By Kevin Haas
Rock River Current
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ROCKFORD — A historic factory where timepieces were once made and the city’s first Walgreens drug store are part of a local developer’s vision to create new downtown living that pays homage to each building’s roots.
Oliver Emerson Development, a father-and-son real estate development team, plans to convert the nearly 150-year-old former Watch Factory, 325 S. Madison St. in downtown, into market-rate apartments that blend into the original character of the building.
On the opposite side of the river, a 95-year-old building that initially housed Walgreens and later Trekk, 134 N. Main St., would be turned into loft apartments on the second floor with a commercial tenant on the ground space.
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Both buildings are owned by the city of Rockford and would be sold to Oliver Emerson to set the stage for redevelopment. The city may also offer financial support to complete the roughly $13.1 million revamp of the two properties. That would come from a tax-increment finance district and a $1.2 million forgivable loan.
“Both of these are extremely beautiful historic buildings that are in prime locations within our downtown,” said Karl Franzen, the city’s community and economic development director. “The redevelopment opportunity that exists is incredible for maintaining the history but also for really aligning all the other redevelopment strategies that we’re doing.”
The former Rockford Watch Co. factory, which is adjacent to the UW Health Sports Factory and across from Ingersoll Centennial Park in the historic Haight Village neighborhood, would be sold for $55,000. The former Walgreens, often called the Trekk building after the marketing agency that previously resided there, would be sold for $70,000.
“It has some great amenities here: the park across the street, listening to the river from the dam,” Oliver Emerson Sr. said of the Watch Factory site. “Rockford is roaring. It’s coming back and it’s coming back strong, and we just want to be a part of that.”
The city is required to sell the properties for at least 80% of their appraised value, and the proposed sale prices are for 100% of the value appraised. The City Council‘s Finance and Personnel Committee will consider the sale agreement on Monday.
Plans, cost
Oliver Emerson plans to spend $7.3 million on the first phase of renovations to The Watch Factory to create 23 market-rate apartments. A second phase could add 30 more apartments and eight row houses south of the building.
“It’s a beautiful building; no one wants to see it torn down,” Oliver Emerson Jr. said. “It’s going to have all the aesthetics of the original building itself. It has a great view over the Rock River.”
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Emerson hopes to incorporate lessons about the building’s history into the future apartments. For example, there could be a display area with watches from the Rockford Watch Co.
“I believe that the city has a lot of unique character,” Emerson Jr. said. “There’s a lot of history here in the city of Rockford as well. … There’s also some uncovered history inside those buildings, inside those walls that’s just never talked about.”
The cream-colored brick building, characterized by its large arching windows and Italianate style, was built starting in 1874. It produced precision watches for decades until the factory closed in 1915. The building was later owned by Rockford Public Schools and acquired by the city for $580,000 in 2014, according to Rockford Register Star archives. In 2014, an addition to the building was demolished to make room for parking for the Sports Factory.
“The brick detailing, the corbels that are part of the underside of the eaves are all things that give that building tremendous character,” said architect Gary Anderson, who is working with Oliver Emerson on the project.
Construction would be led by Kee Solutions, and it would incorporate job training with YouthBuild, a nonprofit that helps young people, many of whom did not complete high school, further their education and learn careers in the trades.
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The Walgreens redevelopment is a $5.8 million project to create 10-market rate apartments and bring a commercial tenant to the ground floor at North Main and Mulberry streets.
“It’s a beautiful building. The tile on the floor was actually hand installed piece, by piece, by piece,” Emerson Jr. said. “It has a lot of character to it as well, and we want to keep those aesthetics inside the building.”
Anderson said the development will both help the city address a shortage in housing options that has driven up home and rental prices and create more urban-style living that’s in demand.
“We’re providing a lifestyle here in downtown with the restaurants and retail and bars,” he said. “That urban space is what people are looking for. To be out in suburbia in some complex that you have to drive to everything is not really desirable.
“What we’re trying to do is attract talent to our community, and that talent is looking for this type of housing.”
City financial support
The project would be financed by a mixture of historic tax credits, private equity and city support. The projects also qualify for several tax exemptions because they are in a River Edge Redevelopment Zone.
“Even with the historic tax credits it has not been an easy job to do, to make the numbers work,” Anderson said. That’s partially because of the excessive amount of windows, many of which are boarded up and need to be replaced.
The windows are a great source of natural light for future tenants, but they are also “the Achilles heel to making those numbers work,” Anderson said.
Both proposed redevelopments are also in tax-increment finance districts, which can provide incentive to developers through rebates for work that improves the overall value of the property.
TIF districts, as they’re commonly called, work by capturing the additional property taxes that come from increased property values into a special fund that can be used for redevelopment purposes.
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To support this project, the city plans to do what it calls a de-TIF, re-TIF, which essentially creates new TIFs from scratch to restart the 23-year life of the district. Oliver Emerson would be awarded 100% of the increment generated on a pay-as-you-go basis over the life of the TIF.
The city has also proposed a $1.2 million subsidy through a forgivable loan to support the project.
“The city is not in the business of owning properties and developing properties. We want them in private hands,” Franzen said. “We’ve owned both of these properties for the better part of a decade or more, and we’ve tried multiple times … to get them redeveloped.
“We’re highly motivated to move them not only for the community benefit of redevelopment, but also remove them off of the city’s plate and exposure for maintenance and cost associated with that.”
The purchase agreement City Council members will consider on Monday doesn’t ask aldermen to commit to any funding. That would be brought forward at a later date. Approving the purchase will allow Oliver Emerson to finalize its capital stack and talk to potential commercial tenants for the Trekk building.
If the deals are approved the projects could move forward next fall.
“We are in a tough market right now, interest rates being high and construction costs being high,” Emerson Jr. said. “Our city is forward-thinking in saying hey, we’re going to make sure that we continue to progress and when we come out of these challenging times we’ll have a great project that we can unveil and our city will remain strong.”
Redevelopment at a glance
Where: The Watch Factory, 325 S. Madison St. and the Trekk building, 134 N. Main St., both in downtown Rockford
Estimated cost: $7.3 million for The Watch Factory; $5.8 million for Trekk building
Proposed sale price: $55,000 for The Watch Factory; $70,000 for the Trekk building
Proposed taxpayer support: $1.2 million through a forgivable loan; pay-as-you-go reimbursement through a tax-increment finance district
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