An Irish developer with 10-year history in Chicago has purchased the 2.2-acre property on the citys lakeshore just north of downtown originally proposed in August for a Santiago Calatrava-designed tower, with plans to move forward on the 124-story residential and hotel project now estimated to cost $1.2 billion.
|Spiraling tower's cost estimate has doubled within past year. (Photo courtesy of Shelbourne Development Ltd)|
Garrett Kelleher, executive chairman of Dublin-based Shelbourne Development Ltd. & the Shelbourne Group, acquired the property July 19, from Chicago-based LR Development Co. for $64 million, said Thomas Murphy, general counsel of the Chicago law firm bearing his name and spokesman for Kelleher.
The site near the mouth of the Chicago River and Lake Michigan became available July 17, when the option to purchase it expired for a Chicago-based developer, The Fordham Co.
Christopher Carley, Fordhams founder and chairman, initiated the project with Calatrava and announced it with the architect at a news conference in Chicago last summer but fell short on financing, allowing Kelleher to step in.
Carley might continue to contribute his services, and negotiations with him are under way, Murphy said. Phone calls to Carley for comment were not returned.
Kelleher will obtain all the equity to finance the project, Murphy said. Dublin-based Anglo Irish Bank, which is entering Chicago, will provide the financing and possibly lead a consortium of lenders.
Since Shelburnes acquisition, the estimated project cost doubled. In March, when Calatrava was in Chicago for a project update, the estimated cost was $550 million, an increase from the original estimate of $500 million.
We think that that was a very optimistic number and for an all-in number very conservative, Murphy said.
The project was previously known as Fordham Spire, but the working name has been changed to 400 N. Lake Shore Drive because of the switch in developers, Murphy said.
Questions will likely be asked about the projects viability because of the new cost. For instance, it exceeds Donald Trumps 92-story Trump Tower Chicago under way by about $450 million.
Furthermore, condo buyers have abundant choices in the Loop, which is increasingly a hotbed of residential development. Data from Chicago-based Appraisal Research Counselors show 3,041 units between Roosevelt Road and North Avenue were delivered in 2005, and 4,446 deliveries are projected in 2006, nearly a 50 percent increase.
Jim Kinney, president of Chicago-based Rubloff Residential Properties and 26-year veteran of the local real estate market, said Calatravas tower has a good chance of getting built because of the Calatrava name and political backing.
There is a lot of interest in it, and I believe (Chicago Mayor Richard Daley) would like to see it built, he said. I think if you have the support of the mayor on any project, its critical.
A caveat, however, is that the average condominium cost per sq. ft.--$800originally announced for the project to be on the rosy side.
Rising construction-material costs and increasing prices for luxury condominiums in Loop likely will cause the figure to go higher.
I think it would have to be north of $1,000 per sq. ft. to make sense and to deliver it, he added.
Plans call for unit prices in the 300-condo structure to range between $600,000 and $5 million. Unit square footages were not released.
European Track Record
Kelleher has a history of delivering projects in Ireland and other European counties.
Shelburnes development portfolio exceeds $2 billion (U.S.), Murphy said. Since returning to Ireland from the U.S. in 1996, Kelleher has developed 1.5 million sq. ft. in Dublin, including on OConnell Street, the citys main downtown thoroughfare.
He has also developed properties in France, England and Belgium.
Kelleher worked as a self-employer painting contractor, general contractor and developer in Chicago from 1986 until his return to Ireland. He converted lofts in the Chicago in the 1990s.
In March, the Chicago Plan Commission approved the Calatrava project, and the Chicago City Council gave its blessing a month later, both unanimously.
The 920,000-sq.-ft. building would measure 1,570 ft. to the roof and include a spire/antennae.
In addition to the condo units, the building would hold 150 hotel rooms on 20 floors. About 50,000 sq. ft. of retail and support space is planned for the floors overlooking the river.
The 2,000-ft.-tall tower would jump ahead of Chicagos 1,450-ft.-tall Sears Tower as the nations tallest building and would likely be the worlds second tallest after the Burj Dubai under construction but not topped out in the United Arab Emirates. Burj is expected to be the worlds tallest, but its height is secret to prevent the announcement of something taller.
The Calatrava building has inspired observers to compare it variously to a plume of smoke, a drill bit and a swirling cloak. It would have a spiral appearance achieved structurally.
Concrete shear walls would surround the building core, and modular sections like boxes would make up the units. They would be cantilevered from the core, and 12 radial diaphragms per prefabricated box would attach the units to the core.
The boxes with curving, concave sides would be stacked, and each rotated 2 degrees from the one below. The stacked boxes would turn 270 degrees around the core as they rise, giving the facade the impression of a spiral.