Decisions regarding bonding by the city of Rockford for purchasing the Rockford Mall included two primary possibilities presented by the city’s financial planner, Shannon Sweeny, of David Drown Associates, at the Rockford City Council’s March 25 meeting. Public hearings regarding bonding have been conducted by the city, and a closing is currently planned for April 25.
The purchase of the mall is something the council took under advisement last July and approved going forward with at a special meeting on Jan. 6. The purchase price of the mall is $1.575 million. Costs associated with the closing will bring this figure in at $1.623 million.
The mall’s approximate 50,000 square feet of space will be used to house city offices and a meeting chamber, a 400-seat event center, and retail space to support existing and future vendors, including the possibility of a larger anchor store.
Additional costs moving forward include design, plan and build-out costs for city offices and the event center.
The council had originally discussed using two different types of bonds to fund the purchase and project costs — part of the property would be for municipal use, and part for private commercial — but opted to go with a tax abatement bond only at this stage. The tax abatement bond opens up more variables regarding how the money can be spent instead of identifying how much is needed solely for improvement to municipal needs versus commercial.
Mayor Renee Hafften said one of the reasons it had chosen to bond this way was that, in the event a large retailer or restaurant wanted space in the mall, it could be more easily considered and worked out with no stringent restrictions to meet or tied to the bond.
The council was presented two options by Sweeny regarding the amount of the bond: $1.625 million and $1.95 million.
A preliminary estimate for purchase and improvements to the property came in a $2.35 million.
Councilor Jeannette Graner expressed some uncertainty about voting without City Administrator Dan Madsen present, since he was familiar with all the associated costs.
Hafften, relying on memory, ran through the hard and proposed costs associated with the full scope of the purchase and project, and got confirmation from Sweeny that she was representing it correctly. He also told the council he was working on the timeline it provided, but that could be changed with some repercussions.
The city has $200,000 in a capital improvement fund that was established for city hall and event center improvement. Combined and separately, the projects have been discussed and considered for several years by a few Rockford City Councils. With the purchase of the mall, the city will receive two out lots that it could sell.
With improvements a known variable – the exterior of the mall and remodeling for the city’s space among them — the higher bond amount came out favorably through discussion and was approved 4-0 by the council. This would prevent the council from having to come back for second bond, which could delay work, require an additional hearing and cost an additional $12,000.
The bond will result in an annual average tax levy increase of $202,000 and includes approximately $48,000 in operating expenses using existing rental revenues and rates.
The council also revised the resolution, asking for a five-year call date on the loan instead of seven, before approving it.
The city is moving ahead on schedule with water and sanitary improvements in the Maplewood Manor development. This project is part of a bigger project that will, in ensuing years, be implemented in most areas of the city — oldest and most need, to least.
The sanitary sewer mainline and laterals are clay and were installed in the 1960. Leaks and breaks have been experienced in the area with increasing frequency.
In conjunction with the lining and repairing of the mainline and laterals, the council approved televising individual lines on properties that connect to the system to determine if they required improvements. If the private lines are determined to need work, the homeowner will be responsible for paying for the work, provided by a contractor hired by the city, or take responsibility for getting the repairs completed on their own and by a deadline. Non-compliance, or missed deadlines, may result in fines to the property owner.
Jared Ward, of Wenck, the city’s engineer, reported to the council that about 30 residents attended an open house earlier in the month that was intended to explain why work was being done in their area and what the financial implications were. He said it was a long meeting but resulted in a lot of good questions, some he wanted to take up with the council prior to the second open house at end of March. Residents who did not attend the first open house received the specifics of their televised line, whether or not it needed improvement and, if so, what the estimated cost would be.
Ward stated that of the 108 private sanitary sewer lines inspected, 57 of them required improvements.
Two residents of the Maplewood Manor project area attended and spoke to the issue, one with questions over what was being done and how, and one expressing concern over affordability.
The next regular meeting of Rockford City Council is at 7 p.m. Tuesday, April 8, at Rockford City Hall, 6031 Main St.