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Developers dodge alderman in hotel squeeze play

Updated: September 1, 2013 6:37AM

Developers in Chicago have learned their lessons. They know that it’s usually a good idea to involve aldermen and community groups early when a large-scale building project gets proposed.

It’s just business sense to deal up front with the forces that, in the Chicago Way, can grease a development through City Hall approvals, or sidetrack it.

But that wasn’t the case with Waterton Associates LLC and RSL Building Corp., which have seized on the demand for more hotel rooms in Chicago to propose putting a Hyatt next to the Trump Tower and across from the new Langham Hotel. It would be wedged into 403 N. Wabash in an air-rights deal. The plan calls for an 18-story, 238-room hotel to be built on top of a parking garage serving the River Plaza condo building, 405 N. Wabash.

City officials last September certified that the proposal met the terms of the site’s zoning. Surprisingly, in a city in which aldermen get notification for driveway permits, nobody bothered to advise downtown Ald. Brendan Reilly (42nd).

Reilly sent a letter to affected property owners last week saying he opposed the proposal, which apparently came to his attention when the developers shared plans with him in their runup to get building permits. But he said he has no power to stop it.

The River Plaza site is governed by a “planned development” zoning classification in place since 1974. Reilly, who could not be reached for comment, noted in his letter that allowing two buildings on the parcel “was a decision made 39 years ago, when the immediate neighborhood was grossly under-developed and lacked the mixed-uses and density” of today.

The developers are represented by attorney Mara Georges, who brings clout to the table as corporation counsel under former Mayor Richard M. Daley. She did battle with Reilly over her boss’ unsuccessful push to put the Chicago Children’s Museum in Grant Park. Reached Tuesday, Georges declined to talk about the hotel without clearance from her clients.

With involvement from the Pritzker family’s Hyatt Hotels Corp., the project may have more solid financials than other hotel developments being floated.

BATTER UP: Proponents of the Chicago Baseball Museum have searched for a physical location for years. Tuesday, they announced they will do a feasibility study for building on the lakefront in Whiting, Ind. It would be part of a $45 million redevelopment that’s promised to include a hotel, upscale condos, restaurants, a fishing pier and other attractions.

ROLLING THE DICE: Who plans to open the most retail sites in the Chicago area? The answer, as provided by Baum Realty Group LLC, might surprise you. It is Dotty’s Café, a concept from Oregon that blends homestyle menus with video gaming. It’s designed as an alternative to bars that feature gaming. Beer and wine is available, but Dotty’s doesn’t said it isn’t emphasized and that sales of coffee and soda outpace those of alcohol by 20 to 1.

It plans its first Chicago area location at 2541 W. North in Melrose Park and reports it has 15 other stores ready to go in Illinois. But it is awaiting licensing from the Illinois Gaming Board, which regulates video gaming, and it can’t go into communities that ban the practice, including Chicago. The company is looking mostly in the collar counties. It reports having another 20 locations in the state in various stages of preparation and licensing. Dotty’s has 150 restaurants in three states.

HOTEL SALE: Los Angeles-based Laurus Corp. said it bought the 362-room Renaissance O’Hare Hotel, 8500 W. Bryn Mawr, and will spruce it up with a $6.5 million renovation. The hotel had gone through foreclosure, but Laurus President Jean Paul Szita said it is positioned for revenue growth as the region’s convention business and demand for office space increase. The price was not disclosed.

DOING THE DEALS: For $20.5 million, First Industrial Realty Trust took the plunge and bought an unleased 509,000-square-foot distribution center at 4100 Rock Creek Blvd., Joliet, at the intersection of I-55 and I-80. … Bridge Development Partners LLC said it bought two cold storage buildings totaling 307,000 square feet at the southeast corner of 26th and Western. Property records indicate it was a $17 million deal. Bridge invested with Akard Street Partners. … Baum Realty Group LLC said it represented InSite Real Estate Investments in the purchase of two suburban sites for Gardner School, a private preschool. The sales totaling $2.8 million involve parcels at the northwest corner of Willow Road and I-294 in Northbrook and the northwest corner of Butterfield Road and Summit Avenue in Oakbrook Terrace. … In a move from 333 W. Wacker, trading firm 3 Red Group LLC leased 11,000 square feet at 440 S. LaSalle, under the advice of CBRE Group Inc.

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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