By Kevin Haas
Rock River Current
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ROCKFORD — A financial deal that promises to revamp the former Barber-Colman complex on South Main Street took a key step forward on Tuesday.
The City Council’s Planning and Development Committee voted 4-0 to approve a multifaceted redevelopment deal with Milwaukee-based J. Jeffers & Co. to transform the vacant factory into 964 living units and roughly 130,000 square feet of commercial space over about 10 years. The yes votes came from Democrats Gabrielle Torina, Janessa Wilkins, Karen Hoffman and Bill Rose.
The vote came at the tail end of a roughly two hour and 20 minute meeting in which the city and J. Jeffers delivered a presentation on the plans for the property and the redevelopment deal before aldermen dug in with questions vetting the proposal.
“There are a lot of people in our community who are concerned that their streets aren’t fixed, their curbs are deteriorating, the medians at many of our intersections are crumbling, and they say why isn’t this money being spent on improving what is already here,” said Alderman Chad Tuneberg, a Republican who represents Ward 3.
Background: Here’s the deal: Rockford lays out incentives to spur $420M revamp of Barber-Colman facility
Others raised concerns about how the city will be protected from its upfront cost if the project fails, how J. Jeffers determined the viability of its project and whether the company would commit to seeing the development through.
Brian Loftin, senior vice president of development, said its market analysis shows the demand for housing. He pointed to another major downtown residential developer, Urban Equity Properties, which has nearly all of its units full as an example. He also said the company’s business strategy is to hold and manage its properties long term.
“We look forward to being a part of Rockford not for the short term, but for the long term,” Loftin said. “Our hope is this continues to spur other development far beyond what we do at this campus.”
The City Council will now consider approving the deal Monday. That date was initially expected to be July 10, but the city has scheduled a special meeting next week.
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The former Barber-Colman factory on South Main Street has been vacant for more than three decades, and it has long stood as a mess of broken windows and decay.
“It’s just time for the city to make this investment. This is a side of town that has been disinvested in for far too long,” Torina said during an emotional plea for council members to support the project. “This would never sit in Ward 1, 3 or 4. … The fact that it has for so many years, it’s criminal, to be honest.”
The deal focuses on the initial $170 million first phase of the development, when nine historic buildings along South Main and Loomis streets will be revamped into 334 apartments and 105,000 square feet of commercial space. A new 336-space parking deck would also be constructed.
Construction would begin on Phase 1A late this summer if approved and be complete in late 2024. Phase 1B is scheduled to begin in January 2025.
“It has to happen. So we have to figure out what we need to do together to make it happen,” Torina said. “We need to do what we need to do to make this happen because this is about people. This is about investing in a side of town that has long felt forgotten.”
Torina’s speech was met with applause from supporters of the project who filled the council chambers.
Photos: Then and now: Barber-Colman complex in south Rockford
The city’s end of the deal includes a $6 million cash advance and two no-interest loans totaling $10.25 million. The loans would be repaid over 17 years starting in February 2030. The cash advance would be recovered as property values at the site increase and more tax dollars flow into the city.
The city would also reimburse $3.5 million in infrastructure costs, including $1.5 million that comes from city water funds. The rest comes from federal American Rescue Plan dollars. And the city would turn over a $2 million environmental cleanup settlement to the developers.
Other city assistance includes creating a new tax increment finance district and reimbursing 100% of what’s generated in that fund from Phase 1A of construction, then 90% from 1B.
“We have many lofty goals for this enormous project,” Mayor Tom McNamara said in a news release. “We want to remove blight, support our neighborhoods, engage our women- and minority-owned workforces and increase market rate housing unit. I’m proud to say that this project accomplishes all of those goals.”
City Administrator Todd Cagnoni told committee members he’s confident the city has managed the potential risks.
“Once construction starts, understanding there’s performance guarantees and requirements related to the overall project, we believe the risk is relatively low in regards to Phase 1A not being completed,” he said.
Phase 1A of construction is expected to generate $650,000 in property tax revenue from the TIF district, which captures property taxes that comes from the increased value of the property into a special fund for redevelopment. That money can be used to make the city whole should the development halt after the first phase, Cagnoni said.
Some of the state and federal revenue sources include $26.5 million in equity from state historic tax credits, $20.7 million from federal historic tax credits, a $4 million state grant and a $6.5 million loan from the U.S. Environmental Protection Agency’s revolving loan fund.
If the site isn’t redeveloped, the city estimates demolition and environmental cleanup will cost between $16 million and $19 million.
Loftin said J. Jeffers & Co. has brought similar projects to the finish line, and he’s confident they will do the same here.
“Were some see blight, we see incredible opportunity,” Loftin said. “Part of that is because we’ve been able to see these transformations first hand.”
This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas.