Colman Yards developer may restart stalled Rockford project with two phases at once

By Kevin Haas
Rock River Current
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ROCKFORD — The developer behind the massive overhaul of the former Barber-Colman manufacturing complex may try to accelerate the next step of the project as it looks to make up for lost time during a monthslong delay.

Work has been halted for roughly eight months on the $106 million Phase 1A of the Colman Yards development, which sets out to create loft apartments in three vacant factory buildings, including the largest structure at the corner of Rock and Loomis streets. That phase also includes a 336-space parking deck.

Related: Developer moves forward with effort to restart stalled Colman Yards project

When work resumes, it may happen simultaneously with what was initially designed to be Phase 1B. That secondary step would complete the rehabilitation of the remaining historic structures, including ground-floor space dedicated to small businesses and other commercial uses.

Milwaukee-based developer J. Jeffers & Co., which purchased the property from the city for $500,000 in September 2023, said architects have completed designs for Phase 1B and it’s ready to move forward on both phases.

Both phases are now behind schedule, with Phase 1B initially expected to go forward this year once Phase 1A was complete. That was before work on the initial phase halted in December.

“1B needs to get moving. It might seem crazy that we’re talking about the next phase, but we are actively moving that forward as well,” said Brian Loftin, chief development officer for J. Jeffers & Co. “Even though 1A has been delayed a bit our plan is not to continue to push back the second phase of it, but move it up forward so we can and have it all run together.”

‘We’re not giving it back’

Executives with the company, including its founder Josh Jeffers, were in Rockford again on Thursday to meet with city leaders, its new general contractor Ringland-Johnson, the Rockford Area Arts Council and other potential partners.

Jeffers has visited the city in recent weeks to personally meet with civic groups and other stakeholders as the company tries to restart the project.

Before work was halted, the company had several letters of intent secured for commercial tenants that would occupy space upon the completion of Phase 1B.

“We’re going to be touching base with all of those folks over the next month or two,” said Lisa Wogan, director of community impact for J. Jeffers & Co. “We’ve had some great initial response, letting them know it’s still on track and we’d like to meet and talk about where you’re at with your planning.”

J. Jeffers & Co. hasn’t yet revealed the businesses that signed letters of intent.

The delay stoked fears for some stakeholders in south Rockford that the Colman Yards project would be another missed opportunity to revamp a sprawling structure that has deteriorated over more than two decades of vacancy.

Previous unrealized plans for the property include late businessman Ken Hendrick’s pitch for a casino, a proposal for a youth sports complex, and Rock Valley College’s initial plan for an advanced technology center, which instead was located in a former Shopko in Belvidere.

“We’ve heard some commentary about past attempts at this Barber-Colman complex,” Josh Jeffers said. “The difference is we actually bought it, and we’re not giving it back. …

“We’re committed. We’ve got a lot of money into it. We want to see the vision through to its realization.”

Next steps to restarting

It’s still unclear when work on either phase could begin.

The developer first needs to clear mechanics liens filed against the property.

The developer’s previous general contractor, ENC Construction & Development of Chicago, has filed about $6 million in mechanics liens against the property, according to records filed at the Winnebago County Clerk & Recorder’s Office. The majority of those payments are owed to subcontractors, multiple of which separately filed $5.8 million in liens against the property.

J. Jeffers & Co. said it is working in conjunction with ENC and its bond surety company to ensure subcontractors are paid and their liens are released.

“We already released some of those payments two weeks ago, and we’re going to continue to do that as we get the provided documentation from them,” Loftin said. “We’ve been encouraged by ENC’s willingness through their counsel to allow that direct conversation now with their subcontractors.”

J. Jeffers still has its $106 million capital stack committed to the project and ready to be drawn down for payments, the developer said. First it’s working with ENC and subcontractors to go over each line item to ensure the scope and cost of the work is accurate.

The project is supported by millions of dollars in state and city incentives, including a $6 million advance from tax increment finance district funds, $4 million state grant, a $2 million environmental lawsuit settlement, TIF district reimbursements, historic tax credits and multiple loans.

That money has been held in an escrow account by the city and drawn down as qualifying payments arise.

There is a $10.6 million balance remaining in the city’s escrow account after more than $12 million has been drawn down for the project so far, according to financial records obtained by the Rock River Current this week through a Freedom of Information Act request.

“All of that is still there,” Jeffers said of the company’s funding. “There’s nothing that has an expiration date, or that we have to go reapply for a grant. None of that exists. We still have all these funds.”

Jeffers said that while there is no deadline for the company to restart work, the sooner it can restart the better for the overall development.

Both J. Jeffers and city leadership say the timeline for restarting is largely dependent on how the process plays out with the bond surety company. That bond was required from the general contractor as part of the project. It’s intended to protect the city and developer from financial losses in the case that work could not be completed by the general contractor.

“They’re going to move forward. They’re going to make sure all the liens are paid. They’re going to move forward with a strong contractor in Ringland-Johnson,” Mayor Tom McNamara said. “They’re as committed today in our conversation as they were when we approved the development agreement.”

McNamara said the current condition of the building is not acceptable, but he’s confident in the company’s ability to move forward.

“We’ve had so many promises at that campus that have not come to fruition,” McNamara said. “I want to make sure residents know we at the city are committed.”

Silver lining

Jeffers said a silver lining in the delay is that interest rates are more favorable now than when it closed on the financing in November 2023. The volatility of the financial markets at the time led to the decision to split the project into a Phase 1A and 1B, Jeffers said.

“We’re in a significantly better interest rate environment now and that should help us out,” Jeffers said. “I would say two years ago we were fighting some headwinds. Now I would say those winds are at our back.”

The developer’s construction loans allow for a floating interest rate, and it expects to save roughly 300 basis points, or 3%.

“When we look at ways to put things back on track, that’s definitely something that helps us,” Jeffers said.

Before the project was halted, interior demolition and environmental abatement was completed to prepare three historic buildings for their future residential use. The foundation of the parking garage was also complete and ready to go vertical.

Still, those are early stages in the overall scope of the work.

“The fact of how early it was in the overall dollar spent in the process has actually benefited us,” Loftin said of changing contractors. “As challenging as it is it’s also good that we saw that and saw where we were at at this stage of the job and not 80% of the way.”

Ringland-Johnson has set the stage to start the project. It has already put out bids and provided J. Jeffers with a guaranteed maximum price for its work, Jeffers said. That’s an important piece needed for the bond surety company to move forward.

Brent Johnson, chairman and CEO of Ringland-Johnson, said his meeting with J. Jeffers went well on Thursday and he’s hopeful things will continue to move forward.

“I believe in the project,” Johnson said.

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