Illinois

The Long and Winding Road: How an $87.5 Million Hotel Gets Built in Rockford, Illinois

Back in 2012, Larry Morrissey, the now-retired Mayor of Rockford, Illinois and Gary Gorman, Chairman of the development company, Gorman and Company, sat at a hotel bar in Shanghai, China over a glass of scotch. It was the beginning of a six-year project that is that has led to the construction of a $87.5 million Embassy Suites Hotel and conference center in downtown Rockford, Illinois.

Now this is not any simple hotel. This is the renovation of a hulking, 13-story manufacturing plant that was formerly owned by a company called Amerock. It has been empty for 25-plus years and has served as a massive eyesore in Downtown, Rockford.

It’s been a long road with lots of detours and barriers. But after years of political battles (including a 7 to 6 City Council vote to approve the project) and financial challenges (the project has $30 million in EB-5 funding from international investors), the transformational project is now under construction.

Former Rockford Amerock factory’s transformation has begun

Originally published in the Rockford Register Star

ROCKFORD — Seven years after Rockford bought the 13-story dilapidated former Amerock factory and the building appeared headed for near certain demolition, the site is buzzing with the hum, whine and crashes of construction crews.

They’re taking the first steps of a two-year journey to transform what for decades was an eyesore and sad symbol of Rockford’s industrial past into a four-star hotel and conference center.

By December 2019, Gary Gorman of Gorman & Company expects to put the finishing touches on an $87.5 million Hilton Embassy Suites and Rockford Conference Center that promises to change the face of downtown, the first impression of visitors and perhaps how the city feels about itself.

“People are going to come to this hotel and conference center and they are going to be impressed,” Gorman said. “The image of Rockford is going to be created by the first impression they get when they walk into the hotel, when they walk into the conference center, when they go up to the 12th floor deck and they see the view down the river — which is the most spectacular view in the city. I think it’s going to change what people’s impression is of Rockford.” 

The 160-room hotel and 40,000-square-foot conference center will feature two restaurants, rooftop lounge with two levels of outdoor seating, access to Davis Park, swimming pool, game room for kids, and plenty more. Gorman is already marketing the facility to event planners.

And he is also preparing what he calls “sizzle factor” amenities.

“Let me give you an example: private elevator to a two-level spa with an outside deck with hot tubs and view of the river and the city,” Gorman said. “We have a whole series of those kind of things.”

Some said this day would never come: Rockford had at one point planned to grind the remains of the factory tower into footings for the rebuilt Morgan Street Bridge.

But the Friends Of Ziock, a group of downtown boosters and historic preservationists who adopted the name of the building’s original owner, worked to save the building, which was the city’s first skyscraper when it was built in 1912.

Although the Illinois Historic Preservation Agency had given Rockford permission to tear the building down, the agency reversed course after getting a letter from Rockford resident and retired engineer Don Bissell, who made a case for saving it.

The building was eventually placed on the National Register of Historic Places and must be redeveloped in compliance with historic preservation standards.

“This is a project that is going to get done,” Bissell said. “It’s going to change the whole profile of downtown.”

Former mayor Larry Morrissey championed the project and took four trips to China to help Gorman secure $30 million in foreign investment. Rockford is paying for construction of the $12.5 million conference center and Gorman has secured mortgages and historic preservation tax credits to finance the project.

Morrissey said the project shows what Rockford is capable of doing.

“We will reach a new level of success in downtown that we haven’t seen in my lifetime,” Morrissey said.

Since closing on financing in late December, construction crews have already abated asbestos in the building. Interior demolition is underway to prepare for construction. Crews use a “skip hoist,” essentially a freight elevator, that was installed on the exterior of the building and is capable of lifting 6,000 pounds of heavy equipment between floors, said Gorman & Company Construction Superintendent Nick Panzica.

An industrial-strength pressure washer uses water and glass pellets to blast away lead paint, dirt and debris from interior and exterior walls, while a lead neutralizer keeps contaminants at bay. A separate machine captures and recycles the water. New windows that comply with historic preservation requirements will soon be installed.

“I have never been so excited about seeing a construction elevator go up,” Rockford architect Gary Anderson said. “There is a sense of arrival, that this thing is finally on its way.”

Jeff Kolkey: 815-987-1374; jkolkey@rrstar.com@jeffkolkey

Closing means new beginning for Rockford’s Amerock factory

By Jeff Kolkey, Rockford Register Star

ROCKFORD — Construction workers were already removing lead paint from the former Amerock factory as years of work culminated this week with the closing of a series loans and investments that will finance the project.

Gorman & Company CEO Gary Gorman said that where a downtown eyesore currently stands, Rockford will have a $64 million Hilton Embassy Suites and $12.5 million Rockford Conference Center when construction is complete.

“The hotel and conference center represent a true public-private partnership,” Gorman said. “One could not have been done without the other, and many people pushed through five years of hard work to make it happen.”

The project promises to generate 123 permanent hotel jobs, 553 construction jobs and millions in economic activity.

Gorman said this is his 34th historic rehabilitation project. He had an American flag planted last week atop the former Amerock building to signal that the project is moving forward.

In addition to removing lead paint from the structure, asbestos remediation also must be done as part of Gorman’s plans to remodel the building into a four-star hotel.

The 160-room hotel will overlook the Rock River and include a rooftop lounge, first-floor restaurant, bar with outdoor patio, swimming pool, fitness center, business center and other amenities.

“This is a major turning point for our downtown,” Mayor Tom McNamara said in a news release.

Jeff Kolkey: 815-987-1374; jkolkey@rrstar.com@jeffkolkey

The Grove at Keith Creek

On a beautiful, sunny, early fall morning, more than 175 people from our community joined together on September 28, 2017 for the official Grand Opening & Ribbon Cutting Ceremony at the Grove, at Keith Creek.

What an awesome celebration it was! Special thanks to Master of Ceremony, Andre Blakley, Illinois Market President of Gorman & Company, and Father Beauvais who provided the Invocation. Thanks to the many presenters, for your all your kind words and support; Ron Clewer, Former CEO, RHA; Jerry Lumpkins, Chairman of the Board, RHA Housing Commissioner; Tom McNamara, Rockford, Il, Mayor; Andy DeCoux, Director of Multifamily Finance, IHDA; Antonio Riley, Former Regional Administrator Region V – The Midwest Chicago Regional Office U.S. Department of Housing and Urban Development (HUD); and Larry Williams, CEO, RHA.

The Grove at Keith Creek is the new, multi-family residential community with 49 apartment homes set on a six -acre landscaped campus, which is the New Blueprint for Affordable Housing in Rockford.

The community was able to tour the grounds and view the one and two-story townhome/duplex style buildings, designed in traditional colonial and craftsman style to enhance and compliment the surrounding neighborhood.

The community center was designed to provide the stage for educational and cultural programming, along with a state of the art computer lab for the residents. The children’s playground was a highlight and garden plots are set for spring planting which are also located on the six-acre site.

Gorman & Company in conjunction with the Rockford Housing Authority and Bridge Rockford is proud to share this short video documenting the Ribbon Cutting Ceremony. This Affordable Housing plan is the initial component of a five-year masterplan to transform conventional public housing in Rockford, IL.

The Grove at Keith Creek is a public/private partnership developed by Gorman & Company with Bridge Rockford Alliance, a nonprofit subsidiary of the Rockford Housing Authority, the Illinois Housing Development Authority (IHDA), Boston Capital and Citibank.

Gorman & Company is partnering with the Rockford Housing Authority (RHA) to replace and revision 385 existing units of public housing at scattered sites, incorporating fresh architectural solutions, social and educational support and a strong homeowner component for the community. “A great community starts with a commitment to being a great neighbor”, stated Andre Blakely, Illinois Market President, Gorman & Company, Inc.

Extraordinary thanks to all guests and event speakers, as well as the staff of all the vested organizations who provided this dedication event for our community. “This marks the beginning of the next chapter of housing in the Rockford community, stated Larry Williams CEO of RHA. “This Affordable Housing plan gives our residents new opportunities as well as the capability to expand our services as needed, in the years to come for our community residents.”

Gorman buys Amerock building in downtown Rockford

By Brian Leaf, Rockford Register Star, May 28, 2015

ROCKFORD — Gorman & Co. has completed its purchase of the Amerock building from the city of Rockford.

Under a contract approved by the Rockford City Council, Gorman paid $250,000 for the building.

The company said pre-demolition work will start within a week on the 13-story abandoned factory that Gorman intends to turn into a 160-suite hotel and conference center. It will also feature restaurants, retail space, a swimming pool, business center and a top floor cocktail lounge. Cost of the project is $67 million.

Gary Gorman, CEO of the development company that specializes in historic buildings and revitalizing urban neighborhoods, said ownership was a big step toward completion of the project.

Gorman hopes to raise about $25 million for the project from Chinese investors through an immigration program, EB-5, that provides foreigners a green card if they invest $500,000 in a project that creates at least 10 jobs. Gorman said this month that advisers in China told the company that it would be easier to recruit investors if Gorman owned the building.

The company hopes to have its financing package complete later this summer. The historic renovation of the 104-year-old building, built by William Ziock Jr. for his textile businesses, is expected to start in September.

Our View: Downtown Rockford pieces fitting together nicely

By The Editorial Board Rockford Register Star

Posted May 19, 2015 at 2:03 PM

Monday night’s Rockford City Council vote amending the development agreement with Gorman & Co. may seem like an incremental step toward downtown revival, but don’t underestimate its importance.

Aldermen not only showed confidence in the Gorman project, a $67 million hotel and conference center at the former Amerock/Ziock building, but their 11-1 vote sent a signal to other developers that they are willing to work in the best interests of all parties. Rockford is open for business.

Gary Gorman, CEO of the company that bears his name, had asked to have an option to sell Amerock/Ziock back to the city for the $250,000 he paid for it. That made aldermen nervous that he would back out. So, the deal changed. Now, Gorman will sell the building back to the city for $1 if the project is scrapped.

The worst-case scenario would be that the city resumes ownership of a partially cleaned-up Amerock/Ziock with $250,000 in its coffers.

That’s unlikely, and Gorman sounded confident Monday when he said: “This project is going to happen.”

Gorman is expected to close on the building Wednesday and with that move he will have spent more than $1 million on the project. That’s a huge commitment and doesn’t account for staff time that’s gone into the development.

The buzz about downtown Rockford has never been greater. Gorman is the biggest piece of the revival puzzle, but there are plenty of pieces in place with undoubtedly more to come.

Work on the downtown sports complex, another huge puzzle piece, is progressing well, and the Rockford City Market pavilion looks very good as the market prepares to open its sixth season Friday.

The market has been a catalyst for downtown development. It has shown that people will come to downtown Rockford regularly if you give them a good reason. The market set a record for attendance in 2014 with 75,500 visitors, an amazing number when you consider there were quite a few Fridays with unpleasant weather last year.

This year the pavilion will protect market visitors from the elements, so we expect a new record.

Several small-business owners started at the market and have opened stores downtown.There still are plenty of empty storefronts downtown for aspiring entrepreneurs. As projects such as Gorman’s and the sports complex take shape, those empty spaces will become more desirable.

We can’t remember a time when so many reputable developers were interested in the center of the city. Urban Equity Properties, led by Justin Fern, plans a $10 million development in the 50,000-square-foot Hanley building and is working on other downtown properties.

Morgan Management wants to turn the Rockford Trust Building into 62 downtown apartments, with space for retail and service businesses on the ground floor. The price is nearly $13 million.

Joseph James Partners, led by SupplyCore CEO Peter Provenzano, and Frantz Community Investors of Cedar Rapids, Iowa, also are looking for downtown opportunities.

You can feel the momentum build from our offices here in the downtown News Tower. There has been significant private investment in an area that had seen mostly public dollars spent on it.Downtown Rockford finally appears ready to live up to its potential. Years from now, we will be able to look back at Monday night’s vote as a vital step in the process.

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.”

Gary Gorman says he’s committed to hotel project in downtown Rockford

By Brian Leaf Rockford Register Star

Posted May 17, 2015 at 12:00 PM Updated May 17, 2015 at 8:45 PM

ROCKFORD — Gary Gorman asked for an audit on how much his company has invested into the vacant, asbestos-filled Amerock/Ziock building that he wants to turn into a $67 million Embassy Suites hotel and conference center.

The accountant’s report: $760,418.16, said Gorman, CEO of the Wisconsin-based company that bears his name. That’s what he’ll lose if the project dies.

That investment, which doesn’t include $75,000 to apply for a hotel franchise and staff time put into the project since 2012, will surpass $1 million Wednesday if, as expected, Gorman buys the property from the city of Rockford for $250,000.

“The concern I’ve heard is that Gorman is not committed to this,” he said. “I just smile when I hear this.”

But worried frowns and questions about Gorman’s commitment rose last week when aldermen considered changes to the company’s development plan. Those changes include a city waiver of $550,000 in fees for permits and utilities, a $3 million federal loan backed by the city and an option to sell the building back to the city for $250,000.

The City Council is expected to consider the changes Monday.Aldermen have questioned whether the changes to Gorman’s development plan are a sign that the deal, which relies on $25 million from Chinese investors, is “imploding,” as Ald. Frank Beach, R-10, put it.

Hardly, said Gorman, who has 30 years of putting together development deals and says they are prone to challenges and change.

“The real key in getting a project done is persistence, pounding away at it until it comes together,” he said. “And I’m betting an awful lot that (Amerock) will.”

So are taxpayers.

The Amerock deal has many parts. It relies on $16 million in city infrastructure investments; development of the $24 million Ingersoll indoor sports center; state and federal historic tax credits; EB-5, an immigration program that gives foreigners a green card for investing $500,000 in job-creating projects; a bridge loan for construction; approval of a hotel brand; and tight construction deadlines.

“This is a lot more complex than the average redevelopment deal that we have worked on,” said Mayor Larry Morrissey, who expects the amendments to be approved Monday.

Gorman Illinois Market President André Blakley met with aldermen last week to address their concerns and questions about the hotel project.

One question centered on why Gorman needs an option for the city to buy back the Amerock building for $250,000. The answer is EB-5, which Gorman hopes will help it raise $25 million from investors in China.

Gorman said he hadn’t anticipated buying the building until later this year, when what developers call the “financial stack” is in place: all of the financial elements — such as equity, loans, tax credits and outside investments — needed to finish a project

Our View: Give Gorman the tools he needs to make downtown Rockford hotel project work

By The Editorial Board Rockford Register Star, May 17, 2015

There seems to be some angst among Rockford aldermen about the future of “The Cinderella Project.” We understand their concerns but are confident that downtown will have a hotel by the end of next year.

Aldermen will be asked Monday night to approve amendments to the development agreement with Gorman & Company, which plans a $67 million downtown hotel and conference center in the former Amerock/Ziock building. We urge aldermen to do so.

“So we’re at the dance, and the clock’s getting close to midnight. We want to make sure Cinderella keeps her dress on,” Rockford Mayor Larry Morrissey said last Monday at the Planning & Development Committee meeting.

Hence our reference to “The Cinderella Project,” which seems appropriate for a building that we expect will be a rags-to-riches story when completed.

The change that seems to make aldermen most nervous is Gorman’s request to have an option to sell Amerock/Ziock back to the city for the $250,000 Gorman paid for it.

Good businessmen hedge their bets, and Gary Gorman, CEO of the company that bears his name, is a good businessman. Gorman has invested more than $760,000 in the project, so the option request should not be seen as a warning that he’s getting cold feet. In a worst-case scenario, he’d like to get some of his investment back.

Even if that happened, which we think unlikely, the city would be better off than before Gorman came on the scene.

Gorman plans to close on the building May 20 and as soon as the company takes ownership, remedial work — such as asbestos removal and demolition — will begin. If things didn’t work out, the building would be in better shape for the city if it had to buy the property back Aug. 1 and would be more enticing to the next developer.

Gorman also wants the city to waive $500,000 in permit fees in exchange for his buying local furniture, art and fixtures for the building and making “the attempt to utilize local contractors, tradesman, makers and artists” during construction.

If there were no project, there would be no fees, so this also is a reasonable request.

Gorman wants a 300-vehicle parking lot on the site of the former Tapco building, south of Amerock, instead of on Green Street where it would have been attached to an Amtrak train station.

Downtown could use more parking no matter what the fate of the hotel project.

Aldermen, especially those who have served for many years, have been disappointed more often than not when it comes to downtown development proposals. So have we, and mostly we’ve taken a we’ll-believe-it-when-we-see-it attitude toward downtown development.

However, Gorman is a reputable company that not only has had success in its home state, Wisconsin, but has done good work in the city of Rockford. Gorman’s record should ease aldermen’s concerns.

Also, aldermen should consider that Gorman has increased the size of the project since it was proposed in February 2014. What was a $50 million project is projected to be $67 million. Gorman wants more hotel rooms, going from 150 to 160, and wants to double the convention space.

Those are indications that Gorman is committed to Rockford.

Financing such a huge endeavor is helped by the use of state River Edge Historic Tax Credits and through an EB-5 program, which allows foreigners who invest $500,000 in a project that creates 10 jobs to get green cards. There is huge interest among Chinese investors in the EB-5 program, so odds are good that Gorman will get the money he needs.

Gorman has experience with EB-5. The company raised $15 million for the $19 million historic renovation in Milwaukee of the former Pabst brewery into the Brewhouse Inn & Suites. Gorman wants to raise $25 million for the Rockford project.

We appreciate aldermen doing due diligence on this project and hope they agree with us that the rewards far outweigh the risks in approving the amendments for this vital project.

Gorman Close to Deal with Hilton for Amerock Project

By Mike Buda, May 14, 2015

ROCKFORD (WIFR) — Major developments surround Rockford’s downtown Amerock building. Wisconsin-based developer Gorman and Company tells 23 News that they have received preliminary confirmation the chain will be the franchise for the Amerock project.

Gorman Illinois Market President, André Blakley, says it’s an exciting time to be in Rockford.

Construction is about to begin on Rockford’s former Amerock building, a structure that’s sat empty for more than two decades.

“We think this will be a significant development,” said Blakley. “Significant in terms of jobs, significant in terms of just reactivating this area and revitalizing the downtown district.”

Amerock is not the only thing being re-used and revitalized. As a part of an agreement with Gorman, Rockford is looking at ways to update neighboring Davis Park by complimenting its surrounding buildings.

“It was designed to be a festival park,” said David Sidney, Rockford’s Comprehensive Planning and Design Manager. “We’re trying to assess whether that still makes sense to go forward and how to make it more active in light of the hotel and conference center and all of the other development happening around it.”

Rockford aldermen still need to approve the updated contract with Gorman. It would provide set deadlines for specific parts of the project to be completed.

“We certainly appreciate the stewardship of our council on these issues in making certain that they test these ideas and make certain that the city’s interests are well taken care of,” said Rockford’s Legal Director Patrick Hayes. “We’re excited to be able to continue to present opportunities for this project to move forward.”

Blakley says by the time the new 160 room Amerock Hilton opens up in early 2017, downtown Rockford should be booming once again.

Gorman says they will be closing on the property in the next week or so and should have their finances approved by September.

Hayes says that on the off-chance that Gorman does not get the money, the developer would have the option to sell the building back.