WICKER PARK — With plans under way to convert a vintage office building and warehouse into a luxury hotel bringing as many as 120 rooms to the neighborhood's main intersection, some bed and breakfast operators are worried there might not be room for everyone.
"It's a free market society. I can't compete with 100 rooms," said Laura Yepez, owner of the seven-room Wicker Park Inn at 1329 N. Wicker Park Ave.
Describing himself as "a realist," Ray Reiss, owner of the 11-room Ray's Bucktown Bed and Breakfast at 2144 N. Leavitt St in Bucktown said the Northwest Tower "could put four families out of business."
Convexity Properties plans to open the boutique hotel, restaurant and retail complex at 1600-26 N. Milwaukee Ave. in 2015.
Wicker Park Inn and Ray's Bucktown Bed and Breakfast are two of four local bed and breakfast hotels that offer a combined total of 35 rooms.
Describing the ecosystem of existing hotels as "a tight-knit community of businesses who happen to be in the business of having guests stay with them," Yepez said over the past 10 to 15 years the innkeepers have been "an economic engine that brings people into the neighborhood."
Though Yepez said she's not feeling the pinch from the recent opening of hostels like Division Street's Holiday Jones, which serves a younger clientele looking for cheap rooms, she said the skyscraper component of the boutique hotel plan that will offer 75 rooms at $159 per night may force her to reduce rates or alter her pricing model.
Because the city requires bed and breakfast owners to live in their businesses, the encroachment of large-scale competition can be a personal issue, too. For Yepez and Reiss, their homes are their livelihood.
Having begun to rebound from the subprime loan crash of 2010 over the past two years, Reiss said in a "worse case scenario" he would lose 25 percent of his business to the Northwest Tower project. He may have to lay off people and consider selling his business, he said.
Fast becoming a popular destination for travelers, four of the city's 17 bed and breakfasts are in Wicker Park, which is a short trip to Downtown and offers three CTA Blue line "L" stations and easy access to the Kennedy Expressway.
Both Yepez and Reiss said their occupancy was around the city norm of 70 percent and acknowledged that the hotel project, long in the neighborhood's pipeline and greeted with excitement by many in the community, was inevitable.
"This neighborhood is ripe and ready for a hotel. There are hotels in Lincoln and Lakeview other parts of Chicago," Yepez said.
Yepez charges between $139 to $199 per night for her inn's rooms while Reiss said his rooms range from $119 to $209 per night.
At a community meeting last week, the Northwest Tower developers said they planned to rent rooms at $159 per night in the landmark tower at 1600 N. Milwaukee Ave. They have not decided yet on rates for the shared rooms in a warehouse they are converting at 1618 N. Milwaukee Ave.
Kapra Fleming, owner of the nine-room House of Two Urns at 1239 N. Greenview Ave. and president of the Chicago Bed and Breakfast Association, declined to comment on the impact of the tower project on her business.
Fleming, whose Inn rates run from $109 to $189 per night, said that when she opened up her vintage two-flat apartment building to guests 22 years ago, "Wicker Park was not a destination."
Evan Meister, a real estate analyst with Convexity Properties, declined to comment on the impact the hotel might have on the existing bed and breakfast industry in Wicker Park.
Ted Mandigo, a hotel and hospitality consultant that Convexity used to determine potential occupancy rates, said, "People take a different viewpoint depending on whether they feel threatened by a project or not."
As the economy rebounds, Mandigo said hotel operators are "centering their attention on neighborhoods" rather than Downtown, which is a return to how things were 50 years ago.
"Look at Lincoln Avenue. You come across a whole strip of properties that existed because there was a market in those neighborhoods," Mandigo said, adding that during a period of consolidation, the hotel market "pushed Downtown."
"More and more, there's an appreciation of different nuances in a neighborhood, local activities and restaurants. People are looking around for other pocket markets, areas that are underserved," Mandigo said of hotel operators.
Bed and Breakfasts in Wicker Park, Bucktown:
Ray's Bucktown Bed and Breakfast, 11 rooms, 2144 N. Leavitt St. Ph: 773-384-3245
House of Two Urns Bed and Breakfast, 9 rooms, 1239 N. Greenview Ave. Ph: 773-235-1408.
Wicker Park Inn, a Bed and Breakfast, 7 rooms, 1329 N. Wicker Park Ave. Ph: 312-804-5085.
The Ruby Room, 1734-45 W. Division St., 8 rooms, Ph: 773-235-2323.