Friday, October 17, 2008

Where have all the Developers Gone?

posted by Peter Rossi

Many NIMBYs are fond of the theory that there is a long line of developers begging to build hotels on the DH site. Whether this is borne of ignorance or an incredibly inflated sense of self worth, it is an absurd fiction.

The fact is that there is only one developer, White Lodging, with any interest in DH. The current "white knight in the wings" is supposed to be Eli Ungar who is thought to have a limitless source of funds. Well, Mr. Ungar has a very full plate and needs to bring home his own Solstice, Shoreland, and Village Center proposals. He is on record as stating that he has no interest in this project at this time.

If you need any further evidence of how tough the climate is for development now, you should be interested to know that White Lodging has laid-off Scott Travis, who has been overseeing the DH proposal. In addition, White Lodging has put on indefinite hold ALL of its hotel development projects. However, they have made an exception for the DH project. This is due to the personal commitment that the owners of White Lodging have made to the University. The owner's father was treated at U of C Hospitals and this is the source of some affection for the old U.

Get real, this is the only chance for development in HP for some time to come.

15 comments:

Greg said...

Is there any news on the petition challenge?

edj said...

I don't know why UNITE-HERE hasn't brought in a hotel developer with whom they have a friendly relationship and who would be union friendly to build a hotel.

Oh wait. That developer doesn't exist.

chicago pop said...

edj: in light of Obama's likely support for the check-card bill, Unite-HERE's tactic on Drs Hospital is revealed as even more self-interested.

I'd like to know how often a "dry" precinct is voted back to a "wet" one. My guess is not that often. And if you take the way our favorite activist crowd has stalled the Point, the Drs Hospital building is going to be vacant for a long, long, time.

Peter Rossi said...

Petition Challenge will be decided next week; I believe on Wed.

chicago pop said...

Here is one aspect dry vote "tool" that its proponents view as a simple negotiating chip: if it passes, it can't be reversed before a 47 month period. (Conversely, if it fails, it can't be put on a ballot again for another 47 months.)

So, if the 39th is voted dry, we're looking, at a minimum, at 4-5 years of an empty building at Drs Hospital.

According to the Chicago Department of Business Affairs and Licensing:

If a precinct has been voted "dry" no liquor licenses can be issued to a business within the dry precinct unless, after a 47 month waiting period, the voters in that precinct decide to vote the precinct "wet" through a subsequent local option referendum.

How likely is this kind of reversal? The best chance to keep Drs from remaining a vacant shell for another decade is to kill this petition before it gets to the ballot.

All brought to you by the same collection of scorched-earthers who prefer crumbling lakefront infrastructure. A lot to be proud of!

ScottM said...
This comment has been removed by the author.
ScottM said...

Sorry, but the average time lag to open a hotel of this size/class is about 35 weeks not counting site prep.

More information here: http://www.hotelmotel.com/hotelmotel/Columns/Industys-momentum-can-be-traced-to-construction/ArticleStandard/Article/detail/522479?ref=25

If you throw in site prep, given the size and construction type of DH, then an opening in the beginning of year 5 (48 months or so) looks likely. Add to it the current and estimated continued slow down in lodging for the next few years (and the likely foot dragging by White before they start construction) and four years may even be too soon.

chicago pop said...

ScottM:

Not quite sure what you're sorry about. 35 weeks is much less than 47 months, and the current slowdown has nothing to do with White Lodgings' plans, which as Peter Rossi has pointed out have been exempted by the company wide hiatus on new construction. Barring a dry vote, they would move forward at DH without regard to the current crisis.

The WL hotel is a bird in hand.

If you throw in site prep, given the size and construction type of DH, then an opening in the beginning of year 5 (48 months or so) looks likely. Add to it the current and estimated continued slow down in lodging for the next few years (and the likely foot dragging by White before they start construction) and four years may even be too soon.

This assumes that WL would go ahead with site prep regardless of an alcohol ban, so that it could then lobby for a repeal of the dry vote 5 years from now. That's an incredible risk to take and I have seen no evidence that they are prepared to do that.

Further, no attempts were made to develop the DH site during the 6 years following its bankruptcy in 2000 before it was acquired by U of C, which coincided with the bulk of the real estate boom.

What evidence is there that if WL doesn't build there, anyone else will be likely to, especially if they have to wait 4-5 years, when the site was unattractive at the height of a boom, and any project would require an uncertain campaign to repeal the alcohol ban?

edj said...

Pop -

I was thinking the exact same thing about the check card and UNITE. Those guys must be idiots at that union.

edj said...

I want to say that Peter and Chicago Pop have been doing a fantastic job reporting on the Doctors Hospital situation.

chicago pop said...

Peter's quarterbacking this one.

So now we know that this little tactical maneuver is not quite the quid-pro-quo, reversible condition that Hans Burgermeister makes it out to be, but comes in fact with a nice 4-5 year price tag of no hotel development on the Drs Hospital site.

We also now know, thanks to diligent readers, that the time it takes to bring a hotel to market means that we would be waiting still longer were an alcohol ban in the 39th repealed in 2012.

But wait, cries the Wizard in the Tower (one sleepless Dr. Rechtschaffen), laboring over his magical orb to conjure up armies to do his bidding: There are other uses! Don't be fooled!

Perhaps an insane asylum (fittingly); or perhaps a cafe with lots and lots of seating room? There's the low-rise boutique hotel, which would (as Richard Gill pointed out) have to be enormously expensive to cover the costs of renovation or demolition without adding rooms vertically, and would of course appeal to the spendthrift crowd in Vista Homes when it was not housing sheiks from the Gulf; of course we could always use an animal kennel and perhaps a petting zoo with llamas crapping in the back yard, and certainly the south end of Hyde Park needs someplace for the pumpkin vendors and Christmas tree sellers.

The problem with all of these brilliant ideas is that we haven't seen any offers other than the one we have. And it's been some time now (6-8 years).

If the hotel project tanks, the University ought to consider using it as an annex to the Milton Friedman Institute.

That might annoy the neighbors even more than a Marriott. Poetic justice.

edj said...

The university, as I understand it, chose a site for its psych unit years ago. Although a psych unit would be apropriate for the precinct given their views on the neighborhood.

ScottM said...

Sorry meant to write 35 months not weeks.

I also thought that most of the time spent until the UC acquired DH in Sept 2006 was due to the overly long bankruptcy so it really wasn't available from 2000-2006.

Lastly why does no one talk about the 2020 plan's hotel @ 60th & Stony (instead of the even less historically significant parking lot?)

Elizabeth Fama said...

"Sleepless Dr. Rechtschaffen..." I get it! He was the director of the sleep lab before his retirement. Highly nuanced wit, C-Pop.

Peter Rossi said...

imitation is a sincere form of flattery. See my original post on Dry petition