Thursday 23 January 2020

Chicago Spire company in bankruptcy courts

The planned Chicago Spire
The planned Chicago Spire
Work on the 76 foot deep foundations which are know locally as 'The Bathtub'

Michael Bathon

THE owner of 2.2 acres that was the planned site for the Chicago Spire, the stalled project billed as the Western Hemisphere's would-be tallest building, is being dragged into bankruptcy court by creditors, collectively owed more than $82m (€64m).

RMW Acquisition, with a claim of about $69.5m; RMW CLP Acquisitions with a claim of about $10.5m; Thornton Tomasetti, with about $1.6m in claims; and Cosentini Associates, claiming more than $770,000, filed an involuntary Chapter 11 petition seeking to force Shelbourne North Water Street into bankruptcy.

The Chicago Spire was a 2,000ft-tall dream of Irish developer Garrett Kelleher and Spanish architect Santiago Calatrava near the delta of the Chicago River and Lake Michigan.

The proposed 150-storey helix-shaped residential project has never progressed past a hole in the ground after it was halted in 2008 due to the real estate collapse during the recession.

Shelbourne borrowed $54.5m from Anglo Irish Bank in 2006 to purchase the property, which was subsequently increased to $69.5m in 2008, court papers showed.

The developer defaulted on the loan when it came due in October 2009 and negotiated a forbearance agreement with its lender. The lender was owed about $74.5m including fees and interest at the time of the 2010 forbearance.

Today the site is referred to locally as "The Bathtub", with the 76ft deep hole for foundations the only sign of construction.

RMW Acquisition, an affiliate of billionaire Stephen Ross's real estate development company Related Companies, acquired the loan in June from National Asset Loan Management Ltd, which was appointed to liquidate Anglo Irish Bank, according to court documents.

Petition

The loan wasn't "acquired by RMW for the purpose of filing the petition and initiating an involuntary bankruptcy against the alleged debtor", Richard O'Toole, an executive vice-president of Related Companies, said in a court filing.

RMW intends "to file, fund and seek confirmation of a plan of reorganisation" for Shelbourne "for the benefit of the creditors of the estate", Mr O'Toole added.

Mr Kelleher is believed to have tried to buy back the loan from NAMA when they began trying to sell it last March.

While the expectations are that the Spire in its original format will not be constructed by whoever gains control of the loans, there is the possibility that a scaled-down tower could be built. The site has planning permission for 1,200 apartments.

Mr Kelleher was a significant developer in Ireland during the last decade.

In 2011, receivers were appointed by Bank of Scotland (Ireland) to some properties owned by Mr Kelleher's Shelbourne Development. They included two office blocks on St Stephen's Green in Dublin, which had about €200m of loans attached to them. (Bloomberg)

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