Tag Archives: Gorman & Company

Creative reuse turns half of former Catholic seminary in Madison into higher-end apartments

Written by Doug Erickson, Wisconsin State Journal

holy name seminary

Several years ago, leaders of the Madison Catholic Diocese realized they had a big challenge on their hands with the Bishop O’Connor Catholic Pastoral Center, a former seminary and home to the diocesan headquarters.

The majestic but aging building on the city’s Far West Side had become costly to maintain, with only about one-third of it being used on a regular basis.

The diocese hired a developer, and today, about half of the building has been converted to private-market apartments, adding millions of dollars to the city’s tax base. The $21 million project celebrated its grand opening in August, and all 53 apartments are now occupied, ahead of expectations.

“There’s more life to the building now — more people, more activity,” said Monsignor James Bartylla, the diocese’s second-ranking official, adding that the project keeps the “legacy property” in the diocese while preserving much of its spiritual and cultural identity.

The building at 702 S. High Point Road, a few blocks south of the Beltline, opened in 1964 as Holy Name Seminary, a high school for boys interested in possibly becoming priests. The seminary closed in 1995.

The building was rechristened in 1997 as the Bishop O’Connor Catholic Pastoral Center, honoring the founding bishop of the diocese. Its new name, Holy Name Heights, brings the site back full circle.

For apartment dwellers, it offers one of the more unusual residential settings in the city.

The diocesan headquarters remain, imbuing the building with a sense of the sacred. Tenants have 24-hour access to the building’s centerpiece, an on-site chapel with soaring stained glass windows and a 360-piece mosaic that rises three stories behind the altar. Mass is celebrated daily during the week.

For a more secular experience, there’s a full-size gym, newly restored to its retro glory. The 72-acre site offers 2.5 miles of walking paths, a running track, a baseball diamond and fields for football and soccer.

Other amenities include two interior courtyards with arched walkways, a theater room with a 100-inch screen, and a lounge with a balcony offering panoramic views of the city and state Capitol.

“It just seems so special here,” said tenant Christina Busse, 33, a stay-at-home mom who lives in a two-bedroom apartment with her husband, Phillip, 35, and their 21-month-old son, Cephas.

Broad appeal

While anyone can live at the site, diocesan officials thought the apartments might attract mostly empty nesters and Catholics. The appeal has been broader.

Busse, who is Lutheran, said she enjoys praying in the chapel and has found her neighbors to be a friendly bunch that ranges in age from young professionals to retirees. Many seem eager to make personal connections, she said.

“People seem to want relationships here,” she said.

The site appealed to the couple for its serenity, its religious aspects, and its amenities, especially the acres of outdoor space their son can explore as he grows. Their apartment is about a 10-minute drive from Epic Systems Corp., where Phillip Busse, 34, works in technical support services. Christina Busse estimated that nearly a dozen other tenants also work at the electronic medical records giant.

Among the couple’s neighbors are Paul and Kate Stauffacher, the kind of tenants diocesan officials knew would be especially drawn to the property. Retirees in their 70s, they are devout Catholics whose two sons graduated from the former seminary.

The connection for Paul Stauffacher goes even deeper. He taught and coached at the seminary early on, then went on to serve as its principal from 1978-87. His apartment is the seminary’s former weight and equipment room where he spent so much time as a coach.

“This just struck us when we saw it,” Stauffacher said. “There is a certain element of nostalgia, but it goes beyond that. We’re daily Mass attendees, so the chapel is very convenient. We love to get out and exercise on the grounds, and our grandchildren love the gym.”

For some, there’s the added appeal of occasionally bumping into Madison Bishop Robert Morlino, who recently moved into one of the new apartments. He had been living for more than a decade in the rectory at St. Patrick’s Catholic Church, three blocks off the Capitol Square.

‘Uncommon’ project

The diocese, which continues to own the property, hired Gorman & Co. to redevelop the site. The company, based just south of Madison, has stayed on as the on-site manager for the apartments.

Gorman & Co. specializes in adaptive reuses of landmark buildings and has had a long association with the diocese. It successfully nominated the former seminary as a historic landmark. The building is now listed on the National Register of Historic Places.

The designation allowed the company to access $5.8 million in historic tax credits — a critical piece of the financing — and also protects the building’s architectural legacy, said CEO Gary Gorman, a lifelong Catholic who grew up in the Madison area and has served as board president of Catholic Charities Madison. The project was “uncommon” and close to his heart, Gorman said.

“It did something really positive for a diocese that I’ve been a member of for 60 years,” he said. “I’m proud of both the physical and financial results, and in particular the fact that a number of people now get to call this beautiful building their home.”

The city has determined that 46.63 percent of the building is now taxable, with the rest remaining tax-exempt due to its religious use, said Scott West, a city commercial property appraiser. The assessed value of the taxable portion is currently set at $3.43 million by the city, but that number reflects only partial completion of the project, West said. The full assessment, out this April, likely will be around $5.1 million, he said.

The diocese’s 2016 tax bill for the site is $77,532. That figure is based on only the partial assessment.

The project’s total costs of $21 million are so much higher than the city assessed value because the total costs reflect work done on the entire site, not just the part turned into apartments, said Ted Matkom, president of the Wisconsin market for Gorman & Co. The project also addressed major maintenance issues on the aging building such as roofing and plumbing, he said.

One-bedroom apartments rent for $955 to $1,285 per month, while two-bedroom units go for $1,369 to $1,970. That’s probably a little less than top-of-the-line luxury units in Madison, but in the middle to upper range, said Rick Mason, property manager.

Bartylla said the project could help other dioceses think creatively about unused or vacant properties.

“I think we’ve shown that you don’t have to sell church property when it’s underutilized,” he said. “There might be an opportunity to continue ownership while finding something that works for both the diocese and the community.”

“It did something really positive for a diocese that I’ve been a member of for 60 years. I’m proud of both the physical and financial results, and in particular the fact that a number of people now get to call this beautiful building their home.” Gary Gorman, CEO of Gorman & Co., which redeveloped the former Bishop O’Connor Catholic Pastoral Center

FREDERICK LOFTS REPRESENTS “TIPPING POINT” FOR CITY

At the dedication of 100-unit market-rate apartment building at the former Pabst Brewery, mayor hopeful for continued growth of downtown housing.

By Michael Horne, Urban Milwaukee, August 13th, 2015

MILWAUKEE - There was a time that when you referred to a city’s “Tipping Point,” you were talking about a catalytic event that led to a community’s decline. Today, the phrase, as applied to the City of Milwaukee, has a different connotation, says Mayor Tom Barrett.

“Milwaukee is at a tipping point,” he told a group of 50 people gathered Wednesday at the dedication of the Frederick Lofts, 840 W. Juneau Ave. “Not a negative tipping point, but a positive tipping point.”

The 100-unit apartment building was developed by Gorman & Company, Inc. at the east end of the former Pabst Brewery.

Prior to the purchase of the long-vacant brewery site by the Zilber Group, “there was no reason to come here,” the mayor said. In fact, the place was so desolate that “even the bad guys wouldn’t come here,” he added.

But today, “what is happening literally before our eyes are young people and the young at heart coming downtown. It’s a national phenomenon,” the mayor said. “Downtown is 3.6% of the landmass and 18% of the tax base” of the city, he said.

As if on cue, the sidewalks outside began to fill with workers from downtown office buildings as they left work, heading to their homes, some in The Brewery neighborhood itself. Gorman & Company developed the adjacent Blue Ribbon Lofts apartment building out of the former Pabst Keg House. In addition, Gorman developed the Brewhouse Inn & Suites one block west. The new development is immediately south of the Brewery Point Apartments, a senior living community.

Ald. Bob Bauman, whose 4th district represents that 18% of the city’s tax base, and is the focus of its tipping point, joked that “groundbreakings and ribbon cuttings are getting routine.”

Ted Matkom, the Wisconsin Market President for Gorman, said the site “was the poster child for blight in Milwaukee.” He recounted the failed attempt to turn the area into an entertainment district that would have required the demolition of many buildings. Such entertainment districts did not survive the great recession, he said. After that effort failed, Joe Zilber declared that the Pabst site “was going to be my legacy.”

Things were tough at first, Matkom said. Some 30 restaurateurs turned down a chance to open what is now Jackson’s Blue Ribbon Pub at the Brewhouse Inn & Suites, including what he called “all the big players.” Today, Jackson’s, run by Mark Zierath, who was in the audience (and who catered the event) “is killing it!” Matkom said. The Blue Ribbon Lofts, dating to 2008, are “100% occupied,” he said. The 90-room hotel has some of the top rates in the city,” and hopes are high for the Frederick Lofts.

As Bauman noted, the location is a success despite being in sight of the County Jail and a state secure detention facility.

John Kersey, the Zilber Group Vice President said “We would not have imagined market-rate housing when we started this thing.”

Today, market rate at the Frederick Lofts starts at $1,350 for studios and $1,790 for a two bedroom unit.

Three models were on display, and I toured them with Gary Gorman, the president of the firm that developed and owns the property. This is 100% new construction, with high-end features like granite countertops and floor-to-ceiling windows. A live-work unit of 696 square feet has a sliding partition that separates the work unit, accessible from the street, from the live unit. For those eager go-getters who like to bound out of the bedroom and straight into the kitchen for a hearty breakfast, there is no door between the two rooms to slow things down.

Gorman noted the floors of the units, which are uniform throughout, and consist of a wood-grain pattern and texture. The material is described in the sales material as “luxury hard surface plank in natural wood,” but it is a vinyl type product. Gorman says from experience, he has to replace carpets every three years, and this material should be more durable. I would rather it express its inner vinylness rather than masquerade as wood, and I found the texture to be unnecessary.

Among the attendees was Jim Haertel, who owns Best Place across the street. He now has 35 employees. His wife Nancy says their facility is nearly completely booked for 2016, including for the wedding of Urban Milwaukee CEO Jeramey Jannene and Alison Peterson and is now taking reservations for 2017. One of the couple’s favorite weddings of 2015 was that of Ald. Nik Kovac and Grace Fuhr in July, where guests arrived by bicycle. Dan McCarthy, who was instrumental in the development of the project, (and was on the wrong side of the Pabst City plan) was there as was banker Jon Mulcahy. Also in attendance was Joy Smith, a resident of the Blue Ribbon Lofts who writes a neighborhood newsletter.

The building has a nice rooftop deck with a kitchenette, and a number of people were gathered there during the event. The building has a partial green roof of sedum that looks in fine shape for a recent installation. The bioswales outside seem to have done their work during recent heavy downpours, as evidenced by the line of silt seen on some of the plants there.

The final word on the tipping point came from the mayor, who said “my wife wants to move downtown!” Barrett says that may happen soon, once the kids are out of the house.

TERRAZA DEL SOL, WESTOOD CATALYST

By John Rebchook, Denver Real Estate Watch, August 8, 2015

DENVER – A groundbreaking ceremony is scheduled for Tuesday for a $15 million, 42-unit apartment building, Terraza del Sol, which is viewed as a catalyst for Westwood, one of the poorest neighborhoods in Denver.

Gorman & Co., in its first Denver project, is developing Terraza del Sol on a 1.3 acre-site at 3116 W. Alameda Ave.

The three-story development will provide housing for those earning 30 percent to 60 percent of the area median income.

Monthly rents will range from $382 for a one-bedroom unit to $733 per month for three-bedroom units.

Qualifying renters would earn from $23,000 to $46,020 annually.

Mi Casa Resource Center, a Denver-based nonprofit that has served the community for four decades, will occupy the first floor, providing a range of educational and economic services.

“We specialize in complex public-private affordable housing partnerships in communities that are revitalizing in an equitable way,” said Kimball Crangle, Gorman’s Colorado Market President.

The City of Denver, Denver Urban Renewal Authority, Colorado Health Foundation, the Urban Land Institute and others have worked for years to bring new investment to the area

Almost a third of all of Denver’s substandard housing units are in Westwood, and 95 percent of the children in that south-central/west Denver neighborhood are eligible for free or reduced-price lunch.

Paul Lopez, the Denver City Councilman for Westwood, grew up in the neighborhood and knows what is it like to grow up poor with substandard housing.

“As a young man, my family constantly moved searching for decent, safe, and affordable housing,” Lopez said.

“Every time we moved, I had to change schools, make new friends, and the six of us would share a two-bedroom apartment,” Lopez said.

Terraza del Sol addresses social issues that have plagued Westwood, according to Lopez.

“By providing the units at Terraza del Sol, we are not only creating affordability, but sustainability in the lives of people in Westwood,” Lopez said.”

The 71,000-square-foot, energy-efficient buildings will embrace healthy living goals. Amenities will include a fitness room, interior bike storage, a large outdoor terrace with gathering and play space for families, a community lounge and media room.

Mi Casa Resource Center will open its new organizational headquarters and Family Economic and Education Center in almost 20,000 square feet in Terraza del Sol.

The space will house Mi Casa and its core partners, providing:

  • Entrepreneurial training;
  • Business counseling and micro-loans;
  • Career training, coaching and job search help;
  • Financial coaching;
  • Tax preparation;
  • English as a second language programs;
  • GED test preparation;
  • Computer literacy classes;
  • And legal consultations.

“We are excited to bring our comprehensive economic and educational services to this beautiful facility in Southwest Denver,” said Christine Márquez-Hudson, CEO and executive director of Mi Casa.

“This will enable Mi Casa to provide easier access and help more families achieve lasting economic stability,” Márquez-Hudson added.

Terraza del Sol is being financed through the Colorado Housing and Finance Authority, State of Colorado Department of Local Affairs, Denver Office of Economic Development, Denver Urban Renewal Authority, Citibank and Enterprise Community Partners, Inc.

Terraza del Sol was designed by Shopworks Architecture.The general contractor is Deneuve Construction Services. When complete, the property will be managed by the Ross Management Group.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

NEW AFFORDABLE HOUSING GETS GOING IN DENVER’S WESTOOD NEIGHBORHOOD

Nonprofit Mi Casa Resource Center will also move its headquarters into the building

By Joe Vaccarelli, The Denver Post, August 11, 2015

DENVER – A new affordable housing development that will also house a prominent Denver nonprofit officially broke ground Tuesday in Denver’s Westwood neighborhood.

The $15 million Terraza del Sol project — developed by Gorman and Company — will bring 42 units of affordable housing to 3116 W. Alameda Ave. The ground floor will serve as the new organizational headquarters of the  Mi Casa Resource Center and include the organization’s Family Economic Education Center.

Mi Casa has served the Latino community in the Denver metro area for the past 40 years; the education center will offer services ranging from legal consultation and entrepreneurial training to GED test preparation and computer literacy classes.

“Residents are not just facing affordability, but access to good quality jobs and education and training,” Denver City Councilman Paul Lopez said. “This project brings both together.”

Mi Casa will sell its current headquarters at 360 Acoma St. The new building should be ready fall 2016.

“This is where we need to be,” Mi Casa CEO and executive director Christine Marquez-Hudson said. “This facility will serve not just families living overhead, but the entire area. I think this is a facility we envision being a catalyst for the community.”

The 42 units will provide energy-efficient one-, two- and three-bedroom apartments that are available to people earning between 30 and 60 percent of the area median income. That translates to between $23,000 and $46,020  per year. These 42 units are part of 337 affordable housing rentals that will be available in Westwood in the near future, according to Lopez.

Rents will range from $382 per month for a one-bedroom unit to $733 per month for three bedrooms. Other amenities at the development include a fitness room, indoor bike storage, media room, outdoor terrace and community room.

The project is financed by Colorado Housing and Finance Authority, State of Colorado Department of Local Affairs, Denver Office of Economic Development, Denver Urban Renewal Authority, Citibank and Enterprise Community Partners, Inc. The building was designed by Shopworks Architecture.

Joe Vaccarelli: 303-954-2396, jvaccarelli@denverpost.com or twitter.com/joe_vacc

http://www.denverpost.com/denver/ci_28622452/new-affordable-housing-gets-going-denvers-westwood-neighborhood?source=infinite

$15M APARTMENT PROJECT KICKS OFF IN WESTWOOD

By Burl Rolett, BusinessDen, August 12, 2015

A ground-breaking ceremony on Tuesday kicked off construction of a new apartment complex. Photo by Burl Rolett.

A ground-breaking ceremony on Tuesday kicked off construction of a new apartment complex. Photo by Burl Rolett.

DENVER – A new-to-Denver developer is breaking into the market with a $15 million apartment project aimed at low-income renters.

Gorman & Co. broke ground Tuesday on Terraza del Sol, a 42-unit affordable housing development at 3116 W. Alameda Ave. The project has been in the works for more than a year, Gorman’s Kimball Crangle said, and started to take shape after talks with Councilman Paul Lopez about rising housing costs in the Westwood area.

“This area has historically been one of the more affordable neighborhoods in Denver,” said Crangle, Gorman’s Colorado market president. “But even the neighborhoods that have long been affordable are starting to get more expensive.”

Plans for the $15 million development call for a mix of one-, two- and three-bedroom apartments set aside for renters making between 30 percent and 60 percent of the area median income. The project is expected to be finished by November 2016. Terraza del Sol will also house nonprofit Mi Casa, which will relocate its Baker headquarters to the development.

C:Revit14049 - Gorman Westwood14049 Grove St Apartments_steve

The 42 apartments are expected to be finished by next fall. Rendering courtesy of Gorman & Co.

Mi Casa, which offers employment services primarily to Latino families, will own a 20,000-square-foot office condo on the project’s first floor. The nonprofit’s condo will be the development’s only commercial space.

Mi Casa has been in Baker for about 13 years, but CEO Christine Marquez-Hudson said the neighborhood is “gentrifying rapidly.” Mi Casa’s headquarters at 360 Acoma St. is under contract to be sold. The deal will close, Marquez-Hudson said, when the nonprofit’s new office in Westwood is finished.

“This is really Mi Casa’s home,” she said. “This is where we need to be now and for the next 20 years and even more than that looking into the future.”

Terraza del Sol is Gorman & Co.’s first development project in Denver, Crangle said. The development firm is also working on a 70-unt affordable housing project at 71st Avenue and Federal Boulevard in Adams County.

Rooms at Terraza del Sol will rent for between $382 per month for one-bedroom units and $733 per month for the three-bedroom apartments, according to a company press release. The 71,000-square-foot building will include a fitness room, an outdoor terrace and a common lounge room.

Though the entire building will be limited to renters making less than 60 percent of the area median income, Crangle said 90 percent of the apartments will be set aside for renters at or below 50 percent.

For a single renter, 30 percent of the area median income for Denver County comes out to $16,800, according to figures released in March by the Colorado Housing and Finance Authority. A single person at 60 percent area median income would make $33,600. For a two-person household, those figures come out to $19,200 and $38,400.

The project is being financed by Citibank and Enterprise Community Partners, as well as the Denver Office of Economic Development, Colorado Housing and Finance Authority, Colorado Department of Local Affairs and the Denver Urban Renewal Authority.

The general contractor is Deneuve Construction Services, and Shopworks Architecture designed the project.

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.