CHICAGO | Chicago Spire | 610 M / 2,000 FT | 150 FLOORS | NEVER BUILT - Page 96

Cro Burnham · #**1901** Posted **Dec 8, 2009, 10:35 PM**

I'm not really sure why the unions would really need positive PR with respect to a luxury condo project, even a high profile one.

And they would have very negative PR if word gets back that the union saved Kelleher's and Anglo-Irish Bank's butts and/or the deal sours and the union loses member's pension savings, as would be a very high risk of happening.

The unions could spend alot less and get much more prominent PR elsewhere.

I don't buy the PR argument.

I worked on a few hotel deals a few years back with Union Labor Life. The investment guys they had calling the shots were as tough as any banker (probably tougher, is my guess) and PR was about 100th down on their list of priorities. They just wanted the construction sign to say "Union Financial Muscle at Work" or something to that effect.

If Union Labor Life has anything to do with this, this will not be soft money by any stretch.

lawfin · #**1902** Posted **Dec 8, 2009, 11:02 PM**

Quote:

Originally Posted by Cro Burnham

How many square feet is the building supposed to be?

Approx 3,000,000 sq ft (279,000 sq meters)

10023 · #**1903** Posted **Dec 9, 2009, 1:00 AM**

Quote:

Originally Posted by Tom In Chicago

Just to clarify. . .

What are the chances it costs significantly less than $2bn because they're not longer contemplating the original design?

Obviously there's been a big decline in the cost of commodities and construction materials since they originally budgeted this thing, but I have no idea how much of a reduction this implies in the overall costs of construction.

Dr. Taco · #**1904** Posted **Dec 9, 2009, 1:25 AM**

Quote:

Originally Posted by 10023

What are the chances it costs significantly less than $2bn because they're not longer contemplating the original design?

Obviously there's been a big decline in the cost of commodities and construction materials since they originally budgeted this thing, but I have no idea how much of a reduction this implies in the overall costs of construction.

is it because they are seeing it as

(risky) loan amount = $2b - (percentage material cost and construction costs have dropped)*$2b - (30%+)*$2b - $194m

?

Tom In Chicago · #**1905** Posted **Dec 9, 2009, 1:39 AM**

Quote:

Originally Posted by 10023

What are the chances it costs significantly less than $2bn because they're not longer contemplating the original design?

I wouldn't even bother speculating about that. . . no one is talking about a redesign. . .

. . .

FlashingLights · #**1906** Posted **Dec 9, 2009, 2:08 AM**

I'm a finance guy, but some of you are looking at this way to much from a pure financial standpoint for the unions. You have to consider all the politics involved, and the fact that unions want to keep union members occupied for their own benefit. Having union members unemployed is bad from a psychological standpoint and moral standpoint. Not to mention the public relations spin they can get from this.

You can do a NPV project analysis all day long and talk from a pure financial standpoint but your logic is flawed since your only looking at numbers. Look at the past history unions have funded projects like this before even if it does not make 100% financial sense.

Overall I'm not optimistic about this at all but not for the reasons stated. Even if the unions do get involved there is still more money required that I am not really sure they can get.

The only other thing I can optimistically speculate on is that once some money is thrown into the project others will be more likely to follow, it's the initial start up funding that is the hardest to find.

Untitled · #**1907** Posted **Dec 9, 2009, 2:28 AM**

CBS 2 has a new Associated Press article up about the Spire and the unions:

http://cbs2chicago.com/local/Stalled...2.1358143.html

This part interested me, regarding the unions making their money back:

Quote:

Also, the project is years away from completion, meaning there's plenty of time for the market to improve. Besides, he said, the deal now being considered would make the trusts the property's first mortgage holder, meaning the trusts would be "first in line" to take possession of the lakefront property if the project failed.

Miguel Rodriguez · #**1908** Posted **Dec 9, 2009, 3:55 AM**

If construction were to move forward it would parallel the construction of the Empire State building in some ways - it was constructed during the great depression and provided a source of employment for many of the city's work-starved construction firms.

The depression helped construction move forward quickly because workers were willing to put in overtime nights and weekends and materials were cheap. Same recessionary boost for the Spire?

Cyprose · #**1909** Posted **Dec 9, 2009, 8:45 AM**

Quote:

Originally Posted by Miguel Rodriguez

If construction were to move forward it would parallel the construction of the Empire State building in some ways - it was constructed during the great depression and provided a source of employment for many of the city's work-starved construction firms.

The depression helped construction move forward quickly because workers were willing to put in overtime nights and weekends and materials were cheap. Same recessionary boost for the Spire?

The depression killed far more buildings then it may have helped. Look at the 30 or so completed stories out of the 100+ planned for met-life north. The never realized second tower for the Detroit book building. The Hearst building being nothing more than a foundation and short stump until it was topped off by a Foster design in the early 2000s.

And then there are all the buildings that never got as far as the foundations: Larkin tower, the Fashion building, Apparel Mart, ect.

jet cm · #**1910** Posted **Dec 9, 2009, 12:33 PM**

Quote:

Originally Posted by jstush04

is it because they are seeing it as

(risky) loan amount = $2b - (percentage material cost and construction costs have dropped)*$2b - (30%+)*$2b - $194m

?

construction costs have not dropped (yet)

ChiPsy · #**1911** Posted **Dec 9, 2009, 12:57 PM**

Double-post

ChiPsy · #**1912** Posted **Dec 9, 2009, 12:58 PM**

Good news from David Roeder this morning, reporting that Kelleher has arranged bridge loans and mezzanine financing that would kick in if he can get the union financing to fly.

http://www.suntimes.com/business/roe...eder09.article

Dr. Taco · #**1913** Posted **Dec 9, 2009, 2:33 PM**

Quote:

Originally Posted by jet cm

construction costs have not dropped (yet)

well, i'm seeing a theme lately of construction unions apparently getting desperate for work....but then again, kelleher is desperate, too

Dr. Taco · #**1914** Posted **Dec 9, 2009, 2:36 PM**

Quote:

Originally Posted by ChiPsy

Good news from David Roeder this morning, reporting that Kelleher has arranged bridge loans and mezzanine financing that would kick in if he can get the union financing to fly.

http://www.suntimes.com/business/roe...eder09.article

that IS good news. although who knows what the amount of the bridge and mezzanine loans are. but the article says they would kick in if kelleher could get $170 million to restart the project. that seems fairly reasonable...

the spire is all i want for christmas. and maybe a super nintendo

Steely Dan · #**1915** Posted **Dec 9, 2009, 2:40 PM**

Quote:

Originally Posted by ChiPsy

Hope from David Roeder? Now I'm *sure* I'm hallucinating!

yeah, no kidding. a positive, optimistic spire article from Roeder?

be sure to tell all of your loved ones how much you care about them because clearly the end is near.

BVictor1 · #**1916** Posted **Dec 9, 2009, 3:11 PM**

I think that we should also remind ourselves that the AFL-CIO can always pump in more money at a later date. If my memory serves me correctly, they were going to invest up to $500 million into the olympic village. The proposed $170 million could just be a start.

ethereal_reality · #**1917** Posted **Dec 9, 2009, 6:24 PM**

Here's an article from the Belfast Telegraph.

http://www.belfasttelegraph.co.uk/ne...-14590851.html

JDRCRASH · #**1918** Posted **Dec 9, 2009, 6:27 PM**

Quote:

Originally Posted by jet cm

construction costs have not dropped (yet)

Are you kidding me? After being in the shitter for over 18 months, it still hasn't dropped? Sheesh...

Pizzuti · #**1919** Posted **Dec 9, 2009, 6:40 PM**

Quote:

Originally Posted by BVictor1

I think that we should also remind ourselves that the AFL-CIO can always pump in more money at a later date. If my memory serves me correctly, they were going to invest up to $500 million into the olympic village. The proposed $170 million could just be a start.

I think that unions would be generally inclined to show greater support for a public project like the Olympic Village than they would a private project like the Spire. In the case of the former, there is more of a guarantee of seeing a return on the investment, there is more of a guarantee that the thing won't fall apart anyway, unions have better relationships with city leaders than they do with construction companies, and even if the Olympic Village were to fail to break even, a union could sidestep the fallout with its members and argue that the Olympics are important way to bring all people together, good for Chicago and good for the world, it brings jobs to people all through the city, and they were only pitching in.

It's really different when you're building an extremely high-end tower for the super-rich, with your blue-collar construction workers. The investment is harder to defend, I think. I personally think it's great that they're playing a role in this, but I wouldn't expect unions to ramp up investments to the same level as they were willing to for the Olympics.

ethereal_reality · #**1920** Posted **Dec 9, 2009, 6:44 PM**

^^^I disagree. If you're unemployed (like the 30% of union workers) why would you care who you're building it for.
The worker's concern is his own financial difficulties, like house payments and putting food on the table for his family.

A job's a job.