New owners put loft project back on track

By Alex Gary

BusinessRockford.com

A trio of local businessmen has bought River East Lofts, a downtown redevelopment project on hold since 2005, and plans to have models ready to sell this year.

Javier de la Uz of Rockton and Joe Leombruni and Tad Rodenbeck of Rockford bought the 9,100-square-foot building at 202 N. Madison St. last week from Commercial Mortgage & Finance Co. for $340,000.

The three plan to sink another $500,000 or so into the building, originally built at the turn of the last century as a produce warehouse. Janesville, Wis., developer Bill Mathis bought the building in 2004 and started work on it the next year. But in July 2005, subcontractors walked off the job because Mathis reportedly was behind $450,000 on payments.

Mathis tried to do some of the work himself but then was forced to abandon the project. Commercial Mortgage & Finance foreclosed on the building.

“The location is probably its best asset,” de la Uz said. “It’s a block from the river, a block from State Street, where there’s a lot of activity, a couple of steps away from the bike path and the Jefferson Street bridge, where you can walk across the river to go to Octane or (New American Theater).”

Mathis originally planned 11 units, but de la Uz said only six condominiums will be built, selling for about $200,000 each. The major cost will be adding two more garage spaces in the lower level and building a ramp to reach the garages. Mathis had only planned for four.

Because so much work had been completed — about 70 percent — the developers jumped at the deal, said de la Uz, 36. The Byron High School graduate, who started a landscaping business 15 years ago that has since expanded into painting, remodeling and residential redevelopment, wanted to invest in a large building in downtown Rockford. He recruited Leombruni, who owns Leombruni Masonry in Rockford, and Rodenbeck, who works for Sjostrom & Sons Construction, as partners.

De la Uz met Leombruni in high school and Rodenbeck through construction circles.

If successful, it will add to the slowly growing effort to make downtown Rockford more of a residential corridor. Since the beginning of 2000, developers have converted at least 16 buildings into nearly 75 units in the downtown area. Of course, all types of real estate have been affected by tighter lending standards as banks recover from the subprime lending boom that boosted home sales from 2003 through 2006. In 2007, the subprime bubble burst, and home and condominium sales locally fell nearly 19 percent. This year, sales are down an additional 33 percent.

De la Uz, however, said the market he’s targeting — empty nesters or young professionals — are the kinds that shouldn’t have problem receiving financing, and he thinks interest in downtown living is high.

“I wouldn’t have taken this on otherwise,” he said. “I still feel there are pockets of opportunity even within this real estate market.”

Reach Assistant Business Editor Alex Gary at agary@rrstar.com or at 815-987-1339.