(Above) Chicago Spire construction site in May 2008. Photo by Ryan Kirby. (Click on image to view larger version.)
8-Mar-18 The real estate developer behind the failed Chicago Spire project says it was bad blood and spite that toppled the skyscraper and will ask a federal judge in Chicago for $1.2 billion from bank representatives in Ireland he says are responsible.
Garrett Kelleher has filed a lawsuit in United States District Court against National Asset Management Agency, a publicly-funded banking agency in Ireland. The $1.2 billion is for expenses incurred to design and market Chicago Spire, plus lost profits from its development.
The Spire was introduced to Chicago and the world in 2006. At 2,000 feet, it would have been the tallest residential building in North America. The twisting design by world-famous Spanish architect Santiago Calatrava was going to be built on a 2.2-acre site in Streeterville between the Chicago River and Ogden Slip.
Work started on only the foundation and substructure, leaving a hole that is 104 feet in diameter and 78 feet deep.
According to the lawsuit filed on February 27, Dublin-born Kelleher (right) and his team traveled around the world, pre-selling 370 of 1,200 condominium units at an average cost per square foot of $1,400.
Photo by William Zbaren
Most of the $300 million spent on the project for design, construction, and marketing came from Kellehers company, Shelbourne North Water Street Corporation, but $90 million came from Anglo Irish Bank, based in Dublin.
After the collapse of real estate markets worldwide in 2008, Anglo Irish Bank, says Kelleher, refused to continue funding the Spire project.
Loans sold for fraction of value, Spire developer sued for the rest
In 2010, Kelleher learned that loans he had personally guaranteed had been transferred to National Asset Management Agency, which had been formed after the financial collapse to handle Irish real estate investments. Kelleher says he was misled about the status of the loans, specifically that he would not be pursued to make good on the guarantee, given his extensive cooperation with National Asset Management Agency.
Kelleher says when he tried to partner with a British capital firm to pay off the loans in full, National Asset Management Agency sold them for about one-third their value to Related Midwest in Chicago, costing Irish taxpayers about $53 million, for which the agency is now suing Kelleher.
Related Midwest, meanwhile, has not announced what it intends to do with the site other than not build the Chicago Spire.
On Wednesday, a court in Ireland refused Kellehers request to see government documents he says would support his claims. Still, he believes he will be awarded more than $1.2 billion.
We are confident that a Chicago jury will return a verdict awarding Shelbourne damages in a sum that redresses in full measure the consequences of [National Asset Management Agencys] unlawful activities, Kelleher told The Irish Independent.
The agency, meanwhile, says it expects to mount a full defense to this case.
(Left) 3D model of Chicago Spire.
Jonathan Bilyk contributed to this story.