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Illinois Medical District Signs Off on $300M Hotel, Apartment Project

By Chloe Riley | July 22, 2014 4:49pm | Updated on July 22, 2014 6:03pm
  The Illinois Medical District commission voted   unanimously Tuesday   to award Gateway Development Partners a contract   for a 10-story, 225-room hotel on nine acres of land at 2020 W. Ogden Ave. 
Gateway Development, Medical District
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MEDICAL DISTRICT — The Illinois Medical District commission approved Gateway Development Partners to develop a $300 million hotel project on the Near West Side — a move that comes months after one of the group's principal members was turned down for the project after his unpaid federal taxes came to light.

On Tuesday, the commission unanimously approved Gateway Development Partners to develop the "IMD Gateway Development," which includes plans for a 10-story, 225-room hotel on nine acres of land at 2020 W. Ogden Ave. 

In addition to the hotel, the IMD Gateway Development project also includes plans for 92,000 square feet of retail space, including restaurants, a fitness center and a daycare center. The proposal would also feature a five-story parking garage, medical offices, urban farm greenhouses and a 16-story, 200-unit apartment building aimed at young professionals and students.

Higgins Development Partners — one of three developers that make up Gateway Development Partners — was initially selected as the lead contractor on the project until the company was suddenly dropped after evidence surfaced that the group's founder, Jack Higgins, owed the federal government more than $2.5 million in back taxes.

Medical district spokeswoman Heather Tarczan said Tuesday Higgins is on a payment plan for the taxes, but couldn't confirm details of that plan. She said the district thoroughly investigated Higgins' other finances and uncovered no additional problems.

Gateway Development Partners was chosen primarily due to its inclusion of a large number of subdevelopers, which will allow for the project to be completed all at once, rather than in phases, Tarczan said.

Gateway's other partners include Elzie Higginbottom's East Lake Development Corp. and a real estate company owned by former Detroit Piston Isiah Thomas, who grew up in Chicago.

Those four partners will contribute 10 percent of the project's capital, with Chicago-based Harrison Street Capital LLC picking up the 90 percent balance, Tarczan said. 

Bids from Vermillion Development Corp., Clayco., Cullinan Properties and Kachadorian Group were rejected.

Gateway will initially pay the district $1 million a year to lease the property, which includes the 9.5 acres at Ogden and Damen avenues, in addition to a smaller chunk of land at 1910 W. Harrison St.

Lease payments will increase by an additional 3 percent every five years for the remainder of the group's 75-year lease. 

Construction is expected to begin by spring 2015, Tarczan said. 

Higgins was not at the meeting. He could not be reached for comment.

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