City Council rejects development deal to allow self-storage at former Rockford Kmart

By Kevin Haas
Rock River Current
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ROCKFORD — City Council members have rejected a deal to allow U-Haul to open a self-storage facility inside a former Kmart in exchange for developing the exterior of the property with new restaurants and retail shops.

The deal would have required developers to activate at least two retail or restaurant spaces before moving forward with a self-storage business inside the vacant Kmart at 5909 E. State St.

Orput Companies, which is working with U-Haul as the developer of the lots in front of the Kmart, would also have had to front the city $150,000 as collateral. That money would have gone into an escrow account that they would forfeit to the city if the proposal didn’t pan out.

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City Council members decided those measures weren’t enough for it to support providing special permission for a self-storage business to operate inside the former retailer. They voted 10-2 to reject the deal. They then voted 10-2 to deny a special-use permit for the project.

“No matter how much you dress this project up, self-storage and truck rental, it does represent a continuation of a disappointing trend of second-rate use for what should be prime commercial property,” Alderman Mark Bonne said. “It’s waiving the white flag that we are giving up on State Street west of Mulford, and that’s not a message I want to send to the businesses that have been there invested in the area for three generations.”

The proposed deal was put forward as a means to allow U-Haul, which has owned the property since fall 2018, to go forward with the self-storage business it wants while providing the city with retail and commercial development it wants to see at the space at the corner of East State Street and Mulford Road.

Opponents said U-Haul’s proposal was a poor use of prime retail space. Supporters said the changing commercial landscape make it unlikely for another big-box retailer to fill the Kmart space, and the compromise provides a means to bring new commercial activity to the intersection.

The project “offers a unique opportunity to transform a blighted property into a vibrant multiuse commercial hub, bringing significant economic and community benefits at no cost to the city of Rockford,” Greg Orput, president and CEO of Orput Companies, told the council during public comment before Monday’s vote. “This redevelopment is a win-win for the city of Rockford. It will benefit the surrounding neighborhood, increase both sales tax and property tax revenues, meet the market need for climate-controlled self-storage and eliminate stormwater runoff from the site that has affected adjacent neighbors for many years.”

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U-Haul wants to bring 60,000 square feet of climate controlled self storage to the former Kmart site. An additional 35,000 square feet of the retail space would be converted to climate controlled pod-style storage, called U-Box, where customers fill a portable storage unit for safekeeping in the space.

Orput, meanwhile, would redevelop the vacant KFC restaurant and build three other businesses along East State and Mulford. Orput said that those businesses would generate an estimated $12.25 million in sales annually and create approximately 125 jobs.

The company would also make pedestrian safety improvements by adding 2,000 feet of sidewalks along the two roadways, and it would build green space in the center of the existing parking lot that would improve stormwater detention. That green space also calls for a common outdoor eating area and public art park, which was pitched by Alderman Mark Bonne as part of a proposed compromise.

City Council members have been debating the plans since mid-May, when it was approved by the Zoning Board of Appeals and put forward to aldermen for consideration.

Orput companies said that if the request for a special-use permit was rejected, it’s likely the property will remain vacant indefinitely.

“I guess since we don’t envision a U-Haul there with this tenant, we just envision an empty lot,” said Alderwoman Gabrielle Torina, who supported the redevelopment. “That’s what we’re voting on right, to not develop at all.”

How they voted

In favor: Kevin Frost, Gabrielle Torina

Against: Mark Bonne, Jeff Bailey, Jonathan Logemann, Chad Tuneberg, Aprel Prunty, Janessa Wilkins, Karen Hoffman, Frank Beach, Isidro Barrios, Gina Meeks

Absent: Bill Rose, Tim Durkee

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas