For years, Oak Park officials have pushed to get a hotel built in the village's downtown. It appeared they might have finally won out, with a developer planning to construct a 20-story hotel and condo tower at the intersection of Lake and Forest, but that idea is being scrapped.
The Chicago-based developer hoping to reinvent that corner instead asked the village to shift gears on Monday. Sertus Capital Partners would rather build apartments because the hotel and condo markets have been hammered by the economy, Michael Glazier, principal for Sertus, told trustees.
"The hotel portion of the project was more affected than we ever anticipated," Glazier said. "Essentially, the hospitality industry has been limping along for several years. It's now recovering, but it's going to be a long recovery."
Average daily rates have been dragged down during that slump, and that would make the proposed 140-room hotel unable to compete with downtown Chicago. Glazier thinks the demand is there — thanks to two River Forest universities and local hospitals — but "people are discounting like crazy," making for a poor market to build a new hotel.
In the condo market, meanwhile, buyers just can't get mortgages.
"Condominiums have become the stepchild of the mortgage industry," Glazier said.
Originally, the project was to include 140 hotel rooms, 85 condos, and a 510-space parking garage. But Sertus wants to switch to 264 apartments (a mix of studio, one-bedroom and two-bedroom units), along with 330 parking spots for the development. The developer would keep the originally proposed 300 public parking spots, which would give the garage a total of 630 spaces.
Village hall and Sertus have been working for years to reinvent the northeast corner of Lake and Forest. Sertus Capital Partners owns the corner lot there, and the village owns an aging public garage.
Those talks culminated last year when the village board approved a 20-story glass tower, which would include a new public garage at the bottom. Oak Park said it would kick in almost $10 million for parking, along with a $500,000 incentive to get Sertus to build a hotel, but that incentive has been deleted from the agreement.
In order to change the project, Sertus needed an OK from the village board, which trustees gave in a 7-0 vote on Monday. The board expressed some concerns — that the proposed apartments were too expensive and have no coveted three-bedroom units — but not enough to kill the project.
Trustee Colette Lueck said the village was fortunate that it took such an extended period to OK the development because if it was built, Oak Park would now have a huge empty condo tower in its downtown. She believes the village could still eventually get a downtown hotel somewhere down the line.
"I don't think this means there will never be a hotel in Oak Park," Lueck said.
Glazier said they will tweak the plan and resubmit it to the village in the coming weeks. They plan to keep the height of the building relatively the same, while changing the uses inside. It would then need to be referred back to the Oak Park Plan Commission, which Village Manager Tom Barwin expects to happen by the end of July.
After the meeting, Kevin Murphy, an Oak Parker who lives up the street on Forest Avenue, and an opponent of the project, said it's more of the same. While the uses are changing, it still has the same perceived problems.
"It's just as tall and just as dense and probably has the same or greater shortfall of parking, which were the principal issues last time around," Murphy said.