Silver Award: Palmer House Hilton Hotel & Shops Chicago, Ill.

Chicago's Palmer House Hilton holds the record for the longest continuously operated hotel in North America. It was originally built in 1871 by Potter Palmer, one of America's first millionaire developers. When it was rebuilt after the Great Chicago Fire it became the first hotel in the U.S. to put a telephone in every room. It also pioneered the idea of putting retail shops in its arcade, and it was widely known for its luxurious ballrooms.

By 2005, however, the Palmer House was in need of significant capital improvements. Marketing studies came back with the same message: The hotel and its retail offering had to be drastically repositioned to meet the demands of today's traveler and consumer.

Although the Hilton Corporation had restored several ballrooms, many of the 14 guest-room floors had not been touched in over a decade, nor had there been any significant improvement to the building's infrastructure. The plumbing and mechanical chases had been in place since 1925. The exterior was in decent shape but old-fashioned fire escapes disfigured the prominent State Street façade.

Chicago architects Loebl Schlossman & Hackl called for 930 guest rooms to be remodeled along with 54 new suites supported by a new executive-level penthouse. Much more than a room remodeling project, the 1.2 million-sf, $170 million renovation included updating the building's retail frontage, restoring the lobbies, ballrooms, and public spaces, adding a new restaurant, club bar, and fitness center, and converting the lower level into an underground parking garage.

The Hilton Hotels Corporation, together with new owner, Thor Equities, naturally wanted to keep the doors open during the entire 26-month construction schedule—preferably at a minimum 85% occupancy. The owner/hospitality team coordinated its operations with general contractor Pepper Construction and interior architect ForrestPerkins to resolve hidden conditions, control noise, and keep the dust under control.

“The project was a Chicago landmark, which brings its own set of challenges,” said Lucien Lagrange, AIA, principal of Lucien Lagrange Architects, who has designed the renovations of such Chicago landmarks as the Carbon & Carbide Building (now the Hard Rock Hotel) and the Blackstone Hotel. —Jeffrey Yoders, Senior Associate Editor