern said. “Anyone who enters the site can be arrested. It’s the law. I didn’t write it.”

The redevelopment process on the Hanley Building was set to begin in a month. Fern says he will evaluate his options for a replacement project.

“We were about to go in front of city council,” he said of the planned $9 million apartment building project. “There were a few minor things to clear up, but everything was ready to go.”

That didn’t stop rumors and allegations from circulating on social media. Attorney Jeff Orduno said Friday he was prepared to take legal action against those who publicly accused Fern of having direct involvement in the fire. A host of users made allegations that the developer was complicit in the blaze in order to collect insurance proceeds and political favors.

“As to everyone who has arguably defamed Justin, Urban Equity Properties LLC, and/or Hanley Lofts LLC on social media or elsewhere, you have until July 3, 2017 to retract your libel and slander or make an apology,” Orduno said. “By July 5, 2017, I am suing everyone who stands by their defamatory blather by leaving it posted or not retracting it. Everyone.”

No suits had been filed as of press time, Monday night.

Structural demolition of the Hanley Building continued Monday. R.

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