1,200-room hotel planned for McCormick Place
BY DAVID ROEDER Business Reporter February 19, 2013 7:26AM
A 1,200-room hotel is planned for McCormick Place.
Updated: February 19, 2013 5:46PM
The agency that owns McCormick Place said Tuesday it plans to build a hotel that will increase by 50 percent the number of guest rooms within walking distance of the city’s convention center.
The hotel — about 35 stories tall — will contain 1,200 rooms and be built on the south side of Cermak between Michigan and Indiana. It will be directly across from the McCormick Place West Building and have a skybridge connection to it, the agency said.
However, the owner of the property in question said there is no agreement on a sale.
Officials said the hotel will allow McCormick Place to attract additional events that will draw some 80,000 attendees per year. City and convention executives have long believed that more first-class hotels near McCormick Place are needed to make Chicago more competitive with other convention cities.
A spokeswoman for the Metropolitan Pier and Exposition Authority said construction will start in late 2014, with completion due about two years later.
The agency, known as McPier, said it will buy the development site and build the hotel for about $400 million. In its statement, McPier said it “will utilize revenue-based financing during the construction phase and will later seek to add the financing of this property, along with its other facilities, into its expansion project debt structure. This will then allow for the additional income generated by the second hotel property to be used to aggressively grow the conventions and meetings business in Chicago.”
Jim Reilly, chief executive officer of McPier, said the agency must solicit contract proposals from builders, architects, hotel operators and others who will be involved in the project.
The land, once earmarked for a data center, is owned by James McHugh Construction Co. “We’ve been in negotiations with them and hope it will come to a friendly conclusion,” Reilly said. But he noted that if there is a hitch, the city has the option of condemning the property, in essence forcing a sale at what a court decides is market value.
Reilly said McPier also is discussing a land trade with the McHugh interests, possibly for construction of a data center.
James McHugh, chairman of the construction firm, said that while McPier has approached him about the land, “we considered those conversations to be very preliminary and no agreement has been reached. It is our hope that the issue can be resolved in a way that improves the ongoing redevelopment of the South Loop.”
McHugh said that a company he runs, JRM Technology, has invested “millions of dollars” to develop a data center on the site McPier wants. The plan has gotten City Council approval and McHugh said he would start construction as soon as a building permit is issued.
The McPier announcement was coordinated with Mayor Rahm Emanuel and Gov. Pat Quinn, who issued statements supporting the project.
The hotel will work with the existing Hyatt Regency McCormick Place hotel, which McPier currently is expanding.
By announcing its plans, McPier is asserting its intent to control the pace of development near the convention center. Another property mentioned as a hotel site is on the north side of Cermak and east of Indiana, but it has been tied up in foreclosure and a bankruptcy filing.
“I don’t see our plans as competitive with that property at all. I hope they can develop it,” Reilly said.
He said a consultant’s study for McPier emphasized a need for “more hotels and a livelier neighborhood” near McCormick Place. Reilly said the region, which includes the Motor Row historic district, will have nearly 2,500 rooms once the Hyatt expansion is finished, but that it could accommodate another 5,000.
The area also will benefit from the CTA’s plan to build a Green Line station to serve McCormick Place.
The Emanuel administration also has raised the possibility of DePaul University building a basketball arena near McCormick Place. Reilly said DePaul “hasn’t made up its mind about its plans” and so he could have no further comment about that.
The new hotel will create 2,500 construction jobs and 500 permanent jobs, officials said.
“It further establishes Chicago as a world class city and the best destination for any convention or trade show,” Emanuel said in a press release. “I am thrilled that this hotel will take McCormick Place and Chicago’s convention and trade show experience to the next level.”