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The nonprofit said it was unable to reach lease terms with its prospective landlord, Illinois video gambling mogul Rick Heidner.
His acclaimed novel was published when he was 30, and he'd been guiding young writers ever since. He collapsed during a softball game and died.
The company occupies 45,000 square feet at the Fillmore Center, a $40 million development project that will bring more businesses to North Lawndale and create more jobs.
Council members from the Southwest and Northwest sides, with wards dominated by single-family homes, said allowing homeowners to turn attics, basements and garages into revenue-generating "granny flats" could create problems.