Sage Breathes New Life into Chicago Blackstone Hotel

$112 mil Partnership between Sage Hospitality and the City of Chicago to Preserve and Renovate Natio

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. October 14, 2008

CHICAGO, IL, April 11, 2006. A prominent Chicago architectural icon, the former Blackstone Hotel, once a symbol of economic progress and civic pride that was celebrated as the "Hotel of Presidents" and played host to countless celebrities including Katharine Hepburn, Tennessee Williams and Paul Newman, will be renovated by Sage Hospitality Resources into a 330-room luxury Renaissance hotel. The $112 million restoration of the long dormant Blackstone, located at 636 S. Michigan Avenue in the heart of the City's arts and theater district -adjacent to the world class Millennium Park, represents yet another significant development milestone in the renaissance of Chicago's South Loop downtown neighborhood. Opening of the Blackstone Renaissance Hotel is slated for fall of 2007, on the eve of the Blackstone's 100th anniversary. Construction is now underway.

The redeveloped Blackstone Renaissance will feature 330 guest-rooms, over 12,000 square feet of ballroom and meeting space, a signature destination restaurant with sweeping vistas of Grant Park and a street level lounge and outdoor caf'e. James McHugh Construction Company was named general contractor and Lucien Lagrange is the architect for the renovation. Sage Hospitality will develop and manage the hotel.

The renovation of the Blackstone Hotel is the result of a unified and creative effort that includes a Tax Incremental Finance (TIF) agreement from the City of Chicago, as well as Historic Preservation Tax Credits and New Market Tax Credits from the federal government. JP Morgan Chase Bank and Sage Hospitality Resources are the equity investors for the Blackstone redevelopment. Prudential Insurance Company of America is the project lender.

The investment in converting the historic Blackstone into a luxury hotel will create a significant economic impact producing more than $75 million in tax revenues over a 10-year period. About 300 construction jobs for a variety of skilled trades will be generated during the renovation of the facility. The operation of the hotel will also add 160 full-time equivalent permanent jobs to the local economy.

The Blackstone Hotel is listed on the National Register of Historic Places. In order to preserve its architectural integrity, the Blackstone Hotel will be renovated as a "certified historic rehabilitation" in accordance with preservation guidelines established by the Secretary of the Interior's Standards for Rehabilitation and Illustrated Guidelines for Rehabilitating Historic Buildings.

Whenever possible, the Blackstone's significant historic and architectural elements will be preserved, refurbished and incorporated in the renovation design. The primary historic facades of the 22-story Blackstone will be fully retained and restored including the hotel's ornate terra cotta cladding that embellishes the hotel's exterior.

Gettys Group will serve as the interior designer for the new hotel. Some highlights of the Blackstone's interior features to be preserved and restored by Sage Hospitality include:

o The main lobby, including the stairs from the lobby to the second level and the stairs between the lobby and the Balbo Street entrance, fireplace, plaster ornamentation, registration desk and mahogany embellishment.

o The original grand ballroom, called the Crystal Ballroom and its fourth floor lobby including plaster restoration.

o The marble-clad barbershop located in the club level.

o The Art Hall and English Room located on the fifth floor.

o The southeast corner suite on the ninth floor from which derives the expression the "Smoke-filled Room," and is also believed to have been known as the "Governor's Suite", where Warren G. Harding was chosen as the Republican Party's presidential nominee amid clouds of cigar smoke; and

o The southeast corner suite on the tenth floor known as the "Presidential Suite."

As part of the Blackstone renovation, Sage Hospitality Resources will sensitively redesign all the guest room floors to reconfigure and dramatically enlarge the hotel's rooms. A previously unfinished space under the porthole-accented mansard roof will be transformed into a series of luxury suites overlooking Lake Michigan.