Chicago Spire Developer Wants To Re-Start Project With New Funding Secured

By Chuck Sudo in News on Feb 7, 2014 8:35PM

The Chicago Spire skyscraper project, stalled for years because a litany of creditors have demanded money the claim are owed them by the developer of the building, may become reality after the owner of the site found an investor to pay off its debts.

Atlas Apartment Holdings LLC agreed to invest $135 million to finance a plan allowing Shelbourne North Water Street LP, which owns the site at 400 N. Lake Shore Drive, to exit bankruptcy and fully pay off its debts. Irish developer Garrett Kelleher said of the deal, “I am delighted to have found a partner who believes in the project as passionately as I do.” Atlas chief executive officer Steven Ivankovich added, “Atlas is committed to making this happen.”

If built, architect Santiago Calatrava’s corkscrew design for the Spire would extend 2,000 feet in the air, making it the tallest building in North America. The 150-story residential project stalled in 2008 as the Great Recession sent real estate prices plummeting and Shelbourne’s debts mounted. The project, which is still a hole in the ground, went into foreclosure two years later.

The agreement between Shelbourne and Atlas will allow Shelbourne to honor all legitimate claims by creditors against them, including one from Calatrava that he’s owed $11.34 million in work done on the project. But it doesn’t detail how they would fund the project moving forward. Commercial developer Related Midwest bought the debt on the Spire at a discount last summer and filed a lawsuit against Kelleher last November seeking $95 in guarantees he made on the project.

Shelbourne also asked the court to approve $4.8 million in breakup and expense reimbursement fees for Atlas that would be owed if the isn’t approved by the court by Aug. 31, implemented by Oct. 31, or if Shelbourne enters into another agreement for the Spire.