Market Conditions: Iconic Chicago Spire is (Apparently) No More
Crain’s is reporting that the Anglo Irish Bank has filed a $77 million foreclosure suit against the Chicago Spire developer Shelbourne Development which all but ends any hope that the Spire will ever be built as the tallest residential building in the world.
Construction was halted 2 years ago at the site so it’s not as if anyone had high hopes all this time anyway.
The Spire supposedly was 30% sold at one point but the 1200 unit building would have been a hard sell in even the best of markets.
I’ve chronicled many of the ups and downs of the Spire over the 3 years I have run this blog.
Maybe my very first post on the Spire in September 2007 should have foreshadowed this day as it discussed the difficulty Shelbourne was having in marketing the building overseas.
Yet investing in this premium-priced tower designer skyscraper, in the US where many property prices are falling, and in a city largely unknown to British investors, may well appeal only to the brave. Conventional wisdom urges investors to buy lower-cost properties in established markets with limited supply.
The Spire’s story so far may also make investors nervous. The original developer failed to win funding so dropped the scheme, rival developer Donald Trump claims the Spire may be a terrorist target, and the Calatrava design has seen late changes including the removal of a proposed hotel. The Chicago Times newspaper has suggested that a shorter tower could be built on the Spire’s existing foundations if the full scheme is scaled back.
And then there was the seemingly endless belief that the high end real estate market would go on booming forever and ever even as inventory started to mount.
“Chicago remains pretty strong and has certainly not suffered in the way some markets have – for example San Diego and Boston,” says Chris Gaggero, an English estate agent who works for @Properties, a realtor in the city.
“The Trump Tower, which added a lot of inventory to the high-end downtown market in Chicago, doesn’t seem to have created a drag,” Gaggero adds. He points out, however, that the number of top-end apartments already on sale in downtown Chicago is 15 per cent up on the figure two years ago. Prices in this sector have risen only one per cent since 2005.
The result is a hole in the ground where a building should be.
What do you think will ultimately get built on the site?
And how long do you think it will be before any construction is resumed?
British investors being urged to invest in the Chicago Spire [Crib Chatter, September 27, 2007]
Spire looking dead; original developer says Calatrava still could shape site [Chicago Tribune, Oct 11, 2010, Blair Kamin]
I’m sure this will make a lot of people who own condos with views of the lake in Streeterville very happy if those views would have been obstructed by this Spire.
Actually- several of the newer buildings nearby actually marketed the fact that it would have a view OF the Spire (not that its views would be blocked BY the Spire.) But now, all they look at is a big hole in the ground.
Hmm, I didn’t know that. Seems like an interesting marketing choice, I’d much rather have a view of the lake than of another building. However, I was actually talking about the people that purchased nearby before the spire was announced. Then had to deal with the idea of losing their views, but are now getting them back.
Always wondered how Garret Kelleher, a painting contractor from Chicago, with an office on Cortland Street and 5 guys working for him in 1994, wound up a “billionaire” developer in Ireland. He should have stuck with painting.
That is terrible news – I really wanted to buy in the Spire. One of my neighbors bought the multimillion dollar penthouse unit and was singing the praises of the building to another neighbor who got many of us interesed in buying there. It was going to be a very unique building in a great location!!! My bet is that something will get built there in the next 5 years (?scaled down version). It is too nice of a location and too desireable to be left vacant or fill with townhomes.
“It is too nice of a location and too desireable to be left vacant or fill with townhomes.”
Its contaminated with thorium from an old light bulb factory.
They might as well rename it the Ogden Slip Open Thorium Pit.
Good riddance about the Spire. The last thing Chicago’s skyline needed was a giant..well..can’t it at work.
“Its contaminated with thorium from an old light bulb factory”
That’s just fear-mongering probably planted by a competitor!! Even if there is thorium, do you not think it would be safely removed/cleared? Also, do you really think that nothing will be built on that prime (and VERY expensive) piece of land?
Can the giant hole in the ground can be used as the base for another high rise, such as a rental apartment building? Or would the hole have to be filled in or re-done to construct a different high rise?
“It is too nice of a location and too desireable to be left vacant or fill with townhomes.”
As densely populated as Streeterville is, the neighborhood still has several blocks that are either vacant (which are usually turned into parks) or are just parking lots. You’d have thought a developer would have bought these during the boom to turn them into residences, but no one did, and of course no one is going to now. I wouldn’t be surprised if the Spire area was vacant for a long time.
“That’s just fear-mongering probably planted by a competitor!!”
Tell that to the parking lot attendant back when it was a lot who died of cancer. Presumably from long-term exposure to thorium in the soil.
“he current revetment of the land is in need of repair which may cost up to $5.7 million.[3] In addition, soil tests performed at the location of DuSable Park in December 2000 showed contamination of radioactive thorium.[9] From 1904 through 1936, the Lindsay Light Company processed ores which contained thorium to manufacture thorium impregnated gas mantles.[10] It was suspected that after the plant closed, contaminated soil was dumped on the location of the proposed park.[1] In March 2003, the Chicago Park District stated that the thorium clean-up on that land was incomplete.[11] It has been reported that Shelbourne Development will soon be taking soil samples to determine the severity of the radioactive contamination.”
http://en.wikipedia.org/wiki/DuSable_Park_Chicago
whatever does/doesn’t get built i just hope they one day finish the proposed runners/bikers bridge across the river. think there was some tie-in to the Spire with this which is why it has never been finished.
my guess it that hole stays there for a decade or more.
definitely not much need for new high end condos in Chicago.
“whatever does/doesn’t get built i just hope they one day finish the proposed runners/bikers bridge across the river. think there was some tie-in to the Spire with this which is why it has never been finished.”
The Spire construction was going to include a park on the slip, so that is probably not going to happen now. However, the city’s planned Navy Pier pedestrian/bicycle flyover project is still on track for bids and planned construction, according to the city’s website. That project is so sorely needed.
Bob: half of streeterville has similar issues with various contaminates and all sites must undergo soil testing and cleanup (if necessary) before building can commence. IOW: nice fear mongering.
And I love the armchair architecture critics that seem to come out of the woodwork whenever the spire comes up. To me, the spire was an emblem of the indulgence of the real estate boom. I guess if you are rooting for RE to tank, I get the barely hidden hate toward what surely would have become a source of civic pride for chicago in the long run. It wasn’t perfect, but it was a nice dream. Sad that all too many relish pissing all over it…
If you’d like a bit better understanding of what Chicago sites are impacted by Thorium contamination, you should check this site out:
http://www.epa.gov/region5/sites/lindsaylight/index.html#radrepts
The Lindsay light company was responsible for most of this contamination, though other pollutants from streeterville’s industrial past have been problematic as well. Sites suspected of being polluted cover a surprising area of Chicago’s core, though much of it has been claimed to have been “remediated”.
Bob’s concerns are certainly not completely unfounded, but in the context of that area of Chicago, can almost certainly be regarded as fear-mongering on a project he doesn’t like. Know before you buy, though…
“One of my neighbors bought the multimillion dollar penthouse unit and was singing the praises of the building to another neighbor who got many of us interesed in buying there.”
You’re neighbors with Ty Warner?
Anyway as sad as I am to see this project shut down I never really had high hopes for this place when I saw they were trying to sell like 500 units at $1000 a sqft
thanks, Michelle. that is good to know.
i run/bike south 9 times out of 10 just to avoid the whole lower wacker cluster-eff.
“Tell that to the parking lot attendant back when it was a lot who died of cancer. Presumably from long-term exposure to thorium in the soil.”
That was at the parking lot directly behind the Time-Life Building that’s has a completed building on it now.
DuSable park is the other side of LSD and teh cleanup of it was part of teh Spire plan–they did remove many cubic yards of contaminated soil, but I don’t know if the cleanup of the park was completed or not.
The Spire would have been awesome, but the city certainly doesn’t need any more new luxury inventory right now. Perhaps it will be built one day.
But other than the awesomeness of the building’s design, Clio, do you really think that’s a great location? I’ve always been stumped by the appeal Sville holds for some folks. As noted above, several blocks are parking areas. When I stayed at Prentice for a few days, I ventured out to the store at around 9 p.m. It was a ghost town, save for any Northwestern related pedestrian activity.
sonies, we are not supposed to mention names here – but I guess it wasn’t that hard to figure out… but to answer your question, yes – great neighbor and great guy (and, he lives in one of the cheapest houses in the area – which makes him even greater in my opinion)!!!
sorry 1200 units at $1000 a sqft
Asshole developer suffering from a severe case of hubris.
Fill the hole up you jerk
I am glad this thing is kaput for the fact that they weren’t even planning a rooftop deck accessible to the public or tourists.
Sorry but I don’t think Ty Warner and his friends should have exclusivity on those views.
Hahaha NO SOUP FOR YOU MR. WARNER! NO SOUP FOR YOU!
“Sorry but I don’t think Ty Warner and his friends should have exclusivity on those views.”
Wait – but at the same time, you argue about the govt. taking “your” money and funding underpriviledged people (food stamps, public housing, etc.). You can’t have it both ways….
The financing was dicey for this project even when the market was at high tide. It was always considered to be really aggressive.
I love the looks of the building, but I have to admit that there is really no reason to build a 2000′ building. Most people have a real aversion to living at extreme heights and a 1200 unit, 160 story building presents real problems for first responders.
Some people have stated that mega-skyscrapers may be slated for obsolescence due to the cost in energy to run these places. I’m not sure that’s true, but these super-high (over 100 story) buildings seem to be really expensive and tricky to design and build relative to the prices the units will sell for.
Chicago doesn’t need to be Dubai, and I don’t think we want to be. I really believe the Trump Tower will be the last mega-scraper built in this city.
I was in a condo at 474 N. LakeShore, where the guy had a combined, 5000 sq. ft. unit that occupied the entire south side of that building with gorgeous wrap-around views of the lake, river, yacht club, etc., that would have been very significantly blocked by the Spire which would have been just 200 or 300 feet to the south. But other than that building, not sure that too many other buildings would have had views significantly blocked by the Spire.
“Sad that all too many relish pissing all over it…”
lol, welcome to cribchatter where pissing over things is a daily occurence.
as for the topic at hand, if I owned the land and wanted a quick(er) exit, I’d build an inoffensive-looking, mid-rise independent living senior center.
“Clio, do you really think that’s a great location? I’ve always been stumped by the appeal Sville holds for some folks.”
I really do feel that there is a lot of value in this location. I own a unit at 440 Mcclurg and actually lived there one summer about 8 years ago. It was GREAT for several reasons: proximity to Michigan avenue (w/o the traffic – although now with those new movie theaters and navy pier, traffic has gotten worse), centralized location with no problem getting cabs at any time, proximity to great restaurants, and, most importantly for me, proximity and ease of getting to 290 via lower wacker. I am telling you – i now have a place at michigan and walton and just travelling that extra mile takes me an additionaly 15-20 minutes sometimes!!!
I really only se the area as appealing to thoose who want an “in-town” or landlords or temporary/corp housing. Otherwise, the highrise neighborhood with limited street-level action beyond Michigan Ave tourist traps.
“I really only se the area as appealing to thoose who want an “in-town” or landlords or temporary/corp housing.”
I agree – but those are the people with money and therefore is a significant and important segment of the market. (also, don’t forget professionals w/o kids that want convenience).
IMHO, I’d rather go for river north or gold coast to get the dense urban feel and have some kind of lively street level action. Every time I sapend any time in friends places around here I feel like I’m in a hotel and not in a good way, feels very unestablished and transient.
which, incedentally might be why this concept *could* have worked, I just don’t like it.
What will end up on the site will almost certainly be worse in terms of the view from nearby buildings. The key thing about the Spire was its slenderness – it combined air rights that otherwise could have led to a much wider, shorter building that would have cut off much more of the view from places to the west of it.
It also, of course, would have been yet another architectural icon for Chicago’s skyline, which is a big deal in driving tourism, so it’s not to be sneezed at if you’d like to see the city more solvent.
There’s just no way to answer “is X a good place to live” – it always depends on what matters to you.
I am a proponent of bringing “new” capital to the city. The spire would have hopefully brought net new affuluent buyers to Chicago who might like Chicago so much that he/she might decide to open an office in Chicago or invest in a Chicago company. I personally like affluent people because a poor person cannot create a job (except a government one) and affuluent people give large sums of money to charity. Should be interesting to see how you all turn this paragraph into a negative…
It was ugly anyway! Good riddance.
Bob my friend you have let me down this morning.
“I am glad this thing is kaput for the fact that they weren’t even planning a rooftop deck accessible to the public or tourists.
Sorry but I don’t think Ty Warner and his friends should have exclusivity on those views.”
“Libertarianism is the view that each person has the right to live his life in any way he chooses so long as he respects the equal rights of others” and that, “Libertarians defend each person’s right to life, liberty, and property–rights that people have naturally, before governments are created.
So is your definition of Libertarianism that the “equal rights” rule applies and that the general public should be able to come over to Ty’s penthouse one day a month for drinks to watch the sunset? My guess is that most Lib’s will believe that your “equal rights of individuals to see that sunset theory” is covered by the Willis and Hancock tower observation decks and that those Spire owners can live the way they choose on top of the world!
If that is the case then what time are you inviting all us crib chatters over to your place to enjoy the view from your roof. There is no public observation tower from your neighborhood is there?
BTW I was hoping it would be built. It was a cool design that would have attracted additional architectural visitors from around the world. Very sexy but slightly impractical design.
Wonder if Ty got his deposit back?
Clio – can you get us the good neighbor discounted rate at the T.W. penthouse at the Four Seasons in Manhattan? I looked up at that thing all weekend as our suite at the Hilton just did not compare.
“Clio – can you get us the good neighbor discounted rate at the T.W. penthouse at the Four Seasons in Manhattan?”
That’s westloop’s territory, and I dare not tread on it!!! BTW, where is westloop?
“So is your definition of Libertarianism that the “equal rights” rule applies and that the general public should be able to come over to Ty’s penthouse one day a month for drinks to watch the sunset?”
No its my personal preference if such a structure was to be built it would be nice if they had an observation deck opened to the public. And given this one didn’t, I am quite pleased it isn’t getting built. Has nothing to do with libertarianism.
Ugh, for the second time already this week, I’m agreeing with Bob. It was crazy that the Spire wasn’t going to have an observation deck (or someplace public up top, be it a bar/rest or something like what’s atop the Willis Tower), and it’s pretty lame that the Trump doesn’t having anything either (though that’s my only complaint about the Trump building).
When I lived in NY, I got a kick out of going out on the decks at the Empire State Building and WTC and to Windows on the World at the WTC (some touristy things never get old).
Market factors collapsed the spire- It would have been a great addition to the skyline and I hope it one day will be built. Chicago is great because as daniel burnham said make no small plans. I hate to see this kind of thing happen as it contributes to the malaise we all find ourselves in. Obama’s tenure as President is looking a lot like the Carter years.
Spire not getting built (by the former Chicago house painter from Ireland) = Obama is governing like Carter. I see.
“It was crazy that the Spire wasn’t going to have an observation deck (or someplace public up top, be it a bar/rest or something like ”
I’d imagine this decision was due to the small footprint of the building which probably precluded having a separate elevator bank and entrance for the observation deck(s).
people aren’t going to pay $1000 a sqft to share their building lobby with tourists from Kentuckiana
There are aprox $100 million reasons why the penthouse floors went to Ty W and a few other lucky rich bastards and not to tourists sipping 22.99 strawberry daquris. This place needed money on the front end to get construction loans.
they can just fill the hole with beenie babies and make a park
“people aren’t going to pay $1000 a sqft to share their building lobby with tourists from Kentuckiana”
Obviously people weren’t willing to pay $1,000sqft to NOT share their building lobby with tourists from Kentuckiana as it wasn’t built without the shared lobby. 😛
Why does it not surprise me that clio was dying to buy an overpriced condo in a phallic-shaped building?
they can just fill the hole with beenie babies and make a park
*************************************************
thank you,i’ve been waiting 2 hours for a beanie baby comment.
overpriced condo in a phallic-shaped building?
*******************************************
been waiting for that one too…my day is complete.
When I lived in NY, I got a kick out of going out on the decks at the Empire State Building and WTC and to Windows on the World at the WTC (some touristy things never get old)
Exactly there were two or three decks in all of NYC if you include the 30 rock observation deck. Perhaps some hotels also have roof decks but the high end luxury buildings do not use this as a selling feature. They are trading on the notion of exclusivity and limited supply and strong demand. Obviously the supply demand equation never worked out at those prices and it is a damn shame.
While I can’t suggest that I would have bought at any price point I found the place cool as heck. If Trump made that comment it was in poor taste as I would bet that all of his hotels and other Trump named buildings around the world are also terrorist threats. He represents all that they hate.
“And I love the armchair architecture critics that seem to come out of the woodwork whenever the spire comes up.”
Huh? What’s da matter with “armchair critics” of anything — whether its of politics, architecture, or the Bears offense?
Are we armchair critics supposed to stand back and leave the decision-making to experts (like you?) when it comes to deciding what kind of buildings (or politics or football) we want to piss on?
And what’s your evidence for believing that the Spire “surely would have become a source of civic pride for chicago in the long run”?
The “surely” part of that sentence is amazingly . . . (fill in the blank) armchair-ish.
“Sad that all too many relish pissing all over it…”
No… I’m going to relish pissing in it.
Pissing in the hole that is basically emblematic of all the excess of the boom. A hole the developer started digging with no secured financing behind him nor enough sales to get the next installment loan. He certainly had grandiose plans and a few Irish bankers willing to gamble. I hope a new tradition is people walk over piss in it every St. Pat’s day after the river dyeing. It’d only be befitting.
Shelbourne’s only saving grace is his uncompleted structure isn’t even the worst uncompleted that we have left over from the boom. Why the hell our City Council was allowing these projects to proceed without 100% financing in place before groundbreaking is beyond me ($$$).
We can thank the Asians for being dumber than the Irish this time around as Water Tower Place looks is now Chicago’s own Ryungyong Hotel (before they added the glass paneling). I’ll probably try to piss on that too at some point (but the squatters by then might take offense).
Fvck Shelbourne I hope he goes the way of many other developers during the boom like Roszak, Lagrange, etc and they go after all his stuff & they will–personal loan guarantees are a b$*#@!
We didn’t need half this crap built and its nice to see some pain from those who, using a lot of leverage mixed with big ideas, had way too rosy a view of future RE demand.
Ireland’s banking boom was bigger than almost anywhere else. Just this past week Anglo-Irish bank is being bailed out to the tune of $26 billion. Multiply that by about 100x to understand what that figure means in relative population terms to the USA. Kelleher probably got caught up in the frenzy, and fractional reserve banking actually creates far more new-money supply than the central banks ever did or could.
PS if Ireland’s population is around 4 million, could you imagine 1/2 of Chicagoland taxpayers being on the hook for a $26 billion bailout??!!!
Pffft the Irish are small potatoes yet again. Ever heard of Iceland? Their entire country’s population is ~250k and their banking bailout looks like it cost a bit more.
http://www.dailymail.co.uk/news/article-1073990/Iceland-owes-world-116-000-man-woman-child-island.html
It doesn’t change the fact the Spire WAS funded by a dumb drunk Irish bank speculating on RE they had absolutely NO BUSINESS WHATSOEVER being even closely related to. And those dumb Irish are probably going to bail them out.
These bankers need to be put out on the street along with the developers they enabled. Its really sad they’re considered a protected/politically connected class and aren’t. Hopefully that changes soon.
Traitor Brian Lenihan is in the pocket of the “senior debt holders”. This should be educational for how the system works. How are the TAXPAYERS/citizenry/future generations forced to make the senior debt holders square on their investments???? It boggles the mind!!
“Brian Lenihan, Ireland’s finance minister, told the Financial Times while on a roadshow in New York that he still opposed senior debtholders having to accept any losses as part of the €50bn (£43.7bn) bail-out announced two weeks ago.
The treatment of senior bondholders is seen as crucial for Ireland, with Mr Lenihan reluctant to impose losses when many of the same investors also hold Irish government debt.
However, the fact that taxpayers are having to foot most of the burden of the bail-out has caused public anger.”
Dan–they had to come to Chicago to get their PhD in pay-to-play politics!
Oh yeah back to the topic: Market Conditions in Chicago. Well here’s a chart of Illinois and other states:
http://sg.wsj.net/public/resources/images/NA-BI442_BANKOW_NS_20101012203404.gif
While we can all appreciate Clio’s optimism (5 years), realistically, we are looking at a number of years before this project can be redesigned, remarketed, and constructed.
Rumor mill has Calatrava still attached to the parcel
http://bit.ly/caPaJs
It will be interesting to see what happens. Definitely makes my list of top 3 disappointments in development http://bit.ly/aUOIXI
For now, I’m going back to my armchair to play with my beanie babies…
The crime of the century was when AIG was bailed out and the holders of dodgy insurance products (CDO, MBS, etc) were made whole. These were very politically connected entities who could not be allowed to lose any money at all. If people realized how this really went down they’d still be rioting in the street.
“If people realized how this really went down they’d still be rioting in the street.”
Yeah right. Your typical “person” is an overweight guy who watches NFL football every sunday and drinks domestic beer and gets wasted while wifey tends to the kiddos.
Seriously what ever gave you such grandiose impressions that the typical “person”/American/etc actually gave a crap more than having their basic needs met?
No the real tragedy of AIG (AND CITIGROUP, who acted almost as irresponsibly) is that there isn’t rioting in the streets about their behavior.
In fact both financial institutions have solidified their positions in America via being so large and exploiting that makes it laughable.
Yeah really once you understand where we are today after what happened in 2008 will make you step back and realized that the crony capitalistic bankers did indeed have the master plan.
America is fvcked beyond repair at least in the near term. The fake “Dodd-Frank” financial reform bill was just the icing on the cake.