Financing Approved For New McCormick Place Hotel
The development of a 1,200-room “headquarters hotel” adjacent to the McCormick Place convention center on the Near South Side will be supported with up to $55 million in Tax Increment Financing (TIF) through a financial plan approved today by City Council.
The $421.5 million project at the northeast corner of Cermak Road and Prairie Avenue is being planned to accommodate large groups that hold conventions and shows at McCormick Place. Projected to create 3,700 temporary construction jobs, the hotel will include banquet and meeting rooms, restaurants, retail space, and offices.
“This is a true partnership between the City and McCormick Place that will fill a long-standing need by conventioneers and other visitors,” said Andrew J. Mooney, commissioner of the Department of Planning and Development, which administers the City’s TIF program. “In addition to improving the competitiveness of the City as a business destination, the hotel will generate new taxes and jobs while supporting the area’s planned revitalization as a mixed-use entertainment district.”
The hotel will be owned by the Metropolitan Pier and Exposition Authority (MPEA) and managed by a private hotel operator. MPEA, which owns and operates McCormick Place and Navy Pier, is in the process of acquiring the site. The adjacent American Book Company building, a designated City landmark at 320 E. Cermak, will be incorporated into the hotel complex.
A headquarters hotel is part of MPEA’s “Elevate Chicago” expansion initiative, which includes a 10,000-seat events center planned for the northwest corner of Cermak and Prairie and a smaller hotel planned for the southeast corner of Cermak and Michigan Avenue. Thirty six hundred permanent jobs are projected to be created through the Elevate Chicago plan.
The TIF assistance will partly reimburse MPEA for acquisition and TIF-eligible construction expenses involving the hotel complex exclusively. Additional financing will come from MPEA revenue bonds. Construction could begin in late 2014.
The hotel is projected to generate more than $66 million from lodging fees and $11 million in hotel taxes every year.
With nearly 9.9 million room nights booked in Chicago last year, hotel occupancy in 2013 was the highest ever at more than 75 percent, according to recently released visitor statistics by Choose Chicago, the City’s official marketing organization.
# # #