The Purple Hotel is located at the corner of Lincoln and Touhy Avenues.


4500 W Touhy Ave
Lincolnwood, IL 60712

Purple heart: Fond investor wants to preserve, expand hotel

Ryan Ori
23 Dec, 2011
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(Crain's) — Long live the Purple Hotel.) 


So says a Skokie investor who plans to rehab and preserve the shuttered inn at Touhy and Lincoln avenues in north suburban Lincolnwood.


Erez Baver, president of Skokie-based North Capital Group, says he will complete the purchase of a defaulted loan on the Purple Hotel before the end of the year. Mr. Baver has chosen Weiss Properties Inc., also of Skokie, to redevelop the site with a gutted and expanded hotel and retail, if he is able to take control of the property.


“There's so much history and so many memories with the building,” Mr. Baver says. “The building is still structurally sound. Our hope is to keep the hotel piece, add in convention and meeting space, and really make it a destination.”


Bringing Mr. Baver's plan to fruition could involve a difficult legal battle. On Tuesday, the hotel's owner, a group including father and son investors Kun Chae Bae and Donald Bae, filed for Chapter 11 protection in U.S. Bankruptcy Court.


That courtroom maneuver blocks a foreclosure suit by First Midwest Bank N.A., which has agreed to sell Mr. Baver the defaulted loan at the center of the suit. The move also could allow the Baes to push ahead with their own plan to demolish the hotel at 4500 W. Touhy Ave., along with buildings on two adjacent parcels also owned by the family, and then auction off the entire development site.


The Baes think the three parcels would fetch more in an auction if they were cleared and sold together, says their lawyer, Paul Bauch, a managing member of Chicago-based Bauch & Michaels LLC. The sale would allow them to settle up the $4.2-million foreclosure suit with the bank — or, more likely, with Mr. Baver, the new owner of the loan — and pay off about $3 million owed to Chicago-based Foster Bank for the other two parcels, Mr. Bauch says.


A bankruptcy judge would need to sign off on Chapter 11 reorganization plans before the owners begin steps such as demolition, marketing of the property and an auction.


Since it closed in 2007, the hotel has been an eyesore, and the owners have been cited with dozens of code violations. Gutting the building would likely involve first removing mold and rodents, but Mr. Baver says an engineer has declared it structurally sound.


Several developers have looking into taking on the project, and Crain’s reported in November that Highland Park-based Tucker Development Co. had agreed to buy the debt from First Midwest.


Village lawyer Steven Elrod, a partner in the Chicago office of Holland & Knight LLP, says the top priority is moving the long-blighted property toward redevelopment. He says the Chapter 11 filing has no impact on the village's plans to level the hotel.


If the building were to be torn down, Mr. Baver says, he would no longer be interested in a redevelopment there.


“I think the village has had many years of frustration with that building,” Mr. Baver says. “Now they have a demolition order and a way out of the property. I think they do like our plan, but they're nervous about how much longer our process will take.”


Mr. Baver did not disclose what he will pay for the mortgage, which is being sold by Riverwoods-based real estate brokerage Podolsky Northstar CORFAC International.


After gaining control of the hotel site, the North Capital-Weiss venture would look to buy the other two parcels from the Bae family, Mr. Baver says. Mr. Baver's lawyer, Mitchell Lieberman of Noonan & Lieberman Ltd. in Chicago, did not return a call.


The plan is to preserve the 293-room hotel but not the name, Mr. Baver says. He envisions bringing in a national hotel brand but operating it as a boutique hotel. Mr. Baver says an expansion would add enough banquet and meeting space to accommodate conventions for as many as 800 people.


In addition to investing about $20 million to fully gut and update the hotel, Mr. Baver says he would put retail in other buildings on the site.


The West Rogers Park native's fondness for the Purple Hotel grew as he attended events such as weddings and bar mitzvahs there and even watched Chicago Bears games at the hotel bar, he says.


Musicians such as Barry Manilow and Roberta Flack stayed at the hotel in its 1970s heyday. Its wild history also includes the 1983 shooting death of Allen Dorfman, a reputed Mafia associate, in the parking lot. Political fundraiser Stuart Levine, a government witness in recent federal corruption trials against Tony Rezko and William Cellini, testified that he and friends would have regular parties at the Purple Hotel, where he would binge on drugs including crystal meth and animal tranquilizers.


“We feel that this would be a great opportunity for us and the village,” Mr. Baver says. “It would be a real rotten shame to see this building go.”



Take a Tour Inside the Infamous Purple Hotel

Take a look at some of the galleries we found on the web with pictures of the Purple Hotel in its current state.


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