IL

Amerock Project Closer to Being Finalized

By Phillip Reed, MyState.com, May 19, 2015

Rockford-The vacant dilapidated Amerock building sits with broken windows in downtown Rockford waiting on aldermen and developer Gary Gorman  to reach an agreement on a purchase of the property to turn it into a hotel. 

Gorman says “(The Amerock) project is going to happen. We have to explore the risk, we have to explore the ‘what if’ scenarios.” 

That’s why Gorman asked for some amendments to the proposed deal with Rockford. The developer wants more then 500,000 dollars waived in fees for permits and utilities, in exchange for hiring local contractors. Aldermen voted yes on that proposal during Monday night’s city council. 

Gorman says “We will do that. That’s part of the trade off, for the waiver of the fees. But the bigger point in the waiver of the fees is we want to put money in the quality of the hotel.” 

Gorman also wanted an option to sell the Amerock back to Rockford for 250,000 dollars. Aldermen were not in favor of that, saying that would be unfair to taxpayers. They changed the amendment to make any sale back to the city cost one dollar. Gorman did not have any objections to the decision. 

He says “Worse case scenario for the city of Rockford, they keep my 250,000 dollars, they will have the building back that they own now, and it will at least be partially remediated because we’re going to start work on it with the month of June.” 

Gorman says he’s confident in the city of Rockford and the Amerock project. He adds, “On 31 years (my company has) never started a project and not completed it, so that’s just not gonna happen.”

Warren Buffett to invest $18M in Gorman & Co.’s downtown Rockford hotel

By Brian Leaf, Rockford Register Star,  Jan. 29, 2015

ROCKFORD — Warren Buffett’s money has joined Gary Gorman’s plan to turn the former Amerock building into a $64 million hotel and conference center on the west bank of the Rock River.

But the water is not placid.

Gorman is concerned about a separate downtown hotel plan pitched by Joseph James Partners. The Rockford developer wants to put a $14.5 million, 76-room boutique hotel at 134 N. Main St., about six blocks north of the 150-room project that Gorman hopes will carry the Embassy Suites banner. Gorman has applied for the brand with Hilton Worldwide.

A Jan. 24 report from Chicago-based Hunden Strategic Partners, which was hired by the city and Rockford Area Convention & Visitors Bureau to assess the local hotel market, suggests that there is enough room for both projects, saying the proposals represent distinctive products and would provide a critical mass of lodging options downtown instead of just one.

Gorman was drawn to Rockford by a group of historic preservation, Friends of Ziock, that didn’t want to see the city’s original skyscraper demolished. Gorman originally estimated that it would cost $53 million to turn the old factory, first known as the Ziock Building, into a hotel and meeting space.

The price is now $64 million and includes an $18 million investment from a subsidiary of Buffet’s Berkshire Hathaway Inc. The Wall Street Journal highlighted the Amerock project in a story Thursday about EB-5, an immigration program that allows foreign nationals to obtain a U.S. visa if they invest $500,000 in a U.S. project that creates at least 10 jobs.

Gorman’s EB-5 investors, mainly from China, will put $46 million into the Amerock project, which city leaders see as a cornerstone to revitalizing an aged central city.

“A lot of aldermen see this as a showcase development and don’t want to do anything to hinder that,” said Ald. Tim Durkee, R-1, who chairs the city’s Planning and Development Committee.

Late last year, Joseph James, a development company run by SupplyCore CEO Peter Provenzano, proposed developing two hotels: one in the city’s oldest building, the Chick Hotel, and another in the building known for its last tenant, Trekk, an advertising agency that dropped its lease in the decaying building and moved to the east side.

Joseph James later dropped the Chick Hotel from its plans and decided to focus on the two-story Trekk building, 134 N. Main St. The company would add three floors, turning it into a five-story hotel and restaurant. Joseph James has been working with IDM Hospitality Management of Madison, Wisconsin, on its proposal, which has been introduced to the Rockford City Council but not approved.

Joseph James cited a memo from Hunden to support its proposal to Durkee’s committee. The memo suggests that there is room enough in the market for Joseph James and Gorman to succeed. The proposal was introduced but laid over for a month so the City Council could hear from Gorman.

The Register Star could not reach Provenzano or Bryan Davis, director of government affairs for Joseph James, on Thursday for comment.

Observers have commented that they thought they’d never see the day that developers would compete for projects in downtown Rockford, so it is a “positive trend that should be encouraged by both the public and private sector,” Gorman wrote in an email Thursday to Mayor Larry Morrissey, aldermen and city staff.

“It is very clear from our experience that a vibrant city center is the key to creating a thriving community. Having said that, I am very concerned about too many hotel rooms coming into the unproven downtown Rockford market at one time.”

Gorman said his company, which operates in 25 cities in five states, had relied on an earlier Hunden report when it made its decision to invest in a downtown hotel. “The fact that the Hunden letter stated that the market could absorb both our project and the Joseph James proposed project seems to contradict their concerns expressed in the market study they completed just over a year ago.”

Gorman wants first crack at opening the downtown hotel market. Final plans for Amerock will be complete by next Friday, and construction bids will go out the following week, he said.

“We remain confident that we will get the Amerock project done successfully, but bringing on competition before our project is stabilized is not helpful,” he wrote. “I hope that once we are up and stabilized, the market is such that it will support additional hotel rooms. If that is the case, we will welcome the Joseph James project or others like it.”

Hunden reiterated in a Jan. 24 memo to the city and the tourism bureau that two hotels would be better than one and would attract the guests needed for success. Hunden said the market could handle the extra rooms, although simultaneous openings could be problematic.

“However, if the projects open at least six months apart, this will allow each a ramp up-period,” the latest Hunden memo said. “Such a period is the toughest for any hotel, so the spotlight and market demand should be focused on each for their first few months.”

City Council Questions Amerock Renovations

amerock building (Alexis McAdams)

               
City of Rockford aldermen met today at city hall to talk with Gorman and Company CEO, Gary Gorman. He discussed the process of the proposed Amerock renovation project and said re-developing the deteriorating building would drastically improve downtown Rockford. Although Gorman sees the benefits, he ran into some resistance during his presentation.      
By Alexis McAdams, Channel 17, WTVO, March 28, 2014
 
ROCKFORD – City of Rockford aldermen met today at City Hall Friday to talk with Gorman and Company CEO, Gary Gorman. He discussed the process of the proposed Amerock renovation project and said re-developing the deteriorating building would drastically improve downtown Rockford. Although Gorman sees the benefits, he ran into some resistance during his presentation.
An eyesore in downtown Rockford could soon receive a $70 million dollar makeover. The proposal was put before Rockford city leaders on Friday.
The Amerock building in downtown Rockford is a historical landmark that’s been vacant for years, but with the building falling apart, the city is working on a project that could potentially change the skyline of downtown Rockford.
The CEO of Gorman and Company, Gary Gorman told the city council that this project would benefit the Forrest City.  “This would be a bold move for the downtown, it would inject energy into the downtown, and it would encourage investment.
Although Gorman sees the benefit, the Rockford city council is not 100% on board.  “it is a wonderful project, and we do need it in this community, but paying for it is a different story.” said 7th Ward Alderwoman Ann Thompson-Kelly
All together, the hotel and convention center renovations will cost $70 million dollars. Gorman and Company will fund most of the project, paying $50 million. The city also must pay for parking and road improvements and a parking garage which will cost around $20 million dollars.
The parking garage would be built next to the Amerock building near Davis Park. Alderman Teena Newburg expressed concern with the structure, saying it would not help the city as a whole. “we need more parking for the county, for the court system, and the city. It would help the people and businesses downtown.” said Newburg.
Despite the push back from the City of Rockford alderman, Gorman said the project will go on. “we put a lot of time and effort into this, and so has the city, the mayor, and the alders, so we are confident it will get done.