Hotel idea checks out of downtown Oak Park

Plan commission will take another crack at developer's proposal

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By Marty Stempniak

Staff Reporter

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.

Reader Comments

62 Comments - Add Your Comment

Comment Policy

Resident  

Posted: July 1st, 2011 8:54 AM

"we"..Who is We? Not the Village. Its called private development. People are allowed to buy buildings and develop new ones. Its a novel concept- even here in OP. Another one of the (4) blamers. Same line-different name. Happy 4th. Ha.

Never Gonna Happen from Oak Park  

Posted: July 1st, 2011 6:21 AM

This project was never going to happen as a hotel, as much as it would be welcome and is needed in Oak Park. I'm glad that discussions for practical solutions are underway. Now, if we can just keep the project from becoming ridiculous, we'll be fine...or maybe we could just put in a local grocer, an ice cream shop, and a pancake restaurant?? Oh, wait...we chased them out of town already. Nevermind.

The Truth Hurts  

Posted: June 30th, 2011 9:12 PM

It's a heck of alot more "developed" than under developed as it was. I wouldn't use the word SH*TH*^%! Just me.

epic lulz  

Posted: June 30th, 2011 7:37 PM

If Sertus would just go back to their financiers and tell them that one of the other two hotels in town sues their customers for bad reviews, they'd probably be able to get back on track with the hotel plan.

Renee  

Posted: June 30th, 2011 5:58 PM

Hey TTH--You're using the word "developed" rather loosely,aren't you?

pshhhh  

Posted: June 30th, 2011 4:54 PM

well well

The Truth Hurts  

Posted: June 30th, 2011 3:29 PM

Hey Renee, It was a decrepit old body shop lot that housed banged and bruised cars before being developed. I wouldnt say its as ugly as you make it out to be.

Paddy Boy  

Posted: June 30th, 2011 1:23 PM

I hope they can complete the hotel. I was hoping to stay in the "BED BUG SUITE"

john murtagh from oak park  

Posted: June 29th, 2011 4:35 PM

Marty - Thanks for your reply. As a reporter, I think you would have been curious about the circumstance of how the 1120club.wordpress.com got their post sometime during June 7 while your June 8 published article was posted on the WJ site at 10 p.m. A good reporter would wonder how his material got released to a blog before it was published. I am sorry if I offended WJ's or your integrity.

Renee  

Posted: June 29th, 2011 4:23 PM

@The Truth Hurts: Cheerlead all you want. I have to look at a sh*thole across the street everyday...and all I get are excuses.

Teresa Powell  

Posted: June 29th, 2011 3:54 PM

Comments include much discussion about this project and what's happening with it. Those who want to know more can review the 2 hours of discussion from Monday's meeting at this link: http://oak-park.us/public/pdfs/2011 Board Agendas/06.27.11_special_meeting_agenda.pdf Click on item A to go directly to this section.

The Truth Hurts  

Posted: June 29th, 2011 3:43 PM

Bank that loaned the money for the project went bye bye. I suppose the village is to blame for this too?

Renee  

Posted: June 29th, 2011 3:17 PM

@Maggie:Agreed we have to look at the eyesore on Home and S. Blvd. daily. Builder ran out of money and abandoned project. Village makes excuses. What's to prevent this from happening again?

The Truth Hurts  

Posted: June 29th, 2011 2:16 PM

S Marion and S Blvd=Success. Oak Park Ave South of Garfield=Success. South Blvd and Euclid=Success. Marion and Ontario=Success.

Enuf is Enuf from Oak Park  

Posted: June 29th, 2011 1:31 PM

Trustee Lueck proclaimed at the board meeting (06.27.11); "I want everyone to be clear, in approving the PUD ordinance, the board never promised a hotel. What we promised was to test the hotel in the market, and see whether or not it could fly." While the board took a year to test whether hotels could fly during a recession, Sertus informed the board last month that the village $4.45M land write-down provision to subsidize the now-grounded hotel needed to remain in their proposed amended RDA.

The Truth Hurts  

Posted: June 29th, 2011 1:12 PM

North Marion St=Success. Lake and Euclid (all 4 corners)= Success. Clarence and Roosvelt=Success. Colombian and N Ave= Success.Madison and E of Wisconsin=Success. South Blvd and Cuyler=Success. South Blvd and Ridgleand= Success. I have all the confidence that Lake and Forest will turn out just fine! :-)

Bankruptcy from Oak Park  

Posted: June 29th, 2011 12:33 PM

Oak Park never learn their lessons. Another 1120 Club is in the making and another bankruptcy is ready to file. Offices who run Oak Park will lost their jobs if they work for a private company. They ask for more money very year. They spend all the money very year. But, they never make any money. So sad.

Marty J. Stempniak from Wednesday Journal  

Posted: June 29th, 2011 12:18 PM

Mr. Murtagh-- I was the one who wrote the original article on 1120 Club LLC filing for bankruptcy. It appeared on the front page of our 6/8 print edition with my byline. For some reason, my name got left off the web version, but I went back and fixed that. We're not in the business of poaching articles from blogs.

john murtagh from oak park  

Posted: June 29th, 2011 11:43 AM

The idea for a WJ article on the status of existing luxury apartments is a good one. But 1st, who wrote the original article? The "exact RSC article appeared on the same day (6/7) in the WJ and on the http://1120club.wordpress.com/ Blog. No bi-line or attribution on either. So someone was poaching. I suspect it was the WJ since the 1120 Club blog contains articles on the RSC & Associates before and after June 7th. Blogs have weak standards - newspapers do or should not. What's the story here?

Peter from Oak Park  

Posted: June 29th, 2011 10:59 AM

The building is so tall, it's an eyesore. The variance was given on the basis of a design/purpose that no longer exists and therefore should be withdrawn. OP already is too densely populated; this building will not help things. It's back to the drawing board time!

Let's Look at the Whole Picture  

Posted: June 29th, 2011 10:10 AM

Marty, can you do a story that tells about occupancy in buildings along Lake Street? How is occupancy at 100 Forest Place for instance? How are the two projects at Euclid and Lake doing? How is the project/condos at 1124 Lake (RSC)? Is the developer actually in bankruptcy like this article says? http://1120club.wordpress.com/ Lousy decisions created this mess, will the next decisions also be made in that same special-interests way? Let's have look at the facts that really mean something!

Enuf is Enuf from Oak Park  

Posted: June 29th, 2011 8:51 AM

@CChesney: according to the RDA (06.29.09), the Village contribution of $14.56M is comprised of; a) $4.45M land write-down (existing parking garage parcel), b) $9.81M for new parking garage, and c) $0.5M hotel operator subsidy (no longer applicable). Zoning variances (such as height) and the $4.45 land write-down were provided by the village in exchange for a hotel. The problem is that Sertus has informed the village that these provisions need to remain in place in any amended RDA w/o a hotel.

maggy  

Posted: June 29th, 2011 6:48 AM

Seems like we have lots of apartments in oak park, also. Instead of bull-dozing ahead with this, can the eye-sore on Home & South Blvd. be taken care of? Tear it down, make a nice commuter park there.

romoly from oak park  

Posted: June 29th, 2011 6:22 AM

To all of you who commented about what a shame it is that there won't be this or that on the site, here's an idea. Take the personal risk to buy and develop the site yourself. No takers? That's because this isn't about the intentions of the Village or the Developers, it's about the lack of bank financing in today's real estate market. Unfortunately, Lake Street will be left with yet another gaping hole in it's streetfront because a financer is backing out half way through the process.

OP  

Posted: June 28th, 2011 10:34 PM

It hasnt made as much in tax revenue in the past couple of yrs BUT it will generate many, many more times what it was making in tax revenue when its up and going. Of the businesses that stayed in OP, their taxes remain. People come...people go. Thats life.

Craig Chesney from Oak Park  

Posted: June 28th, 2011 9:43 PM

An FYI - The plan commission process will start on July 21st, the board will review/approve RDA amendments at a July 18th meeting. Information on this plan that includes plan commission schedule, board meeting schedule for the RDA, possible RDA amendments, and Sertus' explanation of why the hotel isn't feasible, and what components of the RDA they want to change/keep are available at http://oak-park.us/public/pdfs/2011 Board Agendas/06.27.11_special_meeting_agenda.pdf

Mel Rose from Oak Park  

Posted: June 28th, 2011 9:38 PM

I am disappointed, like a number of others making comments, that the plan to build a hotel at the corner is off the table. A boutique hotel in Oak Park with banquet space would be a great addition that I feel is needed...The Carleton is a good hotel but there are many weeks and esp. weekends where it is completely booked up, often weeks in advance there are no vacancies available. It makes it harder to entertain family and host large events in this community so people have to look elsewhere.

Craig Chesney from Oak Park  

Posted: June 28th, 2011 9:25 PM

@Enuf is Enuf. Could you help me with the 14.6 commitment? I see land being contributed to the deal (~3mil)but I don't see anything else. I thought I saw an additional 10mil for parking, but I can't find it. OP -Resident the Village has spent $10,400 on an economic study by Mandigo.

Enuf is Enuf from Oak Park  

Posted: June 28th, 2011 8:51 PM

While the village has not yet expended any of the $14.6M it committed to the project, Sertus has successfully appealed the assessed value of the property for the past 3 years, due to their vacancy of the site, lowering the property taxes by 60%. As a result, since 2008, the village has lost about $250,000 in property tax revenue, and will continue do so at about $82,000/year as the site remains fallow. Also, sale taxes have been totally lost from the 7 businesses that existed pre-Sertus.

localop_sarah  

Posted: June 28th, 2011 7:33 PM

Marty - I just want to say thanks for reporting. What a mess. Seriously in this economy it is hard to get anything done isn't it?

OP Resident  

Posted: June 28th, 2011 7:25 PM

How do you know? What's your source?

OP  

Posted: June 28th, 2011 6:46 PM

The Village hasnt pent 1 penny on Lake and Forest

OP Resident  

Posted: June 28th, 2011 6:35 PM

Enuf, do you have an idea on how much Sertus has spent to date on this project? How about VOP? The location is so close to Downtown Chicago and public tranportation that it should attract plenty of interest from developers. The Village Board has indicated they are willing to work with any interested parties and has some funding assistance to offer. I doubt we are looking at the second coming of the Stankus Hole. Let's hope for the best!

Enuf is Enuf from Oak Park  

Posted: June 28th, 2011 6:35 PM

@JimCoughlin: Pope was very defensive about the board's previous decision to include a hotel, saying the rationale was sound at the time of the 2008 T R Mandigo hotel feasibility study. He said Mandigo knows more about hotels than anyone in Oak Park, and therefore, it was only logical for the board to jointly follow his advise. Sertus politely pointed out the Mandigo study was based only on demand drivers, and not capital markets, which was the reason it remains unfeasible to include a hotel.

Dave Coulter  

Posted: June 28th, 2011 6:33 PM

Timberline Lodge (among others) was a make-work project during the Depression. It is now a fantastic historic destination for travelers. Maybe all of our shovel-ready stimulus money shouldn't have been put to use paving roads? Is this as creative as our society can be?

Enuf is Enuf from Oak Park  

Posted: June 28th, 2011 6:21 PM

@Op Resident: during the meeting, Michael Glazier / Sertus stated that they currently have no debt equity financing commitment, and don't expect any commitment to be secured until the amended PD review process is completed (sometime in mid-Fall). If financing is not able to be secured at that time, Glazier stated they don't want to be the next Stankus Hole, and would sell their by-rights ownership to another willing party.

OP Resident  

Posted: June 28th, 2011 5:34 PM

Again not funny, OP. I find it interesting that both President Pope and Trustee Johnson have engaged in online discussions with John Murtagh and Jim Coughlin. Never with you, OP. Not one time. Considering how you try to shill for the Village Board, it would seem they might want to involve you in the discussion. Instead, they just ignore you as should the rest of us. Maybe their are offended by your attack style and do not want to be associated with the constant harping against Oak Park residents

OP from Bye Bye  

Posted: June 28th, 2011 5:32 PM

Jim Coughlin should just move. Everything he says is negative. Bye Bye loser.

OP  

Posted: June 28th, 2011 5:24 PM

murtagh, doesnt he(coughlin) have to answer the question. Why is he asking the question? My guess is either 1. he never liked it and doesnt like it now and wants someone to BLAME. 2. He just wants to point out that it was/is a bad decision and someone is to BLAME. Either way its such a ridiculous question being asked by someone who has nothing better to do than criticize everything he possible can. Ha

Jim Coughlin  

Posted: June 28th, 2011 5:04 PM

FLW neigbor has a good point. If the hotel project was scaled backed, would financing be easier to secure? Or do you need something that large to make it profitable?

FLW neighbor from Oak Park  

Posted: June 28th, 2011 4:39 PM

It's a shame not to have a public type of building at Lake/Forest. A hotel with meeting/party amenities, of modest size but with outstanding architecture that channels what FLW would build 120 years into his career (not Prairie), would be a welcome lure for people from all over the world. Why not be more welcoming and keep some of our tourists for longer than a few hours?

C Birkentall from oak park  

Posted: June 28th, 2011 4:26 PM

Build it and they will come. We need a modern hotel ( well-designed, proportionate to the neighborhood) in order to attract tourist dollars. I was not a fan of the design, but it is better than an empty lot and a sagging parking garage. Why can't we do both, long term apts and short term apts/hotel? Also why not a 3 bedroom apt? What is the demographic this building is trying to attract- that seems to be missing

WG from Oak Park  

Posted: June 28th, 2011 4:24 PM

Hallelujah. The hotel was a bad idea from the start. So are a few hundred new condos in this market. So is a high-rise in OP. So is ignoring the empty-nesters driven back to the city because they need 3 bedrooms, 2 baths (so both kids can visit at the same time, duh) but don't want stairs. Could ya listen to the community and the market for a change?

john murtagh from oak park   

Posted: June 28th, 2011 4:18 PM

Jim's win-win question is a fair one. This development has gone through a major change, will necessitate new and challenging financing, and the market for seniors is unproved. It is clear that the first iteration of the Lake and Forest Project was a lose-lose. Will the second iteration be win-win or lose-lose? Sounds like a fair question to me.

Taxes for Laughes  

Posted: June 28th, 2011 4:12 PM

"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." Wow - LOL!!! - talk about spin!! Or perhaps the Village took so long on everything else (e.g. Colt) that the market dried up....

OP  

Posted: June 28th, 2011 4:08 PM

I first have to question coughlins question. Is he expecting Pope to answer no, its now a lose lose? Any desicion the board makes is always in the best interest of Oak Park. New development on that corner will be a Win Win. New and increased tax revenue along with new retail and housing stock is a Win Win. I wasnt kidding either. It never seems to be a win win for coughlin, for anything the Village does. Am I wrong on that?

Ray Johnson from Oak Park  

Posted: June 28th, 2011 4:04 PM

Financing was a large part of last nights 2 hour discussion on this matter. The developer believes they will be able to proceed, if the approvals necessary are received.

OP Resident  

Posted: June 28th, 2011 3:59 PM

Not LOL at all,OP. Let President Pope answer the question. What was the purpose of your latest goofy comment and how did it add to the discussion? Stick to posting comments about things you know. Which are..............?

May  

Posted: June 28th, 2011 3:57 PM

So, for years many residents of Oak Park knew that the hotel industry was one to stay away from but the Village Board went ahead with this ridiculous plan. Then they wasted our tax dollars. If the money came directly out of the Boards' pockets, the decision would have been different.

Becky Brofman from Oak Park  

Posted: June 28th, 2011 3:46 PM

Does anyone else feel that given Oak Park's historic architectural tradition that this should be a better design than it is? I am embarrassed for the community.

OP  

Posted: June 28th, 2011 3:42 PM

For everybody else, but you coughlin! LoL

Jim Coughlin  

Posted: June 28th, 2011 3:40 PM

President Pope called the proposed hotel a "Win-Win" for Oak Park. Is this still the case?

Ray Johnson from Oak Park  

Posted: June 28th, 2011 3:37 PM

There will be a market study, parking and traffic study and public hearings before the Plan Commission.

O P Resident  

Posted: June 28th, 2011 3:17 PM

There is no mention in this article about the financing of this project. Did that come up?

Decimus  

Posted: June 28th, 2011 3:16 PM

@Epic lulz-I'm certainly no fan of the development debacles Pope has gotten us into, but no approvals without financing? Doesn't work that way.

Leah from Oak Park IL  

Posted: June 28th, 2011 3:13 PM

I am disappointed that the hotel will not be built and that yet another condominium project might be in the works. It is frustrating to see developers be rewarded with tax incentives to do more of the same. Oak Park truly needs hotel options that are not "out of this world" expensive and that keep our guests IN Oak Park.

epic lulz  

Posted: June 28th, 2011 3:08 PM

No. Absolutely not. The only reason such a monstrosity was approved in the first place was because it would give OP the long-coveted downtown hotel. No height variances for just another apt building. And another suggestion to the village board: no more approvals without financing already lined up.

Don Anderson from Oak Park IL  

Posted: June 28th, 2011 3:07 PM

That is too bad, as Oak Park really needs upgraded lodging. Our repeat guests have don't feel they get good value from the current Oak Park hotels, although the refurbished rooms at the Carelton are a step in the right direction. I guess that means more trips down town and to O'Hare for our guests.

Ann Courter from Oak Park  

Posted: June 28th, 2011 3:04 PM

We need convenient wheelchair-accessible hotel rooms in Oak Park.

john murtagh from oak park  

Posted: June 28th, 2011 3:03 PM

Will a market study on senior demand for expensive apartments be concluded by the July meeting, or will we just wing it?

Ray Johnson from Oak Park  

Posted: June 28th, 2011 3:02 PM

There will be no pool with the new proposal. The space will be used for a roof top garden/green roof instead.

johno from River Forest  

Posted: June 28th, 2011 2:58 PM

Has anyone noticed that the pool's location will not be getting the benefit of the sun after about 1pm everyday as it will be blocked by the tower to the immediate west? I stand corrected if I'm wrong here but it looks like that's going to be the case in this picture.

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