By Aby Gallun
Downtown Chicago is getting a new hotel, a Wanda, a Loews and now, a Viceroy.
Trader and developer Don Wilson is teaming up with Viceroy Hotel Group, a Los Angeles-based chain of boutique hotels, to run an 180-room hotel that Wilson wants to build in the heart of the Gold Coast.
Wilson’s development company, Chicago-based Convexity Properties, submitted plans to the Chicago City Council last week for the 18-story building on the Cedar Hotel site, at 1118 N. State St. The project would include a rooftop pool and terrace and preserve the four-story brick and terra cotta facade of the shuttered transient hotel on the property, according to a zoning application.
Convexity has reached an agreement with Viceroy to operate the Chicago hotel, said Michael Perlstein, chairman of the zoning committee for the Gold Coast Neighbors Association. Convexity, which declined to comment, disclosed the Viceroy deal when it presented its plans for the hotel to the committee about six weeks ago, he said.
With the downtown hotel market heating up, more developers are launching projects and seeking hotel brands that lack a presence here. Wilson is building a 400-room hotel in Streeterville for Loews Hotels & Resorts that will open in a few months, the chain’s first in downtown Chicago, while Virgin Hotels, another newcomer, is opening a 250-room hotel in the East Loop on Jan. 15.
Yesterday, Chinese developer Wanda Group announced its plans for an 88-story tower on the Chicago River that would include a five-star Wanda hotel with 250 rooms.
UPSCALE CHAIN
Viceroy is an upscale chain that has hotels in U.S. cities including Beverly Hills and Palm Springs, Calif.; San Francisco; Miami, and New York, but none in Chicago. Outside the country, it runs hotels in Mexico and Abu Dhabi, United Arab Emirates, with plans for expansion in Portugal and Turkey.
A Viceroy spokeswoman would not confirm the location of the company’s Chicago hotel.
“The brand is currently in the process of finalizing many exciting up-and-coming expansion projects, Chicago being one of them, and we will have more information to share in early 2015,” the spokeswoman wrote in an email.
Though the downtown hotel market is as strong as it was before the recession, it’s getting crowded, with nearly 3,000 hotel rooms under construction. Yet the bulk of the development is south of the Chicago River, far away from the Gold Coast. The Viceroy’s closest competitor, the Thompson Hotel, has performed well since opening last year, said Roger Hill, chairman and CEO of Gettys Group, a Chicago-based hotel consulting and design firm.
“You look at the success of the Thompson Hotel, and there’s room for another lifestyle hotel in that neighborhood,” he said.
Chicago developer Mark Hunt had planned to build a 216-room Mondrian Hotel on the Cedar Hotel property, but that project fizzled after the real estate market crashed in 2008. A Wilson venture took over the property in early 2011 through a so-called deed-in-lieu of foreclosure.
Before Wilson can build the hotel, he needs the City Council to approve a zoning change for the site. It’s unclear whether Ald. Robert Fioretti (2nd), whose redrawn ward includes the property, likes the plan or will ask the developer to change it. He did not return phone calls.
Though residents in buildings close by might object to an 18-story tower, the Gold Coast Neighbors’ zoning committee doesn’t have any major concerns about it, said Perlstein, the committee chairman.
“It’s not huge,” he said. “They’re asking for 18 stories—they probably will get less—and if you look at what’s around it, we liked it.”
The hotel would be another step in the improvement of the block over the years, said Perlstein.
“People sort of forget that that was a seedy area,” he said.
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