The Amerock Hotel deal is good for the Rockford economy
Disclaimer: No one is paying me to say this; I have no personal gain in saying this; this is just a good deal for Rockford. Plain and simple.
There are a lot of moving parts in the Amerock Hotel deal that Rockfordians seem angry about (how long it’s taken, who the developer is, where the money is coming from, etc.), and when Rockfordians get angry, we try to dismantle pretty good deals.
This happened with the IceHogs affiliation with the Blackhawks; we screamed and hollered and even issued death threats trying to stop it from happening, and now it’s one of the highest points of pride in our community—bringing thousands of visitors to the BMO Harris Bank Center each season. It happened with the 1% infrastructure sales tax that Rockfordians shut down the first time it was on the ballot but now, after seeing the results (the stunning Morgan Street bridge, 120 miles of roadway resurfaced, a full 1/3 paid for by those outside of the city limits), it has successfully been voted for 3 times by wide margins—which means we will soon be out of our decades-old road bond debt because of it. I don’t think I need to go through the lengthy Rockford “could have had” list (which dates back over a 100+ years when we said no to being home to NIU) to prove my point that we have historically succeeded in dismantling good projects. The point is, we must let cooler heads prevail and actually weigh the pros and cons of the deals set forth for our community—not just take them at face value.
I’d like to argue against a few points that I think have already pervaded the community mentality. For starters, this project does not create an undue burden on hotels out east. Hilton owns the Embassy Suites moniker so it is the company that approved the Amerock Hotel’s new Embassy Suites brand. Hilton also has a large hotel out by I-90 and would not have approved of this project if they thought it would be an economic hindrance to its existing hotel. Which they know it wouldn’t be. This downtown hotel seeks an entirely different crowd (Sports Factory, BMO, Coronado, and downtown visitors) than those out east (I-90 pit stop, Sportscore 2, and Magic Waters visitors) and adds minimal competition because of this. The same goes for the conference centers; different crowds want different things. Some want the Americana feel and quick highway access that the east side has, others want a more urban environment. No conference center is going to close down out east because this one is built. That’s business scare tactics trying to hog the market and further disenfranchise downtown and the west side.
And it’s not like Gorman doesn’t want to own the conference center—they’d make bank on it after a while. They don’t have the cash upfront for that part because, like most of their projects, they went after EB-5 investment out in China (which makes wealthy foreign investors eligible for American green cards if they invest in American projects that create a minimum of 10 jobs), but the United States’ current climate towards immigrants, along with the ever-sunsetting state historic tax credits, the state of Illinois’ shoddy investment legacy, and EB-5’s own woes, do not entice too many foreign investors to actually invest. Enough, however, have invested and other funding has been allocated to make the hotel a reality—just not the conference center (though the conference center is needed to make the plan economically feasible).
That’s where the City of Rockford comes in.
Out of a total project cost of $68,940,000 that already has funding for $55,840,000 of it, the new deal asks the City of Rockford to build and own the new conference center attached to the hotel at a cost of $13.1 million. This is the main part that some people are frustrated over. $55,840,000 is already on its way to Rockford, but in order to secure that money we need to spend a little of our own.
Luckily, we know where that money is coming from and have known for quite some time. Originally slated for a parking garage and a train station (both structures that do not in themselves create revenue), the City of Rockford was going to use bonds to cover the cost of that construction. That should have upset folks, considering there’s no way to pay that money back except through tax funds, but it didn’t upset anyone. Now, the same tactic is being used, buying bonds, to pay for a conference center that not only immediately brings in another $55,840,000 through the renovation of the hotel, but also creates a new revenue stream for the City, and thus, a new revenue stream that isn’t your taxes.
Also, the development agreement makes the developer foot the maintenance bill, meaning once we pay for the upfront cost we do not have to pay any more; instead, we will pay off our debt on the payment and then begin to profit from it.
The project also creates 100+ permanent jobs and over 500 construction jobs. It being so close to the downtown bus transfer also gives low-income citizens who take the bus an easier opportunity to fill some of those jobs like in cleaning and food-prep—boosting those most in need in our community. And the payment for the conference center bonds will be paid for through: a tax that already exists (meaning your taxes will not go up because of this project), new market tax credits (which attract investors to low income communities), revenue from conference fees, and potential naming rights like when we renamed the MetroCentre the BMO Harris Bank Center a few years back.
And we really have been ignoring the economic opportunity this hotel brings to our community outside of the project itself.
With the 160 rooms and a capacity of around 650, this hotel would be one of the largest private developments ever to happen in downtown Rockford, and the first major hotel constructed there since the Faust in 1929. We would finally house the thousands of downtown visitors that flood in for tournaments at the Sports Factory, for concerts at the BMO Harris Bank Center, and for shows at the Coronado; and those thousands of visitors need a place to shop and eat—boosting local businesses and adding to our tax revenue.
There’s also an argument going around that it is not right to allocate public money that would create private competition with already existing businesses. And we should only invest in projects that the private sector entirely supports. Well, then we should demolish every historic structure that ever received a historic tax credit because it unjustly created competition to its less historic counterparts. Say goodbye to the Rockford Brewing Company; with its use of government subsidies, it created competition with other brewers and restaurants across the region. Also say goodbye to every building currently in or once in a TIF district. And while we’re at it we can forget everyone who lives on the west side because if we invest in those neighborhoods then that’s money that isn’t going to more competitive subdivisions out east, so we should continue investing in urban sprawl that would have such unsustainable infrastructure and would raise taxes so high that we would have no choice but to abandon the city completely. I’m exaggerating of course, but I hope the point is clear: any project that is built in a disenfranchised neighborhood and/or in a historic structure will have major expenses that would be difficult to cover without some source of public funding. That does not make these projects less worthy, nor does it justify not allocating public funds for eventual private and community success. It makes these projects even more important because it adds assets and opportunities to ‘less competitive’ neighborhoods that are still very much a part of this city and cannot be ignored forever.
I get that Gorman’s name has a negative connotation in our community; I get that many are ready for a new mayor come spring; but cast your emotions aside and look at this deal: this is a good deal for Rockford. And when you see a good, yet controversial, deal in an election year such as this, we must be active and engaged—and, if we support it, we must support it publicly. Or else we can just toss this in Rockford's large 'coulda, woulda, shoulda' pile.
If we say no to this project, we say no to $55,840,000; we say no to 100+ permanent jobs and over 500 construction jobs; we say no to rehabbing the tallest vacant building in the region; we say no to an updated Davis Park; we say no to massive tournaments at the Sports Factory; and we say no to many more business opportunities. Let’s say yes.
To read the facts of the deal for yourself, here is the development agreement.