Chicago Eyes Struggling Selina Hotel for Homeless Shelter

Mayor Brandon Johnson is eying a hotel near the Magnificent Mile that’s been run by a struggling European operator whose landlord is facing a foreclosure complaint to help alleviate Chicago’s homelessness crisis.

The city aims to convert the Selina Hotel at 100 East Chestnut Street into a homeless shelter starting next month, Crain’s reported. A grant from the Illinois Department of Human Services will help fund the initiative.

The downtown property is expected to house 116 people and serve as a shelter for up to seven months, according to mayoral spokesman Ronnie Reese, who referenced the upcoming winter months as the reason for the swift decision.

Reese added that the conversion plan is unrelated to the thousands of unhoused migrants in Chicago, which has prompted the city and developer Michael Reschke to explore downtown sites and suburban hotels as possible migrant housing facilities. The Johnson administration has been criticized by some who claim there has been a lack of transparency regarding migrant housing sites, including city council members who believe they’re being excluded from the decision-making process.

The Selina Hotel’s owner, Indianapolis-based investment firm Hotel Capital, has been facing financial challenges, including a $25 million foreclosure lawsuit from the property’s lender, which is an affiliate of JLL’s LaSalle Investment Management. Hotel Capital bought the property for $22.5 million in 2018.

However, Hotel Capital CEO Michael Collier has put the blame on Selina, a lodging startup which leased the hotel property from his firm and has had its valuation decimated since going public last year.

At the time the foreclosure suit was filed earlier this year, Selina denied Collier’s accusation that it was behind by several million dollars in rent.

Labor union Unite Here Local 1 said the hotel’s employees are facing the prospect of being laid off if the property is converted into a homeless shelter, and told the outlet that Collier is “in the process of finalizing the details for the potential reacquisition of the hotel management from Selina.”

The union asserted that its members can continue working there while it functions as a shelter, adding that it wants to collaborate with the appropriate parties “to ensure that vulnerable populations are cared for,” the outlet reported.

Despite Mayor Johnson’s intentions to address homelessness — a major focal point throughout his campaign and tenure —downtown Alderman Brendan Reilly of the 42nd Ward criticized the move.

“I strongly oppose Mayor Johnson’s bad decision to convert a revenue generating hotel property, just steps from Michigan Avenue, into a city shelter that will result in the loss of many good paying jobs that help to support Chicago working families,” Reilly told the outlet.

— Quinn Donoghue