Corbett hopes to use Sinclair insurance payout to buy Crowne Plaza hotel

A day after announcing that the city would bid to buy and refurbish the long-struggling downtown Crowne Plaza Five Seasons Hotel, Corbett on Friday said he will ask the City Council to make the purchase with the more than $3 million now sitting in a City Hall account from an insurance payout stemming from a 2009 fire at the city-owned, former Sinclair meatpacking plant.

The fire-insurance payout should be enough or more than enough to buy the hotel if the city gets its way on the deal.

It turns out that the former Sinclair plant shares something of a kinship with the Crowne Plaza Five Seasons Hotel. Both ended up in bankruptcy court. After that, both ended up in a buyer's hands for little or nothing. And now both may end up being purchased by the city.

At Thursday's news conference announcing the city's intent to buy the hotel, council member Chuck Swore made note that the City Council took some public ribbing when it spent $2 million - the Hall-Perrine Foundation also donated $2 million - to buy the Sinclair eyesore just south of downtown in early 2007, a purchase which now has the city smiling all the way to the bank.

Of course, the council never foresaw that the Sinclair plant would be hit both by fire and flood, which now has sent the $3.5-million insurance payment the city's way and which will give the city another $18 million more in federal disaster money because the Sinclair plant, of little use at the time of the flood, can't be used again. Federal disaster dollars also are paying to demolish the place.

Corbett on Friday said some of the $18 million that the city gets because it can't reuse the Sinclair plant could potentially be used to help renovate the hotel if the city succeeds in buying it.

The mayor said he was confident that the city could purchase and renovate the 275-room hotel without “saddling” local taxpayers with an additional tax burden.

The Crowne Plaza, the downtown's only hotel, is now owned by CWCapital Asset Management, the creditor who bought it at a sheriff's sale in December 2009.

The sale of the hotel is being handled by the Chicago office of real estate firm, Jones Lang LaSalle, and a picture of the hotel is on the firm's Web page.

City officials have said the firm has tried to sell the hotel without luck. A unique set of agreements with the city on air rights, parking, a ballroom and other issues make the property hard to sell, city officials have added.

Corbett, council members Swore and Justin Shields and city consultant John Frew on Thursday said it makes sense for the city to buy the hotel now and refurbish it because it sits in the midst of the city's $67-million Event Center project, which will upgrade the U.S. Cellular Center arena and add a convention center beside it on what is now Third Street NE.