Celebrity Investors to give Talbott Hotel a Makeover

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Celebrity Investors to give Talbott Hotel a Makeover

By: Ryan Ori
Crain's Chicago Business

The Talbott Hotel is headed for a new look after it was acquired by an eclectic investor group that includes two well-known Chicago real estate firms, actor John Cusack, former hockey star Chris Chelios, businessman Bill Rancic and billionaire hotel investor John Pritzker.

A venture of Sterling Bay and Conlon & Co. completed a $51 million purchase of the Gold Coast hotel this week from Basil Kromelow, who had owned it for 50 years, Sterling Bay Partner Matt Menna confirmed. Kromelow and his father, the late Jack Kromelow, bought the hotel at 20 E. Delaware St. in 1965.

Crain’s first reported in August the Chicago firms had a deal to buy the hotel. But Conlon Chairman Sean Conlon, who arranged the deal, now confirms investors in the project include Cusack, Chelios and Rancic, as well as Chicago hedge fund manager Joe Scoby and Chris Spence, grandson of Burger King co-founder Jim McLamore.

One key investor is Pritzker, who will have an active role in the 16-story, 149-room hotel. His San Francisco-based Geolo Capital is investing in the project, and his Joie de Vivre chain—part of Geolo’s hotel management company, Commune Hotels & Resorts—will manage the hotel, Menna said.

The new owners plan to invest $15 million to $20 million refreshing common areas such as the lobby as well as the rooms, a project expected to take 18 months, Menna said.

‘TREMENDOUS SITE’

Sterling Bay is known more for providing unique offices spaces, including Google’s soon-to-be Chicago office in the former Fulton Market Cold Storage building. But across from that building, Sterling Bay plans an Ace Hotel.

“We like acquiring great assets,” Menna said. “It’s a tremendous site and a great, reputable brand. We feel we can apply our process, which is taking a building with good bones and making it better. We think it will be one of the best boutique hotels in Chicago when we’re done.”

The Talbott has been rated a Four Diamond hotel every year since 2007 by AAA. The hotel’s entire staff, led by Troy Strand, the general manager for more than 25 years, is being retained, Menna said. The name will remain.

“The Talbott has a strong name in the marketplace, and we want to maintain that,” Menna said.

Kromelow did not return a call requesting comment.

Pritzker’s firm has already been involved in three other Chicago hotels: the Hotel Lincoln, the Thompson Chicago and the Chicago Athletic Club.

Geolo and a unit of Chinese auto-parts maker Wanxiang Group in August announced they’re teaming up to invest $1 billion in hotels. Wanxiang also has invested in several of Sterling Bay’s projects.

Conlon’s recent projects include a $14 million purchase of the River North building leased to the Rainforest Cafe and a $6.6 million deal for a River North loft building that will become his firm’s new headquarters.

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