LINCOLNWOOD, Ill. (CBS) -- Demolition and redevelopment are one step closer for a long-vacant Lincolnwood Hotel with a colorful exterior and a seedy history.
The Purple Hotel, at 4500 W. Touhy Ave. in Lincolnwood, has been closed since 2007. Plans to have the hotel demolished go back three years, but a $27 million deal to sell the hotel and have the land redeveloped fell through when the real estate market went downhill in 2008, according to published reports.
The hotel has been deteriorating ever since, and earlier this year, the Village of Lincolnwood won a court order to have it torn down. But the hotel still stands for now.
Now, in another step toward the redevelopment of the property, Tucker Development Corp. has acquired the unpaid mortgage loans on the property, and thus may be able to take over the land and build a new development, Crain's Chicago Business reported in a Wednesday article.
Tucker Development is expected to build a new retail development combined with residential or hotel space on the site, located at the high-profile intersection of Touhy and Lincoln avenues, according to Crain's.
The 293-room hotel opened as the Lincolnwood Hyatt House in 1960. Legend has it that the blue bricks were supposed to be used for the exterior, but due to either a miscommunication or a manufacturing error, construction crews ended up with purple bricks instead, according to the Web site American Urbex.
The Chicago Tribune says Barry Manilow, Roberta Flack and Perry Como were among the guests at the hotel over the years.
The hotel was known for two high-end restaurants, named Tessy's and T.J. Peppercorn's, live performances, and what one pianist told the Chicago Tribune was the "greatest" pool.
But for many Chicagoans, the hotel is best known as the site of a high-profile gangland murder.
Allen Dorfman, a Teamsters Union consultant and reputed mob associate, was gunned down in the parking lot of the hotel on Jan. 20, 1983. Authorities believe Dorfman was the victim of a mob hit to keep him from cooperating with prosecutors as he awaited sentencing for trying to bribe a U.S. Senator.
The hotel was known for seamy affairs in more recent years too. In the corruption trials of political fundraiser Antoin "Tony" Rezko, and more recently powerbroker William Cellini, businessman and admitted scam artist Stuart Levine testified that he attended all-night sex parties loaded with drugs such as crystal meth and ketamine at the hotel.
The hotel was also known for hosting such events as the Midwest Fetish Fair & Marketplace, American Urbex reported.
In the 1990s, the hotel changed banners from Hyatt to Radisson, and later Ramada, before simply becoming "the Purple Hotel" in 2004, according to American Urbex.
The hotel was shut down in January 2007, after owner Donald Bae was taken to court over health code violations when mold was found in 208 rooms, the Tribune reported.
American Urbex showed the ruins of the hotel in an article earlier this year. It showed an outdoor pool full of brown floating algae from end to end, with a piece of plastic patio furniture floating on top. A stack of furniture, dead plants and glass shards filled the dry indoor pool on the others side of a row of glass doors.
The Village of Lincolnwood still plans to demolish the hotel, but would step aside to allow a developer to do after buying it, Crain's reports.
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