Construction has begun on a new state-of-the-art federal courthouse that will serve as the anchor to more than $40 million being invested in downtown Rock Island.
Russell Construction & Development launched the multi-million-dollar courthouse project with a ceremony in early November that also launched demolition of the former Bituminous Insurance (BITCO) building. The new 53,356-square-foot federal facility will be built at the 320 18th St. site.
The three-story building will be owned and developed by Rock Island Investors, Inc., a special purpose entity that includes Russell and KATCO Resources Inc., a Kansas corporation with headquarters in Rock Island owned by Mike Fishman and Jeff Eirinberg.
“This project will create construction jobs and return good paying jobs to Rock Island,” Mayor Mike Thoms said in a recent statement. “The project will contribute property taxes to our base and help support the downtown. This project will anchor an exciting collection of developments in the corridor and serve as a starting point for future downtown developments.”
The courthouse project is the latest collaborative joint venture by Russell and KATCO, that began planning in 2018 by participating in a General Services Administration (GSA) search and solicitation process.
“This is a great story for Rock Island — all the momentum that’s happening in downtown,” Kelly Young, director of government development for Russell, said in an interview with Quad Cities Regional Business Journal. “Rock Island is working hard. It’s a fantastic city staff and they want things to happen. There are so many things the city staff and council are trying to do to stimulate re-investment.”
The courthouse is the first and the largest of several redevelopment projects in the works in the core business district, said Liz Murray Tallman, vice president, development services for the Development Association of Rock Island (DARI). Some of the other projects include a new YWCA and American Bank’s renovation of the former U.S. Bank building into its new branch.
“When you start adding up all the things happening, it’s approximately $40 million in new investment,” Ms. Tallman said. “It’s pretty amazing the type of investment that’s occurring while we’re still in a pandemic world.”
Ms. Tallman said the projects are “huge from an economic development perspective.” She said the new YWCA not only represents a $14 million investment but will expand a variety of services in the downtown area with its STEM lab and workforce training services. American Bank is investing nearly $1 million into its project. The city also has earmarked about $3.9 million for downtown improvements including future renovations at the parking ramp on Third Avenue between 16th and 17th streets.
According to Ms. Young, design work on the new facility is now beginning by Russell, in conjunction with GSA. She estimates the project’s investment at between $13 million and $20 million. Demolition is expected to be complete in late December with construction slated to begin in March 2022. The courthouse is expected to be completed in mid-2023.
Russell and KATCO have extensive experience in providing lease and construction services to federal tenants across the country. The joint venture also partnered on new Social Security Administration and National Weather Service facilities in Davenport.
“Working with the U.S. District Courts, the GSA and the ownership group is truly an honor, especially to do so in our home community,” Ms. Young said.
She added that the building will become home to seven different federal agencies including the U.S. District Court, U.S. Bankruptcy Court and related agencies. Once completed, the new facility will allow the court to return to downtown Rock Island from the federal courthouse in Davenport where it was displaced to after a hazardous mold situation in its former facility.
The GSA estimates the new building will have a minimum of 42 employees, and serve 250 visitors a day, Ms. Young said.
Tarah Sipes, Rock Island economic development manager, said the city is eager to welcome back the federal workers and courthouse visitors. “Our restaurants, retail and service businesses look forward to seeing former customers return and meeting new visitors,” she said. “The city also looks forward to the potential for additional development investment to follow from this project.”
During the demolition ceremony, Chief Judge Sara Darrow of the U.S. District Court, Central District of Illinois, also spoke to the significance of the project. “This historic project is so important to our justice system and will enhance the federal court’s ability to serve the local communities that comprise the Rock Island Division of the Central District of Illinois.”
“The new building will provide an appropriate setting for the significant proceedings that occur in our court, a place to promote respect for the law in our community, and an environment that inspires civic engagement and gives meaningful access to justice for the citizens of our community,” she said at the time.
Ms. Young said the project is a “weird turn of events, and just coincidence” that Russell now finds itself redeveloping the BITCO site. In 2014, Russell was hired by BITCO to design and develop a new national headquarters for the century-old organization, which relocated to the Interstate 74 corridor in Davenport. As part of the negotiations, Russell agreed to purchase BITCO’s Rock Island headquarters if it did not sell, she said.
Three years later, the building was sold at auction to a New Jersey investment group and since has sat vacant and fell into a state of disrepair, she said. The new owners failed to pay the property taxes for four years and another investor bought the back taxes. But when that group backed out, it opened the door for Russell and KATCO to purchase it from the original investment group.
“Not only is this a catalyst for downtown, but this is real tax dollars being paid to the county, city and schools when it’s completed,” Ms. Young said. “The great story about this is that because our site won the GSA solicitation, when we bought it some of our purchase price went to paying back the taxes.”
With the property’s liens now cleared, she said not only is a vacant building getting a new life but it also is returning to the tax rolls because of a leaseback agreement. “The federal government doesn’t pay taxes, but we do,” Ms. Young said.