Developer sues municipality over failed plans for “Purple Hotel” site

Lake Forest Real Estate Capital is suing the village of Lincolnwood, claiming it greased the skids so another firm could redevelop the site of the former “Purple Hotel.”

Tucker Development is moving ahead with its mixed-use project on the property at 4500 West Touhy Avenue that was once home to the Hyatt House Hotel better known for its distinctive color.

But in its lawsuit, Chicago-based Lake Forest claims it had talks with village officials about redeveloping the site as far back as 2016, and signed a contract to buy the property in 2017, according to Crain’s. The suit claims Village President Barry Bass, a real estate broker, interfered with the plans because of his three-decade friendship with Tucker CEO Richard Tucker.

The suit, filed in federal court in Chicago, seeks $25.5 million from the village and from Bass to make up for Lake Forest’s investment and estimated lost profits in the deal.

Lake Forest eventually shelved its plans for the property, and Tucker stepped in. Tucker wants to build a 220-key hotel and 300 luxury apartments, and develop 85,000 square feet of retail and restaurants on the 8.5-acre site. It bought the property last month from Toronto-based Romspen Investment for $10.7 million. [Crain’s] — John O’Brien