Chicago Spire Gets New Jumpstart ! Long-delayed plans to build a 2,000-foot skyscraper in Streeterville are back on now that the developer of the stalled project has found a partner willing to provide financing.
Long-delayed plans to build a 2,000-foot skyscraper in Streeterville are back on now that the developer of the stalled project has found a partner willing to provide up to $135 million in financing.
The developer of the Chicago Spire, Shelbourne North Water Street LP, says the newly acquired financing will go to pay off creditors and complete the company’s reorganization.
Shelbourne, an entity controlled by real estate developer Garrett Kelleher, says in court documents that Atlas Apartment Holdings LLC agreed to provide the financing. (Read the document below.)Shelbourne has asked the U.S. Bankruptcy Court for the Northern District of Illinois to approve the agreement.
The deal would pave the way for the developer to seek construction financing to resume the project, a 150-story condominium tower.
“We’re in a position to reopen negotiations” with potential funding sources, said Tom Murphy, Chicago-based lawyer for Shelbourne.
The same tower is planned, Mr. Murphy said. “We think of it as the highest and best use” for the site. He also noted that the plans have been “fully vetted” and approved.
The 2.2-acre Spire site, along Lake Shore Drive at the Chicago River, has been tangled in litigation since Mr. Kelleher’s previous plan to build a 2,000-foot-high skyscraper was foiled by the condo crash and real estate downturn.
There is a giant hole in the ground at the property that would have served as the foundation for the proposed skyscraper, but little else.
“Given the ongoing recovery in the Chicago property market, the timing is better now than when this project commenced,” Mr. Kelleher said in the statement. “I am delighted to have found a partner who believes in the project as passionately as I do.”
Atlas CEO Steven Ivankovich signaled that his company backs the idea of building according to the original Spire plan. “This is a building that deserves to be built and built in Chicago,” he said in a statement. “Atlas is committed to making this happen.”
New York-based Related Cos. acquired about $80 million in delinquent debt on the property last summer, and then filed an involuntary Chapter 11 petition last year.
“Our plan is to pay off everybody who’s entitled to be paid off,” Atlas’ Mr. Ivankovich said in an interview with Crain’s, referring to the creditors in the bankruptcy case, including Related.
“I think it’s very simple. We’re supporting the borrowing and they have the right to pay everybody off,” he added. “From that point of view, unless there’s a dispute over the payment amount I don’t necessarily see any challenges.”
Mr. Ivankovich estimated that creditors are owed about $115 million; the remaining $20 million would go toward recapitalizing Mr. Kelleher’s entity.
A Related spokeswoman in New York did not return a call this morning seeking comment.
The Chicago Tribune reported the financing news earlier this morning.
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Source : Crains