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Thor Equities Planning a $150 million Rehab of the Historic Palmer House Hilton;
Preservationists Standing By to Criticize the Necessary Work to Bring
 Economic Viability Back to the Landmark Structure

By Ron Grossman and Blair Kamin, Chicago Tribune
Knight Ridder/Tribune Business News

May 12, 20069 - The Palmer House Hilton, a lynchpin of the Loop, took a major step toward landmark status Thursday--but only over the objections of preservationists who argued that the fine print in the designation would harm, not protect, its historic character.

With the new owner of the hotel planning to start a $150 million rehab late this year, the Commission on Chicago Landmarks voted 5-2 to recommend making the 79-year-old hotel, which fronts on State and Monroe Streets and Wabash Avenue, a city landmark. The City Council still must approve the designation, though a date for that vote has not been set.

Mayor Richard Daley's administration supports the renovation plan by New York-based Thor Equities because it will enhance the economic viability of the historic structure, which carries the last name of Potter Palmer, the 19th Century real estate magnate who transformed State Street into Chicago's prime retail corridor.

But the developer's plan to install two-story, steel-and-glass storefronts along State is meeting objections from preservationists and even two members of the landmarks commission, who took the unusual step of casting dissenting votes.

"Storefronts run in fads," said Commissioner John Baird in a telephone interview after the vote. He remembered when Karroll's Inc., the ground-floor menswear shop at the Reliance Building at 32 N. State St., put up a modern storefront that was later removed as part of the city-subsidized restoration of the turn-of-the-century skyscraper, now known as the Hotel Burnham.

"I was sitting there today recalling how much it cost the city to restore the Reliance, and I could see how much it was going to cost in the future to undo what we were doing to The Palmer House," he said.

A spokeswoman for the city's Department of Planning and Development, however, maintained that it is more important to provide a sound financial footing for the landmark hotel, which has been showing its age in recent years.

"It was done with the effort to preserve a grand structure," said the spokeswoman, Constance Buscemi. The new owner, she added, is committed to "preserve or rehabilitate parts of the building that are most historically significant."

Among those elements, the owner said, are the removal of the fire escapes on the State Street facade as well as the grill-like screens that try to hide them. The owners plan to redesign the Monroe Street entrance, using the hand-forged, bronze doors with a peacock motif that marked the C.D. Peacock jewelry store at the hotel.

The massive bronze doors, the hotel's brick-faced towers, a barbershop with silver dollars inlaid in its floor, and a magnificent barrel-vaulted lobby have long been recalled by visitors as a highlight of a trip to Chicago.

A guidebook to Chicago once hailed the lobby as "the people's club, men meet to settle political and commercial questions of vast importance."

Preservationists also criticized the owner's plan to narrow the western portion of the hotel's arcade, which links State and Wabash.

"A lot of the stuff they're doing is fine," said James Peters, director of planning for the Landmarks Preservation Council of Illinois, an advocacy group. But the narrowing of the arcade and the insertion of the steel-and-glass storefront, he added, "struck us as both needless and foolhardy."

"They're taking the visible public facade on State Street and creating this sort of glass base to it, which seems at odds with the classical design and vision of that building," Peters said.

Jonathan Fine, president of another advocacy group, Preservation Chicago, was even blunter, characterizing the planned storefronts as an "'80s shopping mall."

Designed by the renowned Chicago architectural firm of Holabird & Roche and completed during the boom times of the 1920s Jazz Age, The Palmer House is rich in Chicago lore.

The hotel is currently in its fourth incarnation. Palmer opened a predecessor in 1870, dedicating it as a wedding present to his wife Bertha, the grand dame of Chicago society. He was adding a second structure the following year, shortly before the Great Chicago Fire of 1871 burned both to the ground. He speedily rebuilt the hotel, which reopened in 1873.

As the current hotel replaced that building in the 1920s, guests were moved from the old structure to the new one, allowing the hotel to remain open even as it grew. Its main entertainment venue, the Empire Room, featured such performers as Maurice Chevalier, Guy Lombardo, Jack Benny, Carol Channing and the Merriel Abbott dancers.

rgrossman@tribune.com

bkamin@tribune.com

Press Release Issued by Owner Thor Equities

THOR EQUITIES, New Owners of the Palmer House, Says
 'All Systems Go' for the Historic Chicago Hotel

May 12, 2006 - The much anticipated restoration of the historic Palmer House Hilton since being acquired by THOR EQUITIES last year is moving ahead on schedule according to Mary Ann Cronin, Director of Development for THOR EQUITIES.

"Today's meeting with the City of Chicago's Commission on Chicago landmarks and the positive votes is an important first step in THOR EQUITIES exciting restoration plans for the Palmer House Hilton. THOR couldn't be more pleased or grateful for this vital demonstration of support and encouragement the city has given us today," said Margaret Tobin, Executive Vice President of Development, THOR EQUITIES.

"The timing of the restoration and rejuvenation of the Palmer House couldn't be more perfect," according to J. Peter Lynn, Palmer House Hilton general manager. The Chicago hotel market has been experiencing a tremendous growth in the past year with a number of leisure and business-oriented new hotels announced and beginning construction. "The Palmer House needs to be competitive, and our new owner's exciting and innovative plans over the next three years will return the Palmer House to its rightful place as one of the world's great hotels, and most assuredly one of the top hotels in Chicago. Hilton Hotels Corporation is delighted with THOR EQUITIES overwhelming commitment to the rebirth of the Palmer House. We are especially pleased that with all the new enhancements and upgrades to take place within and outside the hotel, our new owners are taking great pains to maintain, even enhance the historical integrity of the property," Lynn said.

"Plans are in the final stages of development and the commencement of phase one should begin sometime during the fourth quarter of the year," Cronin said. Cronin adds that specifics of the $150 million dollar comprehensive project will be revealed in early fall -- probably mid-September, but highlights just a few of restoration project's features: The unsightly exterior fire escapes and grill-like covers that camouflage them on the State street side of the hotel, dogging it for decades, will be removed and replaced with interior fire exit stairwells. Hotel guests can look forward to indoor parking, thanks to the creation of an interior parking garage that is part of the rejuvenation portion of the hotel. Further, guests will be greeted at both the Monroe and Wabash Street entrances of the hotel under newly reconfigured and lit canopies. Dramatic sky lights will create an open and inviting feeling.

The redesign of the Monroe street entrance includes relocating the spectacular hand-forged, bronze doors with their majestic peacock motif that were the signature of Chicago's first incorporated business, C.D. Peacock. "The relocation to the Monroe street entrance of the hotel will put them in a place where these magnificent doors can be better seen and appreciated," Cronin said. Being sensitive to the historical significance of the former C.D. Peacock jewelry emporium (now Ultra Diamonds), the retention and restoration of the original storefronts will return the corner of Monroe and State to its original glory and splendor.

Accommodations included in the rejuvenation program are 1,000 remodeled rooms, and 54 new suites, all with a focus on hospitality functions. A dramatic 4,000 square foot penthouse suite, costing over $9 million dollars will be the most luxurious of its kind in the city.

Still further plans include a full day spa, and a totally upgraded fitness center. Prominent in THOR EQUITIES plans for the Palmer House Hilton is a completely redesigned street arcade and State street frontage targeted to attract upscale retail operations more in line with today's higher retailer expectations. This new design will clearly make a statement about the Palmer House's entrance into its third century of operation -- again, being sensitive to its history.

"The restoration of what has been called, 'the Chicago hotel the world knows best' is truly going to be a labor of love for all those involved," Joseph J. Sitt, President & CEO of THOR EQUITIES said. "Moreover, our company's acquisition of the Palmer House and its return to grandeur is demonstrative of the reawakening of the downtown Chicago area, particularly the developments taking place south of the Chicago River. Clearly, a new chapter is being written in downtown Chicago's history. We believe THOR EQUITIES is leading the charge," Sitt added.

"The Palmer House is a welcome addition to THOR's outstanding portfolio of properties," said Sitt. "We are excited by the opportunity to further improve its stature through a $150 million dollar restoration and renovation program that will include an exciting new retail component. When the details and specifics of the program are released in September, the Palmer House will be making news throughout the world," Sitt said.

Ken Price,
Director of Public Relations Department of PalmerHouse Hilton,
+1-312-621-7326

-----

Copyright (c) 2006, Chicago Tribune

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