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From SRO to AAA/Fitz Gerald Out of Space

Budding hoteliers Gene Kornota and Tony Klok have room at the inns.

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From SRO to AAA

Tourism brochures often tout Chicago as the city of neighborhoods, but many visitors don't venture outside the central area. Two Chicago entrepreneurs, Gene Kornota and Tony Klok, aim to entice tourists and business travelers to actually stay in those neighborhoods. The pair have been turning several north-side SROs into a chain of small hotels known as Neighborhood Inns of Chicago. At present they have 212 rooms spread over the Surf Hotel east of Broadway, the City Suites Hotel on Belmont, and the Park Brompton one block south of Addison and Lake Shore Drive. They also recently acquired the Lake, a former transient hotel at 3434 N. Broadway, and expect to convert that into a 60-room hotel by mid-1997.

The hotel business--with its high overhead, stiff competition, and boom-and-bust cycles--is notoriously difficult, even for industry veterans. And Kornota and Klok are far from seasoned pros. While pursuing full-time careers as engineers, they started moonlighting in real estate. At first they bought and renovated small apartment buildings on the city's northwest side. But while traveling in Europe, they took note of the many small hotels, or pensions, and wondered why there was nothing like them back home.

After returning to Chicago, they came upon the decrepit Surf Hotel, which they purchased for a bargain $850,000 in 1988. "I fell in love with the facade," explains Kornota. In 1989 they took over the Wilton Hotel and turned it into the City Suites, and in 1993 they bought a women's residence and converted it into the Park Brompton. Financing wasn't easy for the two budding hoteliers. Banks, says Kornota, were reluctant to lend money to people with no hotel experience, so much of their redevelopment capital had to come out of cash flow, which slowed the rehabbing process. Renovation of the three properties also was delayed because Kornota and Klok tried to ensure that all the former residents of the three buildings had other places to go.

Kornota's wife Bonnie, a former buyer at Marshall Field's, played a key role. She spent $1 million just to redo the Surf in a French Imperial style, with gilt-frame mirrors and a bust of Louis XIV in the lobby. The Park Brompton's decor is English Tudor, with lots of dark wood and a fireplace, while the City Suites is outfitted with 1920s Americana. A continental breakfast is served at all three properties, and Kornota hopes to introduce afternoon tea next year at the Park Brompton.

While the overnight rates of $79 to $89 are not exactly in keeping with a budget pension, they are far below the cost of staying on North Michigan Avenue. Kornota says the hotels' clientele includes a large number of businessmen and artists. Their three places are also listed in tourism advertising as official hotels for the Lincoln Park Zoo, the Chicago Historical Society, and the Chicago Academy of Sciences, all of which are situated in nearby Lincoln Park. Despite being on call 24 hours a day, 365 days a year, Kornota says he and Klok intend to forge ahead. "It's much more exciting than the apartment business."

Fitz Gerald Out of Space

I'm still in denial," says art dealer Fitz Gerald, who last week closed his Space Gallery, which specialized in contemporary work by Chicago artists, after six years in business. "I kept looking for a way to pull it out, like we'd get that one miracle sale. It just didn't happen."

In recent years Fitz Gerald became known for encouraging a collaborative spirit among art dealers and artists, often mounting cooperative shows, a practice that may have been good for art but apparently not for making money. Last year he moved Space into the thick of the River North district, setting up shop among galleries that usually deal in the work of more established artists. He mounted shows by Amy Yoes, Martha Ehrlich, Spencer Dormitzer, M.W. Burns, Thom Osborn, Mike Lash, and others. But he admits that the closing was a long time coming. "The gallery had been on a slow decline since June of this year." Upon returning from dismal sales at a Los Angeles art fair earlier this month, he notified the gallery's artists and began making arrangements to shut down.

The cost of doing business in River North was not a crucial factor in the collapse of Space. "It was actually cheaper to be there than where I had been in Bucktown," Fitz Gerald says. Though he'd built up a clientele, he says many of his regular customers had stopped buying. He also acknowledges that much of the work he liked and showed in his gallery was what he termed "inaccessible" to a large segment of the public. Still his prices, which averaged around $800, were very reasonable for the River North area.

The difficulties he encountered in trying to keep Space afloat have forced Fitz Gerald to rethink his view of the art market. "This is not a business for people who want to earn a living." He says many local dealers are keeping their galleries open with money from their own pockets. "You've got to spend some of your own money, but you can only do that for so long," he says. "Are there really any galleries out there that have been around awhile that aren't driven by the owner's own money?" Fitz Gerald says he was spending more of his time dealing with money matters than the art he wanted to sell and the artists he hoped to nurture. "That was the most frustrating thing about it all."

For now, he intends to do some teaching. He's accepted a full-time job as director of career services at the American Academy of Art, and he hopes to put together an occasional show on the side. "I'm keeping my hand in." Fitz Gerald says he hasn't ruled out the idea of opening another gallery sometime in the future. He'll be sending out cards to his former customers that say "See You Soon."

Art accompanying story in printed newspaper (not available in this archive): photo/Randy Tunnell.

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