Rockford City Council votes against reconsideration, sticks with rejection of Kmart redevelopment deal

By Kevin Haas
Rock River Current
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ROCKFORD — City Council members have stuck with their decision against allowing the former Kmart property on East State Street to be redeveloped with a mix of businesses anchored by a self-storage facility inside the former retail box store.

The council had a chance Monday to reconsider its previous no vote because of rules that allow for a member of the prevailing side of a vote to call a do-over. Alderwoman Gina Meeks asked for the new vote at the last meeting on July 8, and on Monday the council voted 7-5 to reject reconsideration and uphold its decision against the proposal.

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Opponents said any development that used the former box store for self-storage was a bad use of commercial space in a prime retail corridor.

“To me it’s another chapter in our diary of low expectations,” Alderman Mark Bonne said of potentially allowing self-storage.  “If we send this message that this is not what we want, then maybe we can get something a little more — not necessarily retail but retail adjacent — a little more creative.”

Aldermen debated the issue for about a half hour before deciding against reconsideration.

Aldermen previously voted 10-2 on June 17 to reject the redevelopment deal, which would have required developers to create at least two retail or restaurant spaces before opening a self-storage business inside the vacant Kmart at 5909 E. State St.

The deal was proposed as a compromise to allow U-Haul, which bought the property in September 2018, to go forward with the self-storage business it wants while providing the city with the type of commercial development it wants in the area.

Supporters of the deal say redeveloping the 14-acre site would increase sales tax and property tax revenue, create new jobs, add new retail outlets and make significant infrastructure improvements including sidewalks and a green space to alleviate stormwater issues that have affected nearby businesses.

Meeks said renderings the developer presented of what the property could look like if the plan is approved are worth considering. She also noted that the retail landscape has shifted and it will be difficult to find use for the large retail space.

“Our choices are limited, and there are options that we have on the table right now that I think would be very beneficial to our city, very beneficial to that street,” Meeks said. “Bringing the outlots and bringing the restaurants and bringing the offices and having the opportunity to do that is what saying yes to this development would do. Saying no to it, in my opinion, is going to keep it exactly what it looks like right now.”

The zoning for that site at the corner of State Street and Mulford Road doesn’t allow for self-storage, so the developer needs special City Council approval before it can operate that type of business.

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U-Haul is working with Orput Companies, which also operates Edgebrook Shopping Center, to develop the property. As part of the proposed deal, Orput would have to front the city $150,000 as collateral. That money would be forfeited to the city if the retail and restaurant space is not developed.

U-Haul, meanwhile, wants to open 60,000 square feet of climate controlled self storage at 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 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 State and Mulford. Green space would also be added in the center of the existing parking lot to improve stormwater detention that has affected nearby businesses. That green space also calls for a common outdoor eating area and public art park.

Alderman Kevin Frost said the proposal is similar to what happened at Forest Hills Road and Riverside Boulevard in Loves Park, where a former Kmart became Boxed Up self storage as a variety of other businesses including Aldi were built out front.

“It’s turned into a rather nice development, and it looks better than the alternative, which is sitting vacant,” Frost said.

Frost said the council needs to be realistic about what will be developed there. He said he was initially against the project until he saw how landscaping would obscure trucks parked at the southeast corner of the property.

“It’s going to be difficult to find a tenant or an owner to come in and reutilize this property, except in the way that it’s proposed now,” Frost said. “It’s not throwing in the white flag, it is the best and highest use for this property. …

“I’m at a loss for someone who thinks that you’re going to get this quote/unquote top-tier tenant. You have a top-tier tenant right before you tonight.”

Aldermen Frank Beach and Chad Tuneberg said the city should wait for something better at the property.

“I’m not willing, frankly, at this time to give up on the fact that there might not be some other development to come,” Beach said. “I’m not ready to give up on it. It’s a beautiful area. It’s a beautiful part of the city of Rockford and it’s growing.”

Tuneberg said he appreciated the proposal for commercial development at the front of the property, but he would not be in favor of it if it came with self storage at the box store.

“We as a city would be more encouraged for striving for something better,” Tuneberg said.

Developers have said the property will likely sit vacant indefinitely if the proposal is defeated. Bonne suggested Monday the city explore whether the property can be declared abandoned, allowing the city to take legal action. In response, Frost, an attorney, said that an empty property that is properly maintained would not be subject to such legal action.

“If whoever the owner is decides they want to leave it alone for awhile, they can,” Frost said.

How they voted

In favor of reconsideration: Gina Meeks, Kevin Frost, Bill Rose, Jeff Bailey, Gabrielle Torina,

Against reconsideration: Mark Bonne, Jonathan Logemann, Frank Beach, Chad Tuneberg, Aprel Prunty, Karen Hoffman, Isidro Barrios

Absent: Tim Durkee, Janessa Wilkins

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