Years after even the most wistful skyscraper nerd gave up hope on the Chicago Spire, there is suddenly a “bleep” on the patient’s EKG machine.
It started with Friday’s report in the Chicago Tribune that the current developer of the project, Shelbourne North Water Street, asked a court to bring in a local partner, and that partner’s $135 million. The partner is Atlas Apartment Holdings in Northbrook.
The creak of a nail being slowly pulled out of the Chicago Spire’s coffin caused amateur architects around the world to lose their minds. The internet echo chambers filled with the sounds of giddy laughter, unicorns braying, and the delicate harp-like sound that rainbows make when they arc across the sky and hit you square in the junk. The Chicago Architecture Blog tip line (206/227-1096) also went berserk with people texting in with such lucid thoughts as “OMG! U C Trib!” and “Spire! Spire! Spire!”
After years of bad news, the absence of bad news is seen as good news when it comes to the Chicago Spire.
The idea is that Atlas’ money would be used to pay the people Shelbourne owes money to because of the Spire project’s bankruptcy. That’s great, because it would remove a dark cloud hanging over the gaping hole next to the Lake Shore Drive Bridge where the 2,000-foot-tall skyscraper was supposed to go.
According to the Wall Street Journal, when the building is completed, Atlas would get 550 of the 1,200 or so residential units. When you do the math, it means that for its investment of $135 million, Atlas pays an average of $245,000 per apartment, in a building where the condos used to have a starting sales price of $700,000 and went up to $40 million.
However, at the same time it merely resets the money counter to zero. Atlas and Shelbourne still need two billion dollars to build the Spire. And while money is starting to flow for residential towers in the $50 million to $150 million range, the list of banks and investment houses willing to jump into the pool on a two billion dollar deal is still very small. Especially for a project in the United States. And even more especially, in Chicago.
As observers of development in Chicago for more than a decade, that makes us think that the goal isn’t so much to build the tallest building in the Western Hemisphere on the shores of Lake Michigan, but to pay off the debt and flip the property to someone else with deep pockets and the ability to put up a more modest building. But here’s where naysayers and skeptics like us get proven to be a bunch of charlatans and hacks:
Those words come from the mouth of Steven Ivankovich, the C.E.O. of Atlas. Again, Northbook-based Atlas. A company that might actually have an interest in scoring one for the home team.
You can read Shelbourne’s full press release below. It’s full of enough of the right words and phrases to make pretty much anyone hopeful that this project will actually happen. But then, remembering that two billion dollar price tag brings you back down to earth.
- In spite of all the virtual high-fives and chest-bumps across the internet over the good news, there is still a good deal of skepticism. And from people well placed to be skeptical. Remember, this was a project that was so dead that even local architects started talking bad about it. Privately, several told us that in their opinion it is “unbuildable” in its current design. Jealousy? Maybe. But it is virtually unheard of for Chicago architects to talk bad about the designs of other architects, especially to outsiders.
- When the Spire was originally approved by the city, the 42nd Ward was under different leadership. Since Alderman Brendan Reilly was elected, he has made a habit of requiring developers to built public parks before they can build their skyscrapers (see River Point and 150 North Riverside as examples). Ogden Park was supposed to be created by the developers of the Spire. Reilly should require Shelbourne to finish Ogden Park before starting on the Spire. That way the city gets something out of this if it turns out to be a “fool me twice” situation.
If there’s two things we’ve learned in eleven years of following Chicago development, it’s that few things happen quickly, and nothing comes easy. The next court hearing about this is next Tuesday, February 18. According to the Chicago Tribune article, after that, the next step in this process doesn’t come for another six months, which is the deadline for the court to approve Shelboune’s proposal. Then it gets even more complicated.
So the bottom line is that this is good news. Hopeful news. But building skyscrapers in Chicago is a lot like a high school dance. Sometimes the tall, pretty girl leads you on and you end up looking stupid when eventually you get burned. For that reason, we’re not going to get excited until the cranes go up and someone starts pumping a million gallons of water out of that hole next to the Lake Shore Drive Bridge.
Official statement from Shelbourne Development:
Shelbourne North Water Street L.P., the owner of the site of the Chicago Spire at 400 N. Lake Shore Drive, filed a motion for approval of a plan investment agreement today in the U.S. Bankruptcy Court. The plan investment agreement was developed with Atlas Apartment Holdings LLC, a major international residential developer and apartment owner headquartered in Chicago. Shelbourne has the exclusive right to file a plan of reorganization through March 10, 2014.
The plan investment agreement provides for up to $135 million of funding for a plan of reorganization that will pay all bona fide claims in full.
This plan of reorganization will enable Shelbourne to emerge from bankruptcy and with Atlas to move forward with the Chicago Spire, the 2,000 foot high residential building at the intersection of the Chicago River and Lake Michigan. Before the recession, the vertical foundations of the tower and underground garage had been completed, as had the ramps to lower Lake Shore Drive.
Steven Ivankovich, the CEO of Atlas, said: “We have been working with Garrett Kelleher over the past several months and now share his belief and vision in the Chicago Spire. This is a building that deserves to be built and built in Chicago. Atlas is committed to making this happen. The Spire will offer a very high end product to a demanding local and international public.”
Garrett Kelleher, the managing member of Shelbourne, said: “Given the ongoing recovery in the Chicago property market, the timing is better now than when this project commenced. I am delighted to have found a partner who believes in the project as passionately as I do.”
Tom Villanova, head of the Chicago Building Trades Council, said: “We have been waiting for this day. We look forward to a project that will provide over 15,000 construction jobs. Restarting this project will be a game changer for Chicago.”