The Chicago Spire Project Is All But Dead

By Chuck Sudo in News on Nov 3, 2014 8:40PM

The hole in the ground that is the Chicago Spire site, seen in April 2010 during the collapse of the commercial real estate market. (Scott Olson/Getty Images photo)

The Chicago Spire skyscraper project, for years nothing more than a hole in the ground, became a very expensive burial plot after the developers behind the project failed to meet a court-ordered deadline to exit bankruptcy and pay off creditors.

Tom Murphy, attorney for developers Grant Kelleher, wrote to Deputy Mayor Steve Koch and Chicago Department of Planning and Development Commissioner Andrew Mooney that his client and partner Atlas Apartment Holdings could not secure a bridge loan to honor their outstanding debts and “without an extension, equally unlikely, the property will revert to” creditor Related Midwest LLC. Kelleher’s Shelbourne North Water Street and Atlas Apartment Holdings faced a 11:59 p.m. Oct. 31 deadline where they either had to pay Related $109 million or extend the deadline to March 31, 2015 with an immediate $22 million and increasing the creditor claim to $114 million. If those deadlines were not met, Related would take over ownership of the hole in the ground at 400 N. Lake Shore Drive.

Related Midwest acquired $93 million in debt from the Spire project from Ireland’s National Asset Management Agency and was challenging Kelleher’s bankruptcy plan in court. As the Tribune notes, that cost is a drop in the proverbial bucket compared to the value of the property. Related Midwest, part of New York billionaire Stephen Ross’ real estate portfolio, could develop the property or sell it to other interested developers.

As it stands, there won’t be a 2,000-foot tall building shaped like a drill bit joining the Chicago skyline anytime soon. Grant Park Conservancy president Bob O’Neill lamented on the apparent end of the Spire project to the Tribune.

"The Chicago Spire would have been a game-changer for Chicago's skyline and we would have had one of the most visible buildings in the world."