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Part of the University of Chicago’s Harper Court redevelopment plan to bring more businesses to the area, the hotel received $5.2 million in TIF funds to help offset the $28.6 million construction cost. The Harper Court redevelopment project, which also involves a 12-story office building and other businesses dotting 53rd Street, will sprawl over 1.1 million square feet.
Though TIF funds have gone to other parts of the Harper Court plan, the CSTC has taken aim at Hyatt and a member of its board in particular, Penny Pritzker, for allegedly misusing the funds. Pritzker, as a member of both the city's (unelected) school board and the Hyatt's board of directors, presents a serious conflict of interests, the CSTC argues. However, it's unclear whether the Hyatt Corporation has directly received TIF funding.
As U. of C. grad student Andrew Yale pointed out at the CSTC's press conference, the Pritzkers seem to be everywhere in this story. In addition to Penny Pritzker's involvement, her cousin, Thomas Pritzker, is on the U. of C.'s board of trustees and also serves as the chairman of Hyatt Corporation. And Margot Pritzker, Thomas's wife, is the chair of the governing board of the U. of C.'s charter schools.
The CSTC was spurred to action by severe Chicago Public Schools budget cuts in the area.
"We have some concrete demands. We are demanding the restoration of that $3.3 million dollars in cuts and the 27 cut positions," said Flynn Murray, a Hyde Park resident and CSTC member. "We are also demanding that Pritzker be kicked off the board, and that we get an elected school board just like every other school board in Illinois."
Though, as Yale conceded, "The Pritzkers themselves did not allocate the $5.2 million; that was the Chicago City Council."
"Hyatt is certainly the main beneficiary. The University of Chicago pushed for the building of this hotel and will be its other main beneficiary. Hyatt doesn’t need the money, and neither does the University of Chicago," said Yale.
Though the CSTC is rallying against Hyatt, its aim might be a little off. A statement from the Hyatt Corporation read, "The hotel, which is part of the Hyde Park Harper Court redevelopment project, is owned by affiliates of Smart Hotels LLC and The Olympia Companies and will be operated by the Olympia Companies as a Hyatt Place hotel under a franchise agreement. Hyatt does not own any stake in the hotel or the project."
So despite the fact that it's a Hyatt hotel, it's not really a Hyatt hotel: it's a franchise. Therefore the Olympia Companies received $5.2 million of TIF funds, not Hyatt.
However, a franchise is still a business deal, and the Hyatt Corporation will still make money from the hotel.