City, Urban Equity advance talks over demolition costs of Hanley

ROCKFORD — Six months since an arsonist set fire to the historic downtown structure, its owner and the city are still working through the costs of the former Hanley Building.

Urban Equity Properties was on the hook for what was an estimated $600,000 for the demolition and clean up of the 5-story structure that was torched June 25. The building was the first targeted in a series of arsons that rocked the city in late June and early July.

Investigators ultimately ruled three of the four fires to hit downtown that week as intentional: the Hanley and two separate fires set on South 7th Street. The arson investigation is still ongoing, officials have said. A fourth fire on South Main was ruled out as a potential arson by city, state and federal investigators.

The City of Rockford said Thursday that the total cost of demolition on the Hanley had come in under previously reported estimates. A spokesperson told The Times $475,934 had been spent to secure the property after the blaze, according to the most recent figures from City Hall.

Officials said in the aftermath that Hanley Lofts LLC, a company owned by UEP President Justin Fern, would be on the hook for the cost of demolition. In addition, a pending $60,000 code violation was attached to the Hanley property in the aftermath of repair work done on vaults under sidewalks surrounding the building around the time of UEP taking control in 2014.

Both parties said Thursday that talks over the outstanding dollar amounts were ongoing, and UEP General Counsel Jeff Orduno says he hopes to have an agreement in place over the next few weeks.

Read more: What the Hanley happened?

“As far as Hanley goes, we’re going through the process with the mayor’s office now and we expect to be talking to the alderman very shortly on something that would make good and make whole so that there is no taxpayer money that goes unpaid with regard to the demolition on the Hanley Building,” said Orduno.

UEP said it’s moving forward on a new plan for the former Hanley space, which was in advanced planning stages for development when it burned, and has been working with city lawyers and the council. Orduno said resolving the demolition costs was a key step in that process: “We don’t want any open issue with the city; we want to get that closed out.”

Orduno added that the proposal for the future of the Hanley site was working its way through city channels but could not offer specific details of the ongoing negotiations or plans.

Reached for a comment, a spokesperson for the city said, “We have been engaged in ongoing discussions with the property owner to find a solution for the city to recoup the costs of demolition.” Specific officials were unavailable for comment due to holiday schedules.

UEP’s liability insurance on the Hanley would not cover demolition costs or the loss of the structure, court filings revealed in July.

Despite claims by some persons on social media, city code hearings are still set for January 10 for the former Hanley location and the adjacent 307-309 S. Main St. building, which a UEP company acquired in October. UEP says it has spent around $150,000 in repairing the building, including a party wall between the two sites.

The Rock River Times will have more on the ongoing Hanley fire fallout in the coming days. R.

Jim Hagerty contributed to this report.

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