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

[Chicago_Forever]

I wouldn't say this tower is dead yet. I don't see what's so bad about waiting a year or so for the economy to get better before moving on with the building. As long as units are selling and buyers aren't pulling out, this building lives.

[cbotnyse]

Originally Posted by Rocket1

I think "dead" is the wrong word to use here, cbot, since that implies it's done for good.

"Hibernating", "dormant", "suspended", etc, are a more accurate description. At least I sure as hell hope so.

I sure as hell hope so too. But I think it will be dead for at least a year.

Its all about financing at this point, and that really doesnt exist right now. I mean, the LIBOR rate is over 4% right now and those are loans that large banks give to each other on a 3 months basis. That rate is historically around 1% and is seen as the safest loans out there. The debt markets are simply scarry right now.

Thats why I say, for this to go forward its going to have to be all about sales. I would even imagine that sales would have to be north of 50% for any bank to be confident enough to lend the money to resume construction.

[cbotnyse]

Originally Posted by Chicago_Forever

I wouldn't say this tower is dead yet. I don't see what's so bad about waiting a year or so for the economy to get better before moving on with the building. As long as units are selling and buyers aren't pulling out, this building lives.

Uncertainty is a bad thing. Maybe not for us because we are all just sitting on the sidelines anyway, but for buyers and potential buyers a year+ delay is a bad thing.

[Rocket1]

Just wondering.

If a project like the Spire or Waterview ends up being placed on hold for a lengthy period of time (let's say more than 1 year), would a buyer normally be able to get out of his purchase contract without paying a penalty?

[cbotnyse]

Originally Posted by Rocket1

Just wondering.

If a project like the Spire or Waterview ends up being placed on hold for a lengthy period of time (let's say more than 1 year), would a buyer normally be able to get out of his purchase contract without paying a penalty?

good question. hopefully they read the fine print!

I know we have a waterview buyer (budman) on this board, maybe he would know. I'm assuming its different for each building though.

[honte]

Originally Posted by Jaroslaw

I am puzzled about one thing. Kelleher is supposedly worth well north of a hundred million. A year ago, one's impression was that he would keep this building going on his own dime well past the foundation work. Has he really taken such a hit that he can't afford to take the risk any more? Or has he lost so much money that he can't afford to cash out now? Or does he see better places for his cash than this project right now? Note that it seems that his bankers seem to have taken more exposure to this than he.

My first take was that a dispute about relatively small amounts like this was not worth the bad publicity.

My second or third take is that Calatrava has lost confidence that this thing will get built. He has probably done a lot more work than he's been paid for... likely he's turned in substantially complete designs for structure bids, but he's been paid only in proportion to what has been done at the site...

Well, he just might be paying interest on those loans for an extended period of time until this project can get into swing full-force. So, I think it's wise that he would want to conserve resources while it "hibernates," to borrow another's phrase.

I agree that the bad publicity is not helping, but it could be inevitable. If he's truly in dispute with Calatrava, however dependent the project is on his blessing, then it's simply good business practice to protect yourself and your project by scrutinizing the costs. If I were a buyer, I'd be upset about the disagreement, but I'd also be glad that the guy who's trying to deliver the project is not being seduced into making bad financial decisions.

@Cbot, I don't think we disagree that there is going to be a potentially extended wait for the tower to come alive again. I suppose our definitions of "dead" are different.... but I think there are many reasons why we can expect to see the next act of the Chicago Spire, even if there's a long intermission.

[cbotnyse]

Originally Posted by honte

@Cbot, I don't think we disagree that there is going to be a potentially extended wait for the tower to come alive again. I suppose our definitions of "dead" are different.... but I think there are many reasons why we can expect to see the next act of the Chicago Spire, even if there's a long intermission.

I understand, but a long wait really concerns me. Just think if you were a buyer or potential buyer. would you be willing to put up a million plus with so much uncertainty?

Thats assuming you dont need a mortgage. If you do need a mortgage, you better have 20% down and perfect credit. and be willing to pay almost 7% interest on a 30 yr loan! its so tough out there right now.

[Aleks]

That sucks.

[chi-arch]

Originally Posted by cbotnyse

good question. hopefully they read the fine print!

I know we have a waterview buyer (budman) on this board, maybe he would know. I'm assuming its different for each building though.

My deposit at Waterview has been in place for over 4 years and my contracts out-clause is in effect. Here's the problem: I can take back my deposit and will have made 1.5% APR on that money.(Whoopee)...or I can just hang on for another 2-1/2 to 3 years and continue to leverage the down payment against a much higher appreciation from my buy-in. I chose the latter scenario and will wait it out. There is no risk to the deposit and at this point 1.5% APR has been a better investment than 95% of my stocks. The potential appreciation for my deal can be enormous due to my early buy-in. I believe Budman is in the same boat as I am. People who have depsoits in the Spire will be faced with a similar situation as I am sure they were promised a delivery date of some sorts and may have negotiated an out-clause if the date is not met. As the project comes around it would appear to me that the early adopters of the Spire would be in the best position to benefit from their investment.

[cbotnyse]

Originally Posted by chi-arch

My deposit at Waterview has been in place for over 4 years and my contracts out-clause is in effect. Here's the problem: I can take back my deposit and will have made 1.5% APR on that money.(Whoopee)...or I can just hang on for another 2-1/2 to 3 years and continue to leverage the down payment against a much higher appreciation from my buy-in. I chose the latter scenario and will wait it out. There is no risk to the deposit and at this point 1.5% APR has been a better investment than 95% of my stocks. The potential appreciation for my deal can be enormous due to my early buy-in. I believe Budman is in the same boat as I am. People who have depsoits in the Spire will be faced with a similar situation as I am sure they were promised a delivery date of some sorts and may have negotiated an out-clause if the date is not met. As the project comes around it would appear to me that the early adopters of the Spire would be in the best position to benefit from their investment.

I agree. That is a saving grace right now. 1.5% is a hellva lot better than -30-80% in stocks. I do think both towers are a very sound investment right now, if you can afford to be patient.

[intrepidDesign]

edit

[honte]

Originally Posted by cbotnyse

Thats assuming you dont need a mortgage. If you do need a mortgage, you better have 20% down and perfect credit. and be willing to pay almost 7% interest on a 30 yr loan! its so tough out there right now.

Presumably, by the time it's sensible for the Spire to land financing, conditions would also be more favorable for the buyers... certainly, with delivery many years from now, no one is going to have to close under the conditions you describe (that is, expecting that the situation will improve).

[southlooper]

Thank God it isn't above ground. That would have been real embarassing. Like a Houston see thru building from the oil boon/bust days.

Put a cover over the gaping hole and a fork in this project. It's done.

Deal with it people. Our fancy architech is feuding with the Irish guy. No way they will be able to use his name to push the building. What does that do to the "prestige" factor?

I guess the Donald was right after all. Maybe Mr. Beanie Babies can get a good deal on a Trump penthouse?

[Aleks]

Hopefully, so when I become a billionaire I can buy the Chicago penthouse when it finally begins in 10 or so years.

[Loopy]

Originally Posted by southlooper

Thank God it isn't above ground. That would have been real embarassing. Like a Houston see thru building from the oil boon/bust days.

Put a cover over the gaping hole and a fork in this project. It's done.

Deal with it people. Our fancy architech is feuding with the Irish guy. No way they will be able to use his name to push the building. What does that do to the "prestige" factor?

I guess the Donald was right after all. Maybe Mr. Beanie Babies can get a good deal on a Trump penthouse?

Dealing with your arguments in reverse order:

"The Donald" is never right. He is always wrong.

"Our fancy architect" is simply protecting himself and his firm in a customary way that is to be expected.

"The Irish Guy" is just doing the dance of any good developer in a suddenly bad economy.

The only bad guys here are the Pig Men of Finance who have taken great risks and lost, only to retire to their spider holes in the Hamptons to await the clearing of their Federal Bailout transfers.

[budman]

I am in the same boat as chi-arch and am sticking with it for the same reason. As a general proposition, whether you can get your money back depends on the contract you negotiated with the developer. Some people negotiated a clause allowing them to back out of the deal if the unit is not deliverd by a particular date. And, even without that clause, I think that if the delivery date is many years later than what was originally estimated, a good argument exists for getting your money back (although in that circumstance, you may have to sue, which is expensive).

[Chicago_Forever]

Originally Posted by southlooper

Thank God it isn't above ground. That would have been real embarassing. Like a Houston see thru building from the oil boon/bust days.

Put a cover over the gaping hole and a fork in this project. It's done.

Deal with it people. Our fancy architech is feuding with the Irish guy. No way they will be able to use his name to push the building. What does that do to the "prestige" factor?

I guess the Donald was right after all. Maybe Mr. Beanie Babies can get a good deal on a Trump penthouse?

Mr. Trump, is that you?

Btw, there's an article on yochicago.com and I guess it's a response from Shelbourne.

[chicubs111]

Kelleher bullish on Chicago Spire despite Calatrava lawsuit
Sunday, October 19, 2008 By Gillian Nelis, Property Editor
Garrett Kelleher, the developer of the Chicago Spire, has said he remains ‘‘certain’’ that the scheme will be built, despite the fact that its lead architect Santiago Calatrava has stopped work on the project and is claiming to be owed over $11.3 million in overdue fees.



http://www.sbpost.ie/post/pages/p/st...872-qqqx=1.asp

[myshtern]

http://enr.construction.com/news/oth...SMContentSet=0

Architects place liens against the project

[trvlr70]

The Spire is a rollercoaster of a project: up and down and all over the place. At minimun, the project has created entertaining drama.