Chicago developer is front-runner to take over abandoned hotel in downtown Skokie, says attorney

A leading contender has emerged from a pool of eight to assume ownership of an unfinished hotel in downtown Skokie, according to an attorney working with the village.

Rodney Lewis, an attorney with Skokie’s outside legal counsel, shared that update with the Village Board on Monday, Oct. 5, in the latest report on the status and future of the property that has stood in limbo at 4930 Oakton St. ever since its construction halted in 2023.  

Lewis said Chicago-based Murphy Development Group — though it has not been chosen to be the project’s next developer — has made the most progress among the candidates so far in contacting the property’s lien holders and drafting a proposal for the project.

Village staff are now waiting on “final numbers” from the Murphy Group on potential timing and cost for completing the hotel, Lewis said. Any developer will need to earn Village Board approval before taking over the property. 

As The Record previously reported, construction of what was planned as a Homewood Suites by Hilton hotel halted in 2023 after the general contractor, Russell Construction, sued the project’s owner and developer, E&M Strategic Development, for allegedly failing to pay a $10.7 million tab.

Russell Construction’s lawsuit reportedly was consolidated last year with another complaint from X-Caliber Capital, E&M’s lender, whom the developer apparently owes approximately $9.7 million.

An independent arbitration panel was scheduled to begin deliberating in September on the priority order of parties’ claims, but the Village stepped in as an intermediary between the lien holders and potential developers to accelerate a deal for the property, Lewis said. 

That meant village staff reportedly worked with the project’s lien holders to discount or dismiss their claims, because even if parties’ claims are resolved through the court process, the claims are unlikely to return any money if the property continues to sit unfinished, Lewis previously said.

The arbitration panel last month requested an update on the parties’ discussions and the parties submitted a joint status report, Lewis said on Monday. The arbitration panel reportedly will vote on Oct. 23 whether to extend their stay on governing the claims or set a date to begin arbitration. 

Lewis said he expects the panel to extend their stay on formal arbitration in order to continue to give the parties time to create a plan “that’s going to be beneficial for all involved”; though it is possible the panel could vote to begin arbitration. 

Village Manager John Lockerby said the Murphy Group has already developed a property in Skokie — the Highpoint at 8000 North, a 12-story 153-unit apartment complex located at 8000 Lincoln Ave., less than a quarter-mile away from the abandoned hotel. 

The company’s website states the firm has developed more than $1.5 billion worth of commercial properties encompassing more than 4 million square feet.

Lewis said all eight of the potential developers who contacted the Village about the property promised to put forward a proposal, but the Murphy group “took the bull by the horns” and decided it wanted to be the first to submit a concrete proposal and lay out preliminary ideas. 

“They were very beneficial, or helpful, in getting the contractors who all are in the arbitration to go even lower on what they were going to ask to release their liens on the property because of the Murphy group and the relationship that they have with some of those contractors,” Lewis said. 

“So it’s already paid some dividends in that respect, leveraging that relationship to get even lower haircuts from the contractors,” Lewis said, adding that the Murphy Group’s current concept is to offer the property as a hotel. 

A third-party structural engineer analyzed the building last fall and determined the hotel’s physical structure is “still in usable shape,” but each winter may lead to decline and require more maintenance, Rodney Tonelli, Skokie’s economic vitality manager, previously said. 

Lockerby said on Monday that the village is in the process of securing another independent assessment of the property from a third party. 

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