Fern Hill is switching gears from hotel to multifamily in the historic Motor Row corridor, shedding light on how each commercial sector has fared post-pandemic.
Fern Hill, in partnership with Decennial Group and Rebel Hospitality, has proposed a two-building apartment complex with 256 units, at 2328 South Michigan Avenue, on Chicago’s Near South Side, Crain’s reported. The project carries an estimated construction cost of about $100 million, almost $391,000 per unit, and a timeline has not been established.
A venture led by Fern Hill president Nick Anderson bought the site for $6.3 million in January 2020, with plans for a “Motor Row Hotel” aimed at attracting visitors to local businesses and entertainment venues in the surrounding area. But then the pandemic hammered Chicago’s lodging industry, while high interest rates and tight lending exacerbated the challenge.
Chicago’s multifamily sector, meanwhile, is thriving amid steadily rising rents and demand. So the developers went back to the drawing board to sculpt a project that’s more promising and financially viable.
The proposal aligns with Chicago’s Connected Communities Ordinance, enacted in 2022, allowing denser developments near public transit stations. Twenty-five percent of the units will be designated as affordable housing, and a “parking swap” will prioritize space for residences over cars.
It is the first development specifically proposed ot meet the ordinance, Anderson told the outlet.
Pending City Council approval, the development will comprise two buildings: a seven-story, 98-unit structure facing South Michigan Avenue, and an 18-story building behind it with 158 units.
Despite the 18-story building’s height exceeding that of those nearby, such as the tri-brand Hilton hotel and Aspire Residences apartment tower, the developers aim to integrate it seamlessly into the surrounding urban landscape.
—Quinn Donoghue
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