NAMA selling massive hole in ground for $92.8m
THE National Asset Management Agency (NAMA) is set to sell a prime parcel of Chicago property that was the site of an ill-fated project to build North America's tallest residential building.
NAMA is selling a bad loan made to Dublin-based Shelbourne Development Group, which has dug an enormous hole to build the foundations of the planned Chicago Spire.
The loan, with a balance of $92.8m (€71.2m), comes with the right to develop the 2.18-acre site on the bank of the Chicago River in downtown Chicago, a source told Reuters.
The site, which is in one of Chicago's most expensive neighbourhoods, could support a $1bn project, the source said.
The Chicago Spire, which was envisioned to have 150 storeys, was designed by celebrity architect Santiago Calatrava.
But Shelbourne saw the project run into financial trouble during the credit crisis and defaulted on the loan in 2010.
Anglo Irish Bank, which financed the deal, was left with the bad loan that was secured by the property.
The property, whose official address is 400 North Lake Shore Drive, offers unobstructed views of Lake Michigan. So far, much of the foundation and perimeter walls have been completed but little else.
It is unlikely that a new buyer would resurrect the same project, the source said. But the site permits development for 1,200 apartments. The site could support two or three buildings for 2.3 million square feet.
First-round bids are due in April. Likely buyers of the loan – which would entitle the owner to the site – would include investment funds, off-shore investors, real-estate investment trusts or a combination of investors and developers, the source said.
Jones Lang LaSalle Inc is marketing the loan. This could mark the third attempt in less than a decade to build a residential building at the site. Christopher Carley, chief executive of Chicago condominium developer the Fordham Co, originally proposed the tower, then known as the Fordham Tower, in 2005 but failed to obtain the needed financing.
In 2006, Garrett Kelleher, executive chairman of Shelbourne, and owner of the St Patrick's football club, took over the project, obtaining $69.5m development and construction financing from Anglo.
Penalties and added interest have increased the face value of the loan.