The Army Laughs Last

When the U.S. Army suddenly decided to sell Chicago's huge Stevens Hotel last June (TIME, June 28), the joke was on the Army. Reasons: 1) only six months before, the Army had shelled out $6,000,000 to buy the Stevens for an Air Forces training school; 2) only three months before, it had auctioned off some $2,000,000 worth of irreplaceable furnishings for less than $500,000 in cash.

Stripped of much of its finery, the Stevens looked like even more of a white elephant than it had been in the plush-furnished days when its private owners could earn nothing on their $28,000,000 original investment. People talked about turning it into an office building, a free home for soldiers' wives, a low-cost hotel.

This week the Army had the last laugh. From five bids for the Stevens it chose to take $5,251,000 cash on the barrelhead from Arnold Kirkaby, who already owns Chicago's Drake and Blackstone Hotels.

This was the highest cash bid,* although the Illinois Institute of Technology had offered $5,500,000 in cash and long-term notes. And it was only $307,000 less than the Stevens' net cost to the Army in the first place. To rent the hotel would have cost over $1,000,000 (including some $300,000 for restoration).

Thus the Army made a neat profit of almost $700,000 on its white elephant. Except for Winner Kirkaby, who said the Stevens would be doing business in 60 days, Chicago hotelmen were not so happy. They remembered a sad Chicago maxim: nobody makes money in the hotel business when "the world's biggest hotel" (3,000 rooms) is taking in roomers.

*Except for an offer of "$1,000 more than the highest," from Paul E. Schimmelpfennig, of Milwaukee, which was thrown out for lack of earnest money.

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