E&M Strategic Development has paused construction of the Homewood Suites by Hilton Hotel and Conference Center in Downtown Skokie as it works to overcome historic, industrywide challenges impacting hotel development projects across the U.S.
Soaring interest rates and one of the most difficult capital lending environments in decades have prevented the project’s investor group from securing the additional financing needed to resume work at this time. Exacerbating these challenges, the project, which was initiated prior to the COVID-19 pandemic, has been impacted by dramatic and rapid increases in construction material costs, supply chain issues, and labor capacity limitations.
Catalyzing economic and commercial development in Downtown Skokie is a priority for the Village. As a public partner in this development, the Village proactively facilitated E&M’s engagement of an advisor, Murphy Development, with a successful track record in Skokie and of navigating industry challenges, and also authorized provision of a $4.5 million loan to move the project forward in the event that additional financing could be secured. Despite these actions, ongoing efforts by E&M and the project’s investor group have thus far not yielded the additional financing needed. The advisor and associated parties are exploring available options and are working to have a path reestablished as soon as possible.
Hilton remains committed to this project. The Village will continue to work with all parties to reach a resolution that supports continued economic and commercial development in Downtown Skokie, building on previous successes that include construction of the Skokie Swift Oakton Street CTA Station, development of Highpoint at 8000 North, and development of the Illinois Science + Technology Park – one of the Village’s top employment centers.
Are other hotel projects experiencing similar challenges?
Reuters reports that 98 U.S. hotel projects have been paused this year – including 59 since March when the banking crisis began – according to Build Central Inc., a research and analytics firm.
When will construction at the site resume?
At this time, the Village cannot provide a timetable for when construction will resume.
How is the site being maintained and monitored in the meantime?
The Village has directed the developer to restore public sidewalk access on Oakton Street during the project’s hiatus. E&M has contracted with a security company to ensure safety, security and 24/7 monitoring of the site. Village staff will also continue to monitor activity at the site. Please report any concerns online or by calling 847-933-8223.
Did the Village recently provide a loan to this project?
This spring, the Village authorized provision of a $4.5 million, 10-year loan from its Economic Development Fund as a public-private partnership, providing the Village the opportunity to join the general contractor, developer, lending institution, and other potential equity partners on the hotel project team. Although the loan was authorized, funds have not been released and will not be provided until the development team secures the additional financing needed to resume construction.