More Problems For the Spire

By Marcus Gilmer in News on Dec 26, 2008 8:20PM

No, we're not a broken record: the Chicago Spire project has once again run into problems. Despite being able to sell the two-story penthouse, money woes have impacted the Spire such that earlier this fall construction on the building was halted. Now comes word that the world's economic crisis may have an even bigger impact than previously thought. The new problem involves the bank crisis in Ireland where Anglo Irish Bank Corp. is about to be nationalized to avoid collapse. Anglo Irish Bank happens to be the main lender for the Spire's developer, Garrett Kelleher, executive chairman of Shelbourne Development Ltd.

[Kelleher] used private funding assurances from Anglo Irish to persuade Mayor Daley's administration to grant zoning approval for the project in 2007. Kelleher had said Anglo Irish's com- mitment was almost open-ended and required no threshold of condominium sales before it would underwrite construction.

Property records show Shelbourne has drawn $69.5 million from Anglo Irish for the early stages of construction at 400 N. Lake Shore Drive. But work has been stopped, and Shelbourne has been hit with several liens from contractors -- including one from his own celebrity architect, Santiago Calatrava. Though the building has been marketed almost as a Calatrava artwork, the architect alleges Kelleher owes him $11.34 million.

Sources said Kelleher has been seeking other investors, either in debt or equity positions, to help get construction restarted. But the world's financial crisis has dried up the supply of money looking for speculative investments.

We wonder if anyone wants to revise the promise the Spire will be finished by 2012 come hell, high water, or economic collapse.