Revival plans turn to dust
Demolition underway after costly effort to refurbish Harvey hotel
Readers might hold different views about the ongoing demolition of the former Harvey Chicago Park Hotel northwest of the Halsted Street interchange with Interstate 294 in Harvey.
Some may take a nostalgic look back as far as the 1960s, when the four-story hotel was built. Through the decades, couples dined in hotel restaurants, civic groups hosted prominent speakers, congregations met for worship services and teens gathered to hear bands perform at a juice bar in the hotel.
At one time, growers sold fresh produce under tents at a weekly farmers market in the hotel parking lot.
Others may look at heavy equipment tearing down the former hotel’s concrete floors and see the demise of one of the Southland’s biggest boondoggles. Harvey taxpayers are on the hook for millions of dollars because of a failed effort to refurbish the property.
Some might see the structure as a symbol of municipal waste and corruption. They may observe trucks hauling away debris and rubble and think, “Good riddance.”
Others could view the clearing of a prime piece of real estate as a sign of economic revitalization, one that could herald the return of the property productively contributing to local tax rolls.
“We’ve seen a significant reduction over the years in tax collections related to properties like that hotel,” said Nicole Terrell-Smith, director of business services for Hazel Crest School District 152 1⁄2.
Tax records show the elementary school district would have been the biggest beneficiary of revenue if taxes had been paid on the commercial property. But millions of dollars in taxes haven’t been paid on the property for at least the past five years, records show.
Other public entities that have each lost hundreds of thousands of dollars in annual revenue because of nonpayment of property taxes are Thornton Township High School District 205, South Suburban College District 510 and the city of Harvey. The Harvey Public Library District, the Harvey Park District and others have missed out on tens of thousands of dollars in annual revenue.
Records list two separate property identification numbers for the hotel site at 17040 S. Halsted St. The second installment of 2017 taxes due Sept. 1 is for $760,979 for one parcel and $488,323 for the other for a combined bill of more than $1.2 million, according to the Cook County treasurer’s office.
Taxes for the property remain outstanding for 2016, and delinquent taxes for 2014 and 2015 were forfeited, according to the treasurer’s office.
Assessments for the property have varied in recent years, according to Cook County assessor records. The 2018
value of one of the parcels is $568,000. The same parcel was assessed at $203,135 in 2012. A proposed 2008 assessment of $852,272 was reduced on appeal to $319,966, records show.
The Cook County Land Bank Authority acquired the property late last year, according to records with the Cook County recorder of deeds. The county created the authority five years ago as a mechanism to redevelop abandoned and foreclosed properties. Most of the authority’s transactions have involved residential parcels.
In January, the authority invited contractors to submit bids to demolish the hotel structure. Prior to demolition, a contractor inspected the vacant 75,000square-foot hotel and submitted an 18-page report about asbestos removal.
“At the time of this inspection, this property had most of the furnishings removed,” the inspector wrote. “There is a basement which was inaccessible due to water that was up to the ceiling.”
As recently as 2011, the Illinois State Toll Highway Authority listed the Harvey Chicago Park Hotel in a published guide of lodging and attractions along the Tri-State Tollway. The city of Harvey still lists the venue as one of four hotels on a “visitor information” page on the city’s website.
One can find reviews on Yelp of services at the Park Inn Diner and the Flamingo Retro Gentlemen’s Club that listed the same address as the hotel. In 1994, a Thornton Fractional North High School student wrote a newspaper article about attending a revue of local bands that performed at Jubilation, a juice bar at the hotel.
In 2008, the city began borrowing money and working with a developer who planned to rehabilitate the hotel. The Chicago Tribune cited affidavits and other court documents in extensive reports about an FBI investigation into the development deal.
“Very little” of the $11 million in funds borrowed for the project appears to have been spent on construction, the FBI said in documents. The Tribune said in 2016 the city funneled the money to a developer “to supposedly turn a dilapidated truckers motel beside a strip club into a Holiday Inn with a regional conference center.”
“Instead, the money — borrowed on the backs of taxpayers there from 2008 through 2010 — largely went into a black hole of accountability, with the hotel to this day left half-gutted and Harvey residents on the hook to make loan payments of more than $20 million, with little to no record of exactly where it went,” the Tribune wrote.
In 2016, a central figure in the investigation committed suicide. Joseph Letke, 57, was a bookkeeper for several south suburbs. The Tribune, citing court documents, reported Letke collected $800,000 in fees from the deal that prosecutors labeled a “scheme” and “fiasco.”
The hotel deal also prompted federal civil lawsuits. Harvey Mayor Eric Kellogg agreed in 2016 to pay $10,000 and be barred from ever again participating in a municipal borrowing deal, the Tribune reported.
The developer, Satish “Sunny” Gabhawala, denied any wrongdoing. His attorney, Steven Miller, told the Tribune in 2016 that Gabhawala was a victim of the scheme in which Letke and the city of Harvey siphoned off the borrowed money.
Representatives of the Cook County Land Bank Authority and the city of Harvey did not immediately respond to messages I left requesting comment and more information about the demolition of the hotel. Future plans for the site have not been publicly announced.
Ten years ago, the redevelopment proposal offered hope and a promise to return the hotel to some of its former glory as a centerpiece of civic engagement. A computer-generated rendering showed the exterior of the proposed Holiday Inn Hotel & Suites Chicago Southland decorated in lime-green and salmon-pink colors.
Millions of dollars in public funds intended to redevelop the hotel seem to have vanished into thin air. Instead of luring visitors to an attractive hotel and conference center, the structure is being reduced to rubble.
“Fill material shall be free of rocks or lumps larger than three (3) inches in greatest dimension,” the Cook County Land Bank Authority said in its request for proposals for demolition services. “Pulverized building materials shall not be used as fill material.”