Chicago Spire developer challenges dismissal of legal action against Irish banking agency

(Above) Site of the failed Spire along the Chicago River west of Lake Shore Drive. Work only began on the foundation and substructure, leaving a hole 104 feet in diameter and 78 feet deep. (Click on the image to enlarge.)

12-Apr-19 ?? The Irish developer who attempted to build the Chicago Spire is challenging the rejection of his $ 1.21 billion lawsuit against an Irish banking agency which he says derailed the project in 2013.

Garret kelleher filed a motion for redress of the March 14, 2019 order, citing federal rules of civil procedure that allow a court to vary a judgment in the event of error, oversight, surprise or excusable negligence.

Judge Andrea Wood said the United States District Court did not have the power to hear the case of Kelleher’s company, Shelbourne North Water Street Corporation, against the National Asset Management Agency, set up in 2009 by the Irish government to acquire property development loans from Irish banks.

His opinion, however, according to the motion, “contains manifest errors of law and mistakenly overlooks substantive allegations.” of Kelleher’s complaint, which was filed in February 2018.

Filed Thursday, the petition challenges the court’s finding that the National Asset Management Agency is not subject to the court’s jurisdiction, arguing that the agency’s business activities had direct effect. in the USA.

(Right) Kelleher next to the Chicago Spire model. Photo by William Zbaren.

It funded the payroll and operations of Shelbourne’s Chicago office on the one hand.

The motion also challenges the finding that National Asset Loan Management, co-accused in the lawsuit, is entitled to sovereign immunity. Such immunity would apply if the Dublin-based company were majority-owned by a foreign state, under the provisions of the Foreign Sovereign Immunity Act.

But 51 percent of the company, Kelleher points out, is privately owned.

Kelleher’s lawyers had previously argued that the agency waived court immunity because its foreign assets, under Irish law, are governed by foreign law, but Wood rejected the argument.

Irish agency interference condemns Chicago project

When the Chicago Spire project began in July 2006, it was hoped that the 2,000-foot-high tower, designed by the architect Santiago calatrava, would be the tallest residential building in the world. By early 2008, the project had a design, foundation and substructure at a cost of $ 300 million.

Santiago calatrava

The financing included a $ 90 million loan from the Anglo Irish Bank Corporation that Kelleher had personally guaranteed. But with the 2008 global financial crisis, Anglo was unable to continue funding the project, Shelbourne was unable to find alternative funding, and the development of the Chicago Spire came to a halt.

After the National Asset Management Agency acquired the loan and the Spire site, according to Kelleher, it made inaccurate disclosures to potential bidders, resulting in a small number of low bids. One Chicago-based agent, in particular, made “inaccuracies”? who ?? severely affected ?? investors ?? willingness to bid.

Otherwise for such ?? interference ?? by the agency, the Spire, Kelleher says, would have been completed and the loans would have been repaid.

(Left) 3D model of the Chicago Spire.

Kelleher asks the court to vary the opinion to find that it has jurisdiction over the National Asset Management Agency and that National Asset Loan Management is not entitled to sovereign immunity.

Lawyers representing Shelbourne include the Chicago office of Quinn Emanuel Urquhart & Sullivan.

In July 2013, the loan and the Spire site were sold to RMW Acquisition Company, which operates as The Related Companies, for approximately $ 35 million. The Midwest offered to build two slender towers at the site, but the plan was rejected by 42nd Ward Alderman Brendan Reilly. On February 21, 2019, the City’s Planning Commission voted to extend the site’s zoning rights for another year, giving Related Midwest more time to revise its plan.

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