Michael Collier’s hotel-turned-homeless shelter near Chicago’s Magnificent Mile is keeping his firm’s creditors at bay with a bankruptcy.
Collier’s company Hotel Capital filed for bankruptcy on the former Selina Hotel, at 100 East Chestnut Street, blocking a lender’s foreclosure action, Crain’s reported.
A subsidiary of Chicago-based LaSalle Investment Management filed a $25 million foreclosure lawsuit against Hotel Capital in September, claiming the firm defaulted on its mortgage for the 16-story building. That lawsuit will be put on hold until the bankruptcy case is resolved.
Hotel Capital owes $19.5 million to the LaSalle Investment Management entity, its largest creditor. The landlord reported its assets as between $10 million and $50 million.
The firm bought the former 122-key hotel for $22.5 million in 2018, when it was known as the Tremont Chicago. The hotel closed after the onset of the pandemic in 2020, and the following year, Hotel Capital leased it to youth hostel operator Selina Hospitality.
Michael Collier, CEO of Hotel Capital, told The Real Deal in September that Selina owed the firm millions of dollars in rent. London-based Selina denied that and said Hotel Capital broke its lease obligations regarding the condition of the property.
Hotel Capital took back control of the building in December, Collier told the outlet. And it found a tenant in the city of Chicago, which converted it to a temporary homeless shelter amid the wave of migrant arrivals from the southern border and winter weather putting a strain on other shelter spaces.
The firm has “stabilized the hotel” and is “working hard to maximize creditor outcomes long-term,” Collier told the publication. “I am happy that we can continue the sheltering contract to help vulnerable Chicagoans as we execute on that plan,” he said.
While the city had a contract to house up to 116 people at a time for seven months, Collier declined to comment specifically on the contract, and it’s unclear whether the city will extend it.
—Rachel Stone
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