Once seized by the feds, Rosemont hotel undergoes $35 million transformation
When developer Rich Curto's deal to buy an old car dealership in Barrington's downtown fell through, his real estate agent directed him to what would be an even larger and riskier investment in Rosemont.
"I drove up and I looked at it, and it was very ugly," the Barrington resident said of the shuttered Edward Hotel at 6600 Mannheim Road. "I went, 'I don't know if I want to tackle this thing.'"
The nine-story, 274-room hotel at the edge of O'Hare International Airport had been seized by the U.S. Marshals Service after the arrest of owner Xiao Hua "Edward" Gong on fraud and money laundering charges in Canada.
"It was a bit eerie when we walked through the hotel," Curto remembers. "In one of the back offices, we saw safes that the U.S. marshals had blown open. We saw lunches that were left. We saw coats that were there. The ballroom was already fitted out for a wedding with name tags. The U.S. marshals had shut down the hotel in 20 minutes and locked it up."
But Curto soon realized the building - originally a Ramada in the 1970s - had great potential.
"I'm starting to walk through and I go, 'Whoa, this has great bones, even though it's interior-wise run-down.'"
Curto's Chicago-based Gateway Investment Partners acquired the property at auction in 2021 and has since poured millions into renovations - all told, a $35 million investment - to transform it into a dual hotel brand supported by the Land & Lake restaurant and top-floor Sky on Nine ballroom and event space.
Led by Rosemont-based ABAT Builders, a general contractor that specializes in hotel/motel renovations, the development team tore down walls and gutted bathrooms, splitting the old hotel into a 145-room Staybridge Suites on the east side and a 139-room Holiday Inn on the west.
It marks the first time the two hotel brands, both run by IHG Hotels & Resorts, are under the same roof in the United States. But Curto says the dual-brand scenario has started taking off in the past five to 10 years.
Though Curto was putting together the deal for the property in the middle of the pandemic, he was confident in the investment because of its proximity to the airport, the Allstate Arena and the Donald E. Stephens Convention Center. He's done industrial, office and retail projects over the course of a more than 40-year career but lately has been bullish about the hospitality space and apartments.
His marquee project until now was the $100 million gut rehab of the historic Fort Shelby Hotel in downtown Detroit, turning the then 90-year-old building into a 204-room Hilton Doubletree Suites and a 56-unit apartment tower. The building, on the National Register of Historic Places, had been vacant for more than three decades before it reopened in 2008.
In July 2021, Curto secured up to $6.5 million in tax increment financing funds for the planned renovation of the Rosemont hotel, with the promise he would spend at least $26 million on the project and open before the end of 2023.
The village established the TIF district, where property taxes collected above a certain level are earmarked to redevelopment projects, nearly a decade ago. The conversion of the old Wyndham O'Hare next to the arena into a Hyatt Place, La Quinta and Best Western Premier also has received TIF district money.
"From a real estate investment perspective, we knew it would take us over a year to redevelop it, and we felt very confident of its location," Curto said. "And this particular hotel market - a lot of properties were built a long time ago, and many have not been renovated. The hotel industry always wants new product because guests want newer product."
Schaumburg-based Hostmark Hospitality Group is in charge of operations at the hotel, which includes more than 3,000 square feet of first-floor meeting space, an indoor pool and a fitness center.
Chicago-based LM Restaurant Group opened its fourth outpost of Land & Lake next to the first-floor lobby, seating 92 in the dining room and 62 on a patio along Mannheim Road. Featuring a menu of "classic Midwestern-inspired dishes using locally sourced ingredients," the restaurant also has locations in Chicago's Andersonville and Ravenswood neighborhoods, as well as downtown.
The restaurant group's catering company operates the ninth-floor event venue, which boasts expansive views of planes taking off and landing to the south, and cars driving down the Jane Addams Tollway to the north. The room can accommodate 250 with a dance floor and up to 325 for a cocktail-style reception. It's where Curto's team hosted an aviation-themed opening reception late last month.
"It's probably the best event space in all of suburban Chicago," he said. "Nobody has views like this."