CHICAGO

Olympic Plans Hit Snag

10/25/2008 05:12 am ET | Updated May 25, 2011

Faced with soaring demolition and environmental cleanup costs and a recalcitrant property owner, the Daley administration has broken off talks aimed at moving the $1.1 billion Olympic Village to the campus of Michael Reese Hospital.

Mayor Daley wanted to roll the dice that a depressed real estate market would come roaring back -- by borrowing $85 million to finance the hospital purchase and sell it to a private developer.

His original plan called for Medline Industries, which owns the 37-acre site, to make a "charitable contribution" of $20 million that was supposed to be enough to cover demolition, environmental cleanup and five years of interest payments on the loan at a rate of 5 percent.

Instead, demolition and cleanup costs were projected at $32 million. Chicago 2016 Chairman Pat Ryan tried to salvage the deal by renegotiating the purchase price, but Medline apparently wouldn't budge.

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