Arbitrator could settle dispute between contractor, developer of Colman Yards in south Rockford

By Kevin Haas
Rock River Current
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ROCKFORD — The former lead contractor behind the Colman Yards redevelopment wants an arbitrator to settle a dispute over millions of dollars worth of work that remains unpaid roughly eight months after construction was halted.

ENC Construction and Development argues that developer J. Jeffers & Co. is responsible for a series of delays that ultimately resulted in a work stoppage and ENC’s firing as the project’s general contractor.

ENC says in a court filing that it is owed a little more than $11 million, including millions of dollars in liens it has placed on the property at Rock and Loomis streets in south Rockford. It filed an arbitration and mediation demand on July 8 with the American Arbitration Association. That demand became public on Aug. 14, when it filed a complaint in the 17th Judicial Circuit Court seeking to foreclose on its mechanics liens.

ENC said the lawsuit was required for it to protect its rights to foreclose on mechanics liens, but any litigation has been stayed to allow for the mediation process to play out outside of court.

It’s not clear how long that process might take or how it will affect the developer’s efforts to restart construction with a new contractor. Both parties are scheduled to appear in court Nov. 14 to provide an update on the mediation process and potentially enforce any arbitration award.

J. Jeffers & Co. said it is working to resolve the dispute through mediation, which is in the early stages right now.

“Most importantly, J. Jeffers & Co. remains committed to the Colman Yards project and trusts that the mediation process the parties agreed to will bring fair resolution,” the company said through a spokesperson. “In an ongoing process, lien claims are being validated, and undisputed liens will be paid. We fully expect the release of liens in the coming weeks as they align with payments.”

ENC says it has not been paid for work on the project since November. It has been paid a total of nearly $6.4 million so far.

It lays out its argument that it was wrongfully terminated in a 90-page court complaint. That complaint argues that delays were the fault of J. Jeffers, which it says failed to obtain permits in a timely manner, failed to complete necessary abatement and demolition work on time, and imposed changes on the amount of union participation required. It also argued that there was missing documentation required under OSHA regulations, unremoved relics and other unsafe site conditions.

ENC says it urged the developer to enter a project labor agreement with local unions, something that was a highly debated sticking point for City Council members. That debate played out in summer 2023 before a tie vote was broken by Mayor Tom McNamara, determining no labor deal would be required. J. Jeffers instead sought about 70% union participation before later switching to 100%.

“Our client is extremely disappointed on how all of this unfolded with all the owner and developer’s excessive delays and refusal to proceed with union labor,” said George Hampilos of Hampilos & Associates, which is representing ENC. J. Jeffers “was unrelenting on any extensions or any increased amounts due to what we consider to be the fault of the owner and the developer.”

ENC said the dispute with local union groups severely interfered with its ability to hire subcontractors.

“In practice, many union subcontractors — reflecting a unified position within the local labor environment — completely declined to participate in the project absent a full (project labor agreement),” the company’s attorneys wrote in the complaint. “As a result, despite ENC’s best efforts and continued outreach, it became virtually impossible to assemble the necessary union workforce at any level short of full unionization.”

It said issues with labor escalated further in fall 2023 as work got underway. There were ongoing demonstrations and a subcontractor’s trailer was set on fire. Pictures in the court documents show a sledge hammer hanging from a noose in the burned trailer.

ENC’s superintendent was interviewed by the FBI in fall 2024 in connection with the safety concerns, according to the court documents. It said it hasn’t received any updates or additional information from federal authorities about the complaints.

ENC also said it learned through a Rock River Current news article in November 2024 that work going forward was to be 100% union. That shift in required labor participation and an after-contract demand that all subcontractors provide performance bonds compounded disruption to the project, it argued.

“While managing a mix of union and non-union labor is a common aspect of general contracting — one that ENC has successfully navigated on many other projects — the circumstances that developed on this project were anything but ordinary,” the company wrote in its complaint. “The magnitude and timing of the changes imposed after the contracts were signed — combined with the extraordinary pressures and disruptions in the surrounding labor environment — created a set of conditions far beyond what any contractor could reasonably anticipate or control. These were not typical project challenges, but highly unusual, escalating events that fundamentally altered the nature of performance.”

The combination of issues, ENC estimates, put the project behind schedule and over budget by roughly $12 million.

The $106 million Phase 1A of the Colman Yards development 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.

Phase 1B, which the developer has been making preparations to move forward with while the project is stalled, would complete the rehabilitation of the remaining historic structures, including ground-floor space dedicated to small businesses and other commercial uses.

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