After running afoul of his lenders a few years ago, the owner of the Hilton/Chicago Northbrook now faces a public shaming from a group that may be even less forgiving: government officials.
The hotel attracted unwelcome publicity and strong criticism yesterday after news broke that it hosted a large, and mostly maskless, wedding Wednesday night, violating state COVID-19 restrictions, according to health officials. Calling the event “very irresponsible,” Gov. J.B. Pritzker said the hotel “breached the rules” and “should be held responsible.” The hotel issued a statement of apology.
The wedding represents a big misstep for the Allgauer family, which has owned the property for nearly a half century and occupies a prominent place in the Northbrook business community. In 2018, the Northbrook Chamber of Commerce named the Hilton as its Corporate Citizen of the Year “for promoting a spirit of giving and community involvement,” according to an announcement on the chamber’s website.
What the statement didn’t mention was the $23 million foreclosure suit filed against the hotel less than eight months earlier. A venture led by Frank Allgauer that owns the hotel defaulted on its mortgage by failing to make required loan payments, according to the lawsuit.
It looked like Allgauer would lose the 249-room hotel at 2855 N. Milwaukee Ave. unless he could find some rescue capital. The Hilton had failed to generate enough cash flow to cover its debt payments, and it was appraised at just $16.9 million in 2016, well below what Allgauer owed on it.
But Allgauer promised at the time that he would resolve the problem by lining up new financing. He was right: The Ardent Cos., an Atlanta-based real estate investment firm, bought the loan on the property in the summer of 2017, according to Cook County property records.
Ardent and the Allgauer venture worked out a forbearance agreement—essentially a pact under which a lender agrees not to foreclose—and Ardent loaned the hotel another $3.3 million, county records show. It’s unclear whether Ardent also holds an ownership stake in the hotel. An Ardent executive did not immediately return a call.
The Hilton’s comeback seemed well underway in July 2019, when it completed the first phase of a multimillion-dollar renovation. But the coronavirus pandemic has been merciless toward hotels across the country, which have suffered from a plunge in business and leisure travel. Bookings of big meetings and group events—like weddings—have evaporated as well, something the Hilton acknowledged in its public apology.
“The coronavirus pandemic has created unprecedented challenges for the hospitality industry and our family-owned business,” Holly Allgauer-Cir, the hotel’s general manager and Frank Allgauer’s daughter, said in the statement. “However, our hope to keep the hotel afloat and employees working should not outweigh health and safety.”
Frank Allgauer did not respond to an interview request made through a spokesman. Allgauer took over the business from his father, who opened a restaurant and banquet facility called Allgauer’s on the property in 1974, according to the Northbrook Chamber. Allgauer opened a hotel on the site, Allgauer’s Hotel, in 1984, expanded it in 1988 and later converted it to a Hilton.
Allgauer also owned a 309-room Hilton in Lisle, but lost the property after a lender filed a $37 million foreclosure suit against it in 2016.
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