Chicago hotel occupancy remains below 30 percent but that isn’t phasing one hospitality group, which has big plans for a new property in Streeterville.
RIU Hotels & Resorts wants to develop a 388-key hotel at 150 E. Ontario St., Crain’s reported. It will provide details of the plan at a community meeting next week.
The Mallorca, Spain-based family-run chain has an ambitious timeline for the $200 million project, intending to begin building this summer and finish in two years, the report noted. RIU Grand Plaza Hotel will also not seek outside financing for its construction.
Alderman Brendan Reilly emailed constituents about the project, which will be designed by Lucien LaGrange Studio, according to the report. Intercontinental Real Estate has owned the development for a decade; a Marriott International-led group had previously planned to build a 330-key hotel tower there before the Great Recession hit.
Chicago-area hotels have been among the hardest-hit by the pandemic. They have suffered a host of related problems, with many owing millions in overdue property taxes and some facing foreclosure.
Bowing to the new reality, Magellan Development Group earlier this year slashed 300 hotel rooms from its planned mixed-use tower in Lakeshore East.
But RIU is looking past the pandemic, and will market the hotel to its network of international guests, said Michael Reschke, who was tapped as project developer. Existing RIU properties include those in Miami, New York and San Francisco.
“They don’t care about local demand,” Reschke told Crain’s, referring to the Riu family, which founded and operates the company.
RIU also weathered its own storm in recent years. In early 2018, CEO Luis Riu Guell surrendered in Miami to face charges of illegally compensating Miami Beach’s former top building official. Allegations against Guell included giving a city official discounted stays at some of the company’s luxury resorts. He is co-CEO with his sister, Carmen Riu Guell. They are also co-owners.
[Crain’s] — Alexi Friedman