(Above) Chicago Spire construction site in May 2008. Photo by Ryan Kirby. (Click on the image to enlarge.)
15-March-19 ?? The road to redemption for the developer of the failed Chicago Spire will not pass through Chicago.
A federal judge dismissed a complaint filed by Garret kelleher and his company, Shelbourne North Water Street Corporation, against National Asset Management Agency, an Irish banking agency which he says derailed the project.
United States District Judge Andrea Wood says the case does not have jurisdiction over the matter, so the court does not have the power to hear the case against the Irish institution.
Kelleher’s lawyers had argued that the agency waived court immunity because its foreign assets, under Irish law, are governed by foreign law, but Wood rejected the argument, saying he did not There is simply no basis for the court to find that the defendants have waived sovereign immunity by contract. ??
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.
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.
Agency set up to manage Irish investments after global collapse
In late 2009, the Irish government created the National Asset Management Agency to acquire property development loans from Irish banks, such as Anglo, in exchange for government guaranteed bonds.
Shelbourne began working with NAMA to find a way to resume development of the Spire, but the agency, Shelbourne says, rejected many proposals.
Finally, in September 2011, Shelbourne believed they had made an agreement with NAMA to release Kelleher from all personal guarantees and allow Shelbourne to purchase the Spire site for less than the full amount owed on the loans.
Shelbourne even found an investor to advance around $ 92 million to repay the loans and allow Shelbourne to complete construction. But in July 2013, NAMA sold the Spire loans, along with personal guarantees from Kelleher, to RMW Acquisition Company, which operates as The Related Companies, for around $ 35 million. The National Asset Management Agency, on behalf of Irish taxpayers, is looking to Kelleher to make up the $ 54 million difference.
In addition to the $ 90 million, companies owned directly or indirectly by Kelleher owed around $ 510 million to Anglo and $ 600 million to other Irish banks.
Shelbourne said he spent $ 1.21 billion in damages. His lawsuit claimed tortious interference with the contract and accused NAMA of leaking confidential information and destroying written communications from former employees.
National Asset Loan Management, a private company based in Dublin, was co-accused in the lawsuit.
In her memorandum and opinion filed on March 14, Justice Wood argued that while Shelbourne was able to repay his loans, there was still no guarantee that the Spire would be completed.
?? Shelbourne should still have found the funds to complete the construction of the Spire, ?? Wood wrote (right).
The Chicago office of The Related Companies, Related Midwest, proposed to build two slender towers on the site, an 1,100-foot tower containing 300 condominium units and a 175-room hotel, and an 850-foot tower with 550 units. rental. The plan was rejected by 42nd Ward Alderman Brendan Reilly but on Feb. 21, 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.