Judge Approves Chicago Spire Bankruptcy Exit Plan

By Chuck Sudo in News on Oct 7, 2014 6:30PM

Developer Garrett Kelleher’s ongoing attempt to resurrect the Chicago Spire skyscraper project received a boost Tuesday when a new investor was revealed during confirmation hearings.

A commitment letter from New York-based Stonbeck Capital LLC was presented during the meeting, promising to provide a loan that would allow Kelleher’s Shelbourne North Water Street and Kelleher’s other partner, Atlas Apartment Holdings, to pay off the long-stalled project’s creditor and exit Chapter 11 bankruptcy. U.S. Bankruptcy Court Judge Janet Baer approved the plan.

Shelbourne now faces an Oct. 31 deadline to pay off its primary creditor, local real estate developer Related Midwest LLC. Kelleher, through a separate venture, owes Related Midwest $109 million if he wants to keep the property at 400 N. Lake Shore Drive. But that deadline can be extended to March 31, 2015 if Kelleher agrees to pay $22 million immediately and increasing the creditor claim to $114 million.

Atlas agreed in February to provide up to $135 million in financing to pay off Shelbourne’s creditors. And there are many, including architect Santiago Calatrava who claims he’s owed $11.4 million for work done on the project.

If the project is untracked, the Spire’s corkscrew design would extend 2,000 feet into the sky, 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, and went into foreclosure two years later. To this date, the project remains a giant hole in the ground waiting to be filled.

Stonebeck’s participation will depend on an appraisal of the property and other determining factors.