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CHICAGO-A 13-acre parcel that had been one of the city’s most underutilized pieces of real estate is beginning to take shape with the opening of a 455-suite, $400-million Embassy Suites Hotel at 511 N. Columbus Dr. Next, a 58-story, 620-unit condominium building is set to open later this year as the 2-million-sf River East Center begins to flesh out.

“I think (the hotel) is the biggest step in changing this neighborhood,” says MCL Cos. President and CEO Daniel E. McLean at Friday’s grand opening of the East Loop hotel, which his company owns but is operated by Hilton Hotels Corp., Embassy Suites’ parent.

In addition, the development will include retail space as well as a 21-screen movie theater. Total cost has risen to $2 billion, McLean says, since the plan for the former railroad property along the Chicago River, within walking distance of Navy Pier, was first conceived four years ago.

The River East project ultimately will add about 2,500 residential units to the area, McLean says, along with five acres of parks. With 282 units now sold, MCL hopes to hit the 50% mark in pre-sales by the end of the month, according to Tamara Laber, senior vice president of sales and marketing.

On the other side of the river, Lakeshore East Development Group is planning to build 4,850 units of condominium and apartment units on 28 acres at Randolph Street and Columbus Drive.

“This is a very important part of our city. It will be important for us to control this population,” says 42nd Ward Alderman Burton Natarus, who delivered the hotel’s liquor license from city hall 20 minutes before the ceremony.

The Embassy Suites Chicago Downtown-Lakefront is a milestone for the Hilton chain, which opened its 2,001st hotel in 2001. It gives Hilton 12 hotels in the Chicago area, including six under the Embassy Suites flag. It also is the second Embassy Suites Downtown, complementing a 358-suite property further west on State Street.

“We were truly under-represented in the Downtown market,” says Mark Snyder, senior vice president of brand marketing for Embassy Suites.

However, the hotel market is hardly as robust as it was even two years ago, when construction on the newest Embassy Suites began. “With the economy the way it is now, new supply will affect hotels,’ concedes Steve Jung, general manager of the hotel. “But we’re confident our customers will continue to prefer Embassy Suites.”

A relatively new Sheraton property is directly south of his hotel, and Starwood recently renovated a 556-room former Days Inn on Lake Shore Drive. Meanwhile, a new 311-room Le Meridien is open on Michigan Avenue, two blocks west. And Marriott and, reportedly, Baymont Inns, also have their eyes on River North sites. However, the East Loop location should work to Embassy Suites’ advantage, Jung says.

“For Embassy Suites, we’re really two hotels in one. We’re a good business hotel and a leisure hotel,” Jung says. Being within walking distance to Navy Pier, an increasingly popular tourist destination, should draw families to his hotel, Jung adds.

Room rates for the suites start at $169 to $189 a night, Jung says.

The importance of the tourism industry continues to grow, Natarus says, noting the hotel’s transportation service includes McCormick Place convention center as a destination.

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