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Plan would shoehorn hotel onto Wacker Place

ABuilding. | Rich Hein~Sun-Times

Aon Building. | Rich Hein~Sun-Times

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Updated: October 15, 2013 6:24AM

How valuable can a patch of downtown land be? Consider an empty lot at 66 E. Wacker Place, just off Michigan Avenue. At 4,800 square feet, it’s only a little larger than a standard residential parcel in Chicago.

“It’s almost a New York-sized lot,” one insider said. It’s enough to hold a 27-story hotel.

That’s the development plan of the property’s owner, Rhode Island-based Magna Hospitality Group. The company hinted at its plans for the hotel in an otherwise routine piece of paperwork filed with City Hall. It is appealing a decision by zoning officials that prevents Magna from eliminating off-street loading space as part of the hotel’s design.

Magna, which owns hotels primarily on the East Coast, bought the land for $5 million in August 2012, records show. The company and its Chicago zoning lawyers did not return calls this week.

A source said Magna intends to build a necessarily slender Hilton Garden Inn on the property. It will be next to the landmark Chicago Motor Club building at 68 E. Wacker Place. There, a separate owner plans to convert the long-vacant office building with a handsome Art Deco lobby into a Hampton Inn.

The projects could make the obscure block, long known as South Water Street, into a center for budget-minded travelers. With oddly sized properties, the block has been passed over in recent development cycles. A demand for small hotels is causing investors to look at the sites anew.

The Magna property and old motor club almost back up against the better known 360 N. Michigan building, which investors plan to turn into a “lifestyle hotel.” And not far away is 203 N. Wabash, an old office building being redone as a Virgin hotel.

OUT OF BOUNDS? The plans for a “gay-friendly” Out Chicago hotel at 3343 N. Halsted have drawn a lot of press coverage since the project was announced earlier this year, some of it treating its construction as a foregone conclusion. But despite several alterations, it still is drawing fire from neighbors, leaving Ald. Tom Tunney (44th) with little inclination to endorse a zoning change that it needs.

Bennett Lawson, an aide to Tunney, said the planned eight-story building, which would extend over a three-story corner building next to it, is proving to be a “tough fit” for the location. “It’s one of the busiest blocks in the neighborhood already,” he said. People don’t like the density and some think its use of air rights over the smaller neighbor is architecturally overbearing — excuse the pun.

Lawson said the alderman has been frustrated that the developer, Ian Reisner, has refused to consider other sites and wants to build nowhere but next to the bar Sidetracks.

Reisner, managing partner of Parkview Developers, agreed that he needs Sidetracks. “For my business plan, it is essential that I have a thriving nightlife business that feeds the hotel and vice versa,” he said.

He said the hotel would fill a documented need in Lake View for quality lodging for visiting relatives, tourists and people in town for Cub games. Reisner said he’s open to further compromises, but couldn’t suggest what it would take to win people over. “If there was something that was reasonably proposed to me that would assuage people, I’m all ears,” he said.

WHEELING DEALING: Urban R2 Development Co. LLC has struck a deal in Wheeling allowing it to begin a $100 million development of what’s foreseen as a town center. The mix of retail, a movie theater and 300 “luxury” apartments is planned for 19 acres at Dundee and Northgate, an old Wickes Furniture site near the village’s Metra station.

Besides Urban R2, apartment manager Marquette Cos. also is part of the deal.

Brad Friedman, executive vice president of Urban R2, said construction should start in the summer for 2014. He said he has letters of intent from a theater operator and from restaurateur Glenn Keefer.

FEDORA AURA: Optimo Hat Co. Inc. is known for its custom products, but must have something going for it underneath its chapeaus as well. The Chicago company is getting the city to donate to it an old firehouse for its new manufacturing center, which it intends to stock with museum quality hat-making equipment.

It will get a nearly 100-year-old firehouse at the northeast corner of 95th and Charles in the Beverly area. But Optimo, according to a report to the city’s Community Development Commission, will spend $422,000 fixing the building, which needs work because its windows have been open for years. The CDC approved the deal Tuesday.

The building has been appraised for $190,000, but city officials said it has been tough to unload, so a giveaway to a desirable user made sense.

DOING THE DEALS: Patrick Ryan is moving his Ryan Specialty Group LLC from the Aon Center, where he won naming rights for his former company. His current specialized insurance firm is leasing 18,000 square feet at Two Prudential Plaza, 180 N. Stetson, which still gives him those East Loop views. Studley Inc. represented Ryan. The move is due late this year.

David Roeder reports on real estate at 6:22 p.m. Thursdays on WBBM-AM (780) and WBBM-FM (105.9). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.

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