Chicago Spire developer scales back on sales office

Posted May 17, 2010 at 9:52 a.m.

Spire-Two-Web.jpgThe site for the proposed Chicago Spire skyscraper sits abandoned on April 1, 2010 in Chicago, Illinois. Work was suspended after the builder ran into financial troubles in 2008. (Scott Olson/Getty Images)

By Mary Ellen Podmolik |
The developer behind the Chicago Spire closed its posh sales office over the weekend, relocating the marketing arm for the long-stalled project to a much less grand office space nearby.

Shelbourne Development Group, which has been battling the owner of the NBC Tower for nine months, consolidated the sales function into its own office space at 111 S. Wacker. A spokeswoman for Spire developer Garrett Kelleher denied that the move signaled that the project was dead.

“He’s being smart,” the spokeswoman said. “If you’re in a situation where things are slowing down, you need to consolidate and you need to be smart. Clearly the economy has been tough and he’s had to focus on areas of his portfolio that are doing well.”

The sales office in the NBC building, which occupied the entire 18th floor, opened in early 2008 and included touches designed by Spire architect Santiago Calatrava and a built-out model of a Spire condominium.

The owner of the NBC Tower sued Shelbourne to evict the developer last August, charging that the company had not made a rent payment since April. In March, the case was dismissed by agreement, and a $55,082.06 judgment for NBC Tower was voided.

Instead of touring a model unit, potential buyers will see samples of materials and three-dimensional computer models, the spokeswoman said.

The sales office’s closing is likely to cast more doubt on whether the twisting, 2,000-foot-tall skyscraper will ever rise from the circular hole in the ground that now exists alongside 400 N. Lake Shore Drive. Shelbourne has been beset by financial problems since starting the skyline-defining project just as the financial and real estate markets were seizing up.

Shelbourne and Kelleher remain in litigation with Bank of America Corp., which filed suit last August, charging the developer with defaulting on a loan and said it was due $4.9 million. Bank of America said Kelleher personally guaranteed the loan. Kelleher and his company fired back in a countersuit, claiming the lender committed fraud and deception in arranging a loan used to start the building.

Earlier this year, an accounting of Ireland-based Clarinabbey Ltd., a subsidiary of Kelleher’s Shelbourne Property Group, showed it lost $197.2 million for the year ended March 31, 2009, with much of the loss tied to an intra-company transfer of funds for the Spire. It compared with a loss of almost $11.4 million in March 2008.

Separately, Joe Harmening, the Spire’s director of development hired in 2007, left the firm earlier this year and has not been replaced.

Kelleher’s other business interests include Lightstream Pictures, a California-based production company.

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  1. Mark Gums May 17, 2010 at 11:30 a.m.

    How appropriate the date of the picture is. The joke’s on all of us.

  2. Thomas Paine May 17, 2010 at 11:47 a.m.

    The sales center is still featured on the web site. The site hasn’t been updated for 1.5 years. The situation must be dire, indeed, if they can’t afford to pay Third Eye Design for a simple update.

  3. Nick Archer May 17, 2010 at 11:55 a.m.

    The headline is inaccurate. They didn’t CLOSE the sales office, they MOVED it. There’s a difference. You could even say they were evicted. But to say they closed it indicates that it no longer is functioning at all

  4. NWaterResident May 17, 2010 at 12:30 pm

    Let’s be honest – this thing is never getting built and a beautiful area of River North now has a gaping hole that will exist for the foreseeable future.

  5. Thomas Paine May 17, 2010 at 1:15 pm

    As long as the 400-plus deposits are held in escrow, nothing will change for years. The project won’t collapse completely until the depositors threaten Shelbourne with a class-action lawsuit in order to get out of their contracts.
    This is a good example of why you should always insist on a time limit on the holding of escrow funds when putting money down on an unbuilt project. And always insist that the developer have a construction loan in place before signing anything.

  6. kathy May 17, 2010 at 1:27 pm

    GOOD!! I’m glad the plans have stalled.. Now I hope they fall through COMPLETELY because I, for one, do NOT wish to see a giant phallus built (..or, if you want to have a LOT of fun with it… “erected”.. tee-hee!) on the Chicago skyline. I do, however, hope the people foolish enough to want to live in the phallus get their money back. They’re only guilty of poor taste … they can’t help it, even all their money can’t buy THAT!!

  7. Tim May 17, 2010 at 1:30 pm

    I said years ago that this project wouldn’t be built.
    Guess I was right.

  8. Katelyn May 17, 2010 at 1:40 pm

    We rent a condo across the river. I hope they cover up that huge cesspool soon- we’ve been seeing a lot of mosquitos, probably from all the standing water in that hole in the ground!

  9. dss36 May 17, 2010 at 1:42 pm

    I move that “The Spire” henceforth be called “The Nut,” as it looks exactly like a giant square nut.
    We do it too much of a service by continuing to refer to it as “The Spire” (which won’t be built for decades, if at all).

  10. Starstream880 May 17, 2010 at 1:44 pm

    “which occupied the entire 18th floor, opened in early 2008 ”
    Obviously there are deposits in escrow, so there were a some tenants. Operative detail is ‘too few’. No doubt a number of previous high flyers got their New Economy wings singed by the mort-gage meltdown. One of the few virtues of this latest financial fiasco that some of the ex-Masters of the Universe have joined we “lttle people” in the miles long unemployment lines and job fairs, let alone lost their aspiration to envy by owning a condo in the Spire. Boo-hoo, they’ll have to “trade down” to a common location along LaSalle or someplace.

  11. josdiz May 17, 2010 at 1:44 pm

    This is ironic. Instead of a giant drillbit in the sky we got a giant drill hole.

  12. jeff s May 17, 2010 at 1:48 pm

    I hope they build it. It looks cool.
    IMPEACH DALEY … I mean still arrest and prosecute his nephew too.

  13. Melanie May 17, 2010 at 1:54 pm

    I’d be shocked if this were ever to be built. Instead, they built a gigantic Mosquito Farm. Score!

  14. anthony May 17, 2010 at 2:02 pm

    Use that hole for Mayor Daley to crawl into after he is voted out of office. Again, the city is broke, National Guard is being requested for crime and we have this dandy hole in ground.
    BUT we wanted the Olympics? UM hello? All that cash Daley and company would use for the Olympics, how’s about you apply to the current problems at hand.
    I say keep that hole as is, and put a plaque as a constant reminder to all in the future. It is a shame too, that skyscraper would have been gorgeous on the skyline.
    Maybe that hole will be the Mayor Daley memorial public library. Keep the hole, put a KINDLE on a plaque and call it a day!

  15. Jed May 17, 2010 at 2:12 pm

    Face it, this hole is a replacement for Block 37.

  16. Mike Jones May 17, 2010 at 3:39 pm

    I lived in Europe while the Calatrava building, Turning Torso, was being built in Sweden. It remains one of my favorite buildings in the world to this day. If it’s not the Spire, an architectural showcase like Chicago definitively needs a Calatrava building.

  17. What May 17, 2010 at 3:47 pm

    Add one more collosal failure resembling the picture above and the Big Friendly Giant and co. can play bags all summer-long.

  18. JOHN C May 17, 2010 at 4:10 pm

    RED tape and city hall shennanigans doomed the tower.

  19. Ed Donnelly May 17, 2010 at 6:52 pm

    Allied Irish Bank, the financial backer on this project, was nationalized last year, and is now in the process of taking down the sovereign government of Ireland.
    The Spire is low on the Irish government’s priority list.

  20. Le Cram May 18, 2010 at 11:46 a.m.

    Let us fce it.
    The building was beautiful but the individual floor plans stunk from the high havens.
    People with big incomes were not about to buy sophomoric laid out plans forced to fit into a complicated overall shape.

  21. Dalton May 19, 2010 at 11:40 pm

    The big loss for the city is the millions promised by the developers to complete adjacent DuSable Park. This is not as big an eyesore as Waterview, but all these failed projects in prominent areas Chicago has been cursed with raise an important question. Shouldn’t developers have to escrow some amount of money with the City of Chicago to be used to clean up these eyesores in the event the projects fail? At the very least, the hole should be backfilled and grass should be planted.

  22. Mose Ritums May 20, 2010 at 2:03 pm

    I downloaded Viva Pinata a couple of weeks ago and, despite the fact its a”dusty” game, its the best nds game in my opinion =)

  23. Butler V. Adams May 22, 2010 at 12:50 pm

    “Let’s be honest – this thing is never getting built and a beautiful area of River North now has a gaping hole that will exist for the foreseeable future.”
    Let’s get it straight, the project was supposed to be built in Streeterville, not River North. Let us also remember that this parcel of land was a vacant, weed over grown lot for decades.

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