Irish developer Garrett Kelleher’s ambitious dream to build the Chicago Spire, a 150-storey apartment tower is back on track after a bankruptcy reorganisation plan was approved this week.
Judge Janet Baer signed off on the plan at a hearing at the US Bankruptcy Court in Chicago. It will see a new investment partner back Mr Kelleher in paying off his creditors, allowing him to begin work on completing the unfinished project.
Conditional funding
In the Chicago hearing, lawyers for Mr Kelleher’s company, Shelbourne North Water Street, and its partner,
Atlas Apartment
Holdings, said they had a conditional commitment letter from
Stonebeck Capital
, a New York-based commercial property financier, to fund the reorganisation plan.
This plan will see Stonebeck making a series of payments to Related Midwest, which acquired the debt on the site of the proposed tower.
By October 31st it will have to pay Related $109 million or pay it $22 million on that date and a further $92 million by March 31st.
Once his company is out of bankruptcy, Mr Kelleher and his venture partner Atlas will still have to raise finance to fund the 2,000-foot-tall tower. This is now a possibility post the credit crunch, which had stalled the project as only a large hole in the ground since 2008.
According to a report of the hearing in the Chicago Tribune, Atlas said in court that it continues to "spend money by the bucket load" into gettign the project going.
“This is a better deal and it is more likely to close,” its lawyers told the court. But they warned: “You don’t know you have a deal until the money flows.”
Down to the wire
When the judge questioned the tough payment deadlines, Atlas lawyer
Doug Bacon
replied: “It’s a legitimate concern. It’s going to come right down to the wire.”
Atlas chief executive Steve Ivankovich told the Chicago Tribune that he had a good working relationship with StoneBeck. He said the deal being discussed "is a juicy deal for us. I give it a better than 50 per cent shot, but it's tough to say. This is a very tight, tough site to get your head around."
Mr Kelleher's attorney, Joseph Frank, said in court that his client "could have thrown in the towel. He didn't."
Mr Frank added that: “His commitment to [the spire] is the reason that general unsecured creditors are going to receive a substantial dividend” .
Mr Kelleher, who was in court, said Atlas was “absolutely” the right partner to allow him to finally build the Spire.
He said much of the work had been done, andbut much more remained. “It was always going to be a bit of a drill,” he admitted. “This will be an incredible come back,” a source who knows the developer said. “Garrett is 100 per cent determined to do it.”
