The Monroe Street entrance will be redesigned, fire escapes on the State Street side of the hotel will be replaced with interior fire escapes and storefronts on the Monroe and State street sides will be renovated. An indoor parking garage also is being created. One major interior renovation is creating a 4,000-sf penthouse at a cost of $9 million, according to company officials.

"The Palmer House needs to be competitive, and our new owner's exciting and innovative plans over the next three years will return the Palmer House to its rightful place as one of the world's great hotels, and most assuredly one of the top hotels in Chicago," says Palmer House Hilton general manager J. Peter Lynn. He adds the Palmer House renovations are coming as plans for new hotels are being announced, in addition to renovations at other Downtown hotels.

The sale by Hilton Hotels Corp. last year set a high-water market in the Downtown market. However, this year has seen DiamondRock Hospitality Co. pay $295 million for the Chicago Marriott Downtown and LaSalle Hotel Properties acquire the Westin Michigan Avenue for $214.7 million.