Developer Loses Fight in Failed Chicago Real Estate Project

August 12, 2011

A developer has been ordered to pay off some of his debts tied to the tallest parcel of Chicago real estate that never was.

Chicago real estate

The Chicago Spire hole.

Irish developer Garrett Kelleher and his company, Shelbourne Development Group Inc., borrowed millions of dollars from Bank of America to build a 2,000-foot-high skyscraper that was to be the Chicago Spire and is today a huge hole in the ground at 400 N. Lake Shore Drive.

Last week, a federal court judge in Chicago ordered Kelleher and his company to pay more than $5.2 million, plus attorney and other fees, to Bank of America to pay off a $7-million pre-construction loan that dates back to 2008.

Kelleher and Shelbourne had filed a counter-suit against the bank, arguing that they were unable to secure financing for the project due to “an unforeseeable and unprecedented economic downturn and recession” and shouldn’t be responsible for defaulting on the loan the developer had personally guaranteed.

Can you imagine if every developer, builder and homeowner pleaded that case after what our economy has been through?

Proposed Chicago Spire

The Spire that never was.

Kelleher already faces a $77-million foreclosure suit from Anglo Irish Bank Corp., Ltd., the bank that provided funding for the developer to acquire the property along Lake Shore Drive in the first place.

The Chicago Spire was to be a 150-story condominium tower of 1,194 residences situated along the lakefront. The spiraling skyscraper, designed by Spanish architect Santiago Calatrava, would have been the tallest residential building in the world.

Now it’s one of the biggest holes in the ground, and Kelleher is right down there with it.

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[…] hope this project at 500 N. Lake Shore Drive does better than another Chicago real estate project, the Chicago Spire, which was supposed to be located at 400 N. Lake Shore Drive and is now […]

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