CHICAGO | Chicago Spire | 610 M / 2,000 FT | 150 FLOORS | NEVER BUILT

[jcchii]

At least we did get some great density and some tremendous buildings out of the boom, most notably the river canyon (spire excluded)

and we have 444 w Lake and 161 w kinzie still on line through there.

Trump went up, and Aqua, OMP and other skyline changers. This would have been the capper, so hopefully it will recover in some form.

Have to put that likelihood under 20 percent, I would say

[honte]

Today's coverage in the Sun-Times: http://www.suntimes.com/business/122...pire18.article

And the coverage in the Tribune: http://www.chicagotribune.com/busine...,7369971.story

Nothing we didn't already know, but it's more positive-sounding than we've been here on the forum.

[wrab]

Originally Posted by denizen467

Technically, do we (and Shelbourne) care if the architects stop working for a couple months? .....
In the Crain's article -

Problem is, Kelleher has been marketing the heck out of the Calatrava connection - it is the defining aspect of the project along with height and is the most conspicuous aspect of the ad campaign. "Calatrava" is the designer name-tag that turns the $50 shirt into a $500 dollar shirt.

[Dirt Lawyer]

Originally Posted by Beck4ABigChicago

dirtlaw,

What do you make of:

a) the sum of the liens (about 15mil)>
b) the statement that the 15mil recently advanced by anglo irish will not be used to pay for prior debt?

My limited legal experience in VC makes me feel like this might be either a move merely to protect or a little tiff (especially point 2). As you probably well know, if a lender is advancing money it will never be, with very limited exceptions, to pay prior debts.

Makes me wonder what exactly is going on here. I'm not sure things are exactly as they seem here, but I may be wrong. Is GK maybe positioning himself to do something here.....I hate to venture what exactly, but taken individually, this almost smells like a $$$ dispute more than anything...although, the fact that two firms are liening up is interesting.

Anyhow, someone should go out and see who/how many lien against Trumps properties which were ultimately completed.

$15 million is not super-offensive for a project of this size. The fact that they filed liens means little to me; when a project stops, in order to preserve your rights against the property (as opposed to just the developer) you have to file a lien within x (in this case 90, as I recall) days after the last date material work was performed on the project. The architects would be foolish not to file a lien.

It seems to me, based on what I'm reading and your input, that the parties are lining up for an eventual settlement so people can move forward should conditions merit. And a lender's not going to advance more money if this baby's d-e-a-d.

Trump, IIRC, is legendary for his disputes with contractors. Makes me glad I have never worked with or against him. (It almost happened once....whew!)

[SNT1]

meh.

At least it's not a bare concrete stump like Waterview.

So, even this "genius" Kelleher couldn't deliver.

Enjoy your Trump Chicago: your only new supertall.

[honte]

One piece of bad news and you guys are ready to write the whole development off? Give me a break.

The sales center is still open. The developer claims he wants to correct the situation. The building is 1/3 sold at price points heretofore unseen, and in a bad market to boot. Kelleher is still a very bright and bold businessman who, for all we know, remains committed to his vision and project.

The market fundamentals have changed, but I don't think it's dead at all. This depends on how long Kelleher can hold on, how long the buyers hold on, and how long the markets suffer. Am I holding my breath? No, but I learned that lesson long ago.

[denizen467]

Maybe Calatrava has already telegraphed us all some wisdom and optimism on this:

Originally Posted by Chicago3rd

Calatrava stops work on Spire, files lien
By Eddie Baeb, Oct. 17, 2008
http://www.chicagorealestatedaily.com

(Crain’s) — Renowned Spanish architect Santiago Calatrava has stopped working on the Chicago Spire ...

... Perkins & Will also filed a lien Oct. 8 against ... Mr. Calatrava’s venture, Festina Lente (IL) Ltd. ...

From www.webster.com:

"festina lente"
meaning: make haste slowly
origin: latin

[zachary78]

This is an article you may want to read.
Chicago Spire Architect Files Lien Against Developer

Let us hear your
comments!
October 18, 2008 - It seems as though the current economic turmoil and housing market slump aren’t the only difficulties that Shelbourne Development’s Chicago Spire is facing. Project spokespersons had already acknowledged that work would be suspended until the market improved, although utility work would continue, and the sale of the penthouse suite last month seemed to be a boost. But now architect Santiago Calatrava and architectural company Perkins and Will have filed liens against the developer for unpaid fees, according to Crain’s.

Calatrava says he is no longer working on the Spire project and the amount he claims he is owed by Shelbourne is $11.34 million. Perkins and Will claim another $4.85 million. A spokesperson for Shelbourne was quoted in the article as saying they will dispute the liens on the grounds that the $11.34 million isn’t a correct figure for the work Calatrava did.

Crain’s reports that another $15 million was borrowed by Shelbourne Development last month from the Anglo Irish Bank, but that money wasn’t earmarked for architect’s fees. A total of $69.5 million has been borrowed so far from that bank. Costs for the entire 150 floor skyscraper are estimated to be in the $2 billion range. The article goes on to say that 395 of the 1,194 Chicago condos in the Spire are under contract, which is more than many doubters believed would sell.

This isn’t the first time liens have been placed against a Chicago real estate development and it isn’t necessarily a sign that the project is sinking. Many Condo Developers in Chicago are facing tough obstacles right now, including slow sales and hard to get construction financing. Only time will tell if the Spire gets off the ground.
http://www.bestchicagocondos.com/

[UberAlles]

There are 34 large caissons down to bedrock. I doubt these will go unused.
Maybe Carly can come back in and build design B. Now THAT would be awesome!

Oh and BTW, The post Zach wrote about it being on hold and the post then being deleted. Turns out to be right. Just sayin...

[zachary78]

Hi guys, don't forget I was the first one that told you that the project is on hold. My source tells me they expect it to be on hold 8-9 months or a year. Cause right now, not only that it'll be very expensive to get money, but it is nearly impossible for a project of this size. But they are definitely going to go with it.

[AUMAN6]

Originally Posted by UberAlles

Hmmmm... Still want to think that is will get built and this is just a delay. Kelleher is no dummy. One day next year out of the blue Shelbourne will announce they found a GC and it'll start popping again. The sad thing is that Calatrava may not return to the project. These kind of breaks in a relationship often are permanent. That might mean no Calatrava bridge.

I dont know, it is always the same love-hate relationship with developers and architects on any project. Fast friends in the begining, the romance thrives during design and then reality sets in, change orders and cost overages from the architect start to roll in and developers start to negotiate, TYPICAL STUFF HERE! Especially in this market.

[wrab]

Originally Posted by Dirt Lawyer

$15 million is not super-offensive for a project of this size. The fact that they filed liens means little to me; when a project stops, in order to preserve your rights against the property (as opposed to just the developer) you have to file a lien within x (in this case 90, as I recall) days after the last date material work was performed on the project. The architects would be foolish not to file a lien.

It seems to me, based on what I'm reading and your input, that the parties are lining up for an eventual settlement so people can move forward should conditions merit. And a lender's not going to advance more money if this baby's d-e-a-d.

Trump, IIRC, is legendary for his disputes with contractors. Makes me glad I have never worked with or against him. (It almost happened once....whew!)

Is it normal, though, in your experience, for the filer to go public like this on a project that is still being marketed?

[JDRCRASH]

As bad as the Credit Nightmare is, this still seems kind of a shocker.

Although, Chicagoans should be grateful for what they have U/C right now. In LA, nothing (thats right, NOTHING) huge has broken ground for well over a year. This is likely because it is virtually IMPOSSIBLE these days to get financing and construction loans for projects on a large-scale. In fact, I wouldn't be surprised if the Waldorf-Astoria runs into financial trouble as well.

[honte]

A look to the brighter side...

If we were in a good credit market (50% sales to get a loan) and everything scaled directly (which I know it doesn't), Kelleher would already have sold enough units to commence a 99-story building.

Another way of looking at it: If he were building the W=A tower, it would already be sold out based on the reported sales figures.

So, all in all, I think we have reason to be cautiously optimistic. He's done an amazing job thus far.

[Beck4ABigChicago]

Originally Posted by wrabbit

Is it normal, though, in your experience, for the filer to go public like this on a project that is still being marketed?

These filings or claims of lien are filed in the sec state office or county recorders office and are of public record (as the purpose of filing the lien is to let all other creditors know that you have superior claim). So to answer your question, by definition/function a lien is public and you can bet this months rent that newsworthy "events" such as these do not go unnoticed by the press.


Edit: PS, I want to agree with honte's above reaction to the recent news. For a superstar/athlete/politician, the most mundane and meaningless words/acts/etc become "newsworthy" for some reason. This building is no different. The filing of liens does not mean anything specific to the strength of the financial position of the project or the developer. I think more than anything the building's continued sale and the availability and cost of money will determine if this thing gets done. A lien or a 2016 Olympic Games in Tokyo is not what we should be worried about.

[Dr. Taco]

Originally Posted by wrabbit

Is it normal, though, in your experience, for the filer to go public like this on a project that is still being marketed?

well, it's not like they held a press conference...right?

[Jaroslaw]

I am puzzled about one thing. Kelleher is supposedly worth well north of a hundred million. A year ago, one's impression was that he would keep this building going on his own dime well past the foundation work. Has he really taken such a hit that he can't afford to take the risk any more? Or has he lost so much money that he can't afford to cash out now? Or does he see better places for his cash than this project right now? Note that it seems that his bankers seem to have taken more exposure to this than he.

My first take was that a dispute about relatively small amounts like this was not worth the bad publicity.

My second or third take is that Calatrava has lost confidence that this thing will get built. He has probably done a lot more work than he's been paid for... likely he's turned in substantially complete designs for structure bids, but he's been paid only in proportion to what has been done at the site...

[cbotnyse]

I know guys like honte and wrabbit and others are trying to be positive here, but this tower is dead, IMO. There is not a bank on earth that can finance this right now. Its simply the state of the debt market. Unless a lot of really rich people see this tower as a better investment that the stock market, which may be true, there is no way they will sell enough units to get funding. (or maybe we can add this the the feds bailout package )

My source is telling me they are being told to plan for a shut down of at least a year.

[wrab]

What happens to DuSable Park if the project goes south? Does it proceed/has Kelleher already put his ante into the Park kitty? I'm not very clear on how the park stuff is being coordinated & financed.....

[Rocket1]

Originally Posted by cbotnyse

I know guys like honte and wrabbit and others are trying to be positive here, but this tower is dead, IMO.

I think "dead" is the wrong word to use here, cbot, since that implies it's done for good.

"Hibernating", "dormant", "suspended", etc, are a more accurate description. At least I sure as hell hope so.