26-Nov-14 – The hotel being built at the corner of Michigan Avenue and Wacker Drive will get a partial break from paying property taxes over the next 12 years. The city council has approved a property tax incentive worth $9.9 million to the new owners of London Guarantee Building.

Chicago-based Oxford Capital Group, LLC, and investment advisors Angelo, Gordon & Co. bought the 91-year-old 21-story 280,000 square foot building on July 29, 2013. Published reports say they paid $57 million.

They are now spending $126 million to convert it into a 372-room hotel. A 22-story addition is being built on a former parking lot west of the building on Wacker Drive, which will give the hotel another 80 rooms. The first and second floors will contain meeting and conference rooms, ballrooms, fitness center, restaurant, and retail space. The hotel should be completed by September 30, 2016. Oxford has invested in ten hotels in the Chicago area, including River North’s Hotel Cass, Hotel Felix, The Godfrey, and The Langham. (Left) London Guarantee Building from across Wacker Drive on a foggy morning in 2013.

County tax incentive requires city ordinance

The “Class L Property Tax Incentive” offered by Cook County encourages preservation and rehabilitation of historically and architecturally significant buildings. Property tax assessments are reduced ten percent for ten years, then 15 percent during the 11th year, and 20 percent during the 12th year.

Owners must invest at least half the market value of their building in a rehab project and they must have the approval of the City of Chicago. Mayor Rahm Emanuel introduced the ordinance supporting the hotel’s incentive on October 8.

Project created 200 construction jobs

Workers are restoring the building’s masonry, windows, and rooftop. They are removing concrete slabs, removing or repurposing mechanical, electrical, HVAC, and plumbing systems, refurbishing elevators, and installing kitchen and laundry facilities.

W. E. O’Neil Construction is the project’s general contractor. Their fee of $1,255,000 is listed in city documents. Simeone Deary Design Group will get $658,000 for interior design. The law firm DLA Piper earned $50,000 assisting with the application for the tax incentive.

Building housed radio station, jazz nightclub Constructed in 1923 for London Guaranty & Accident Company, architect Alfred S. Alschuler’s building was designated an official Chicago landmark in 1996. Crain Communications Inc. owned it from 2001 to 2013. The building was home to radio station WLS in the 1960s, 70s, and 80s. Paul Harvey recorded his daily syndicated radio show there. Chicago’s first jazz nightclub was located on the west side of the ground floor, in space now occupied by Corner Bakery. (Right) A 1930s postcard featuring the London Guarantee Building.