By Kevin Haas
Rock River Current
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ROCKFORD — A historic hotel that initially served as a resting place for actors when it opened nearly a century ago is set to be renovated into an affordable apartment complex.
Wisconsin-based developer Gorman & Co. is set to undertake an $11.3 million project to renovate The Lafayette Hotel, 411 Mulberry St., into 54 residential units. It’s working in partnership with Zion Development, which will provide social services for the future residents.
“The location of the Lafayette is huge. It literally is a half a block from the bus station, most of the services our residents need are right there or at least within a couple blocks,” said Ron Clewer, Illinois market president for Gorman & Co. “That’s one of the things that often gets overlooked when you’re doing developments for individuals with low incomes who need affordable housing – is that adjacency to services.”
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The company purchased the property at corner of Mulberry and Church streets last year, and it’s due to close on the financial package to fund renovations this week.
Gorman’s restoration efforts are aided by a $650,000 no-interest loan approved Monday by City Council members. The loan would be repaid over 30 years.
The building was most recently used as lodging for homeless people or others in need, with the operators working with social service agencies to house people for a night, a week or a month. After the renovations, it will serve as affordable housing for people with low incomes and permanent housing for people who may need mental health services or other support.
“What we have here is actually the solution to homelessness. It just isn’t replicated enough to be a complete solution,” said Bob Campbell, executive director of Zion Development. “But it addresses the homelessness issue because it provides people with that permanent place to live.”
LeRoy and Lisa Jones ran the Lafayette until LeRoy died in 2019 at age 73. Lisa Jones then decided to sell and was looking for a buyer whose proposal would continue to help people in need, Clewer said.
“She wanted to make sure the people who historically have been served there continue to be served there,” Clewer said.
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The model is similar to what Zion Development does at The Grand Apartments on Broadway and Eighth Street in Midtown, which has 46 residences. Campbell said it adds a much needed affordable housing option to the city.
“At the Grand, for example, we’re constantly fighting a long wait list,” Campbell said. “When you’re talking about people who are on the street, a wait list doesn’t do much good. It’s going to take you six months or seven months to be able to get in. This helps alleviate some of that pressure.”
There are 66 units on the upper three floors that will be converted to 51 living spaces, and then three live-to-work artist spaces will be added on the ground floor.
The building has been vacant since August after Gorman paid to relocate about 25 residents in preparation for the rehab work and to provide safer housing because of the needed repairs.
The Lafayette Hotel was built as a premier luxury hotel opening in June 1927, according to the city. It was designed to have 40 hotel rooms per each of its three floors for a total of 120, but it’s been decades since it operated as a hotel. It’s gone through several remodeling efforts since its founding as a hotel, and last had 39 transient lodging units and 27 studio and one-bedroom apartments.
The former Mandalay Bay Lounge – which was also Swilligan’s, Cubby’s West, Harper’s Weekly and the Ram Room in years past – will be converted into a resident community room for gatherings and meetings.
The basement will become a storage and fitness center and there will be a common laundry room on each floor, according to plans submitted to the city.
The project is funded in part by low-income housing tax credits. That credit requires that all units are rented to residents who earn 60% or less than the area median income, which is $34,620 for a single household.
It’s also funded with state and federal historic tax credits, Illinois Housing Development Authority funds, a grant from the Federal Home Loan Bank of Chicago, and a ComEd grant to support energy efficient features.
Construction is expected to begin in the next couple weeks with the property welcoming tenants in August 2025.
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