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Well let me rephrase that. its not 100% confirmed but its pretty darn close. The builder were offered money (over $125,000,000) from a top notch real estate company in Northbrook, no give backs or anything its a GIFT! the project just needs a final approval in court and it shall start.
I am quite sure this is NOT a gift by any stretch of the imagination. This is rather a speculative investment that is less a "vote of confidence" than a very calculated decision that the potential returns both from selling off what are likely to be record setting priced units AS WELL AS the boost to the reputation of a firm that can "bring something back from the dead" is enormous. The abilty to "unravel" deals that otherwise would be tied up in court is a HUGELY VALUABLE skill that lots of REITS will likely be eager to partner with Atlas down the road IF this thing works out.
Assuming that the cash needed to actually get the construction finished in a timely manner is actually liquid (and not tied to some goofy debt backed securities that could implode...) this COULD be a relatively "clean" deal. Of course the wisdom of any real estate management firm having that much CASH essentially "laying around doing nothing" as property values have soared, stocks have bounced back and other REIT are again HOT suggests that there may be little "we have been keeping things too consverative for too long" driving this deal AND that is never a great start to a "partnership" that may very well yet have to deal with potentially costly technical hurdles that likely will not be easy to solve with an architectural firm that believes it has not just be left unpaid but also embaressed by the failure of Kelleher to get this thing done right ...
The lynnbecker.com articles on the "problems" that Kelleher has always carried around regarding the SPEED with which he seems obsessed on this thing are still the definative resource. There are LOTS of questions that still have need to be answered. Folks like Calatrava himself and Perkins+Will that was supposedly the consultant architect on the thing have NOT BEEN PAID. Perkins+Will has never really done ANY cost estimates for this thing and the fact is I don't care if you are trying to repave a parking lot of build something ultra complex (and lord knows the RADICAL curly twists of the Spire will NOT be cheap) you cannot get any construction firms to actually submit proposals/ agree to work on the thing until AFTER they've reviewed the detailed data from the consulting architects that was used to arrive at the initial cost estimates. The reason is simple -- there are architectural firms that have LOTS of deep experience in working with the contractors that do things like pour concrete, erect steel, install exterior glazing and all the other "trades oriented" work that will be needed for project like this. It behooves all the big firms to understand just what data went into the estimates and how much of this sum the developer / development partnership actually has on hand SO that the BIG firm gets paid and does not get left having used its staff and firm's resource to crank out all the mounds of details needed AND THEN BEING LEFT holding the bag.
In some way this in not all that different of a home owner wanting a "kitchen remodel" being asked by the "general ccontractor" to see the plans, be given a deposit and have the home owner sign a contract of what all will be provided and the argreed to schedule of costs / payments...
Money, by itself, is not nearly enough to get things restarted...
Last edited by chet everett; 03-12-2014 at 03:06 PM..
I am quite sure this is NOT a gift by any stretch of the imagination. This is rather a speculative investment that is less a "vote of confidence" than a very calculated decision that the potential returns both from selling off what are likely to be record setting priced units AS WELL AS the boost to the reputation of a firm that can "bring something back from the dead" is enormous. The abilty to "unravel" deals that otherwise would be tied up in court is a HUGELY VALUABLE skill that lots of REITS will likely be eager to partner with Atlas down the road IF this thing works out.
Assuming that the cash needed to actually get the construction finished in a timely manner is actually liquid (and not tied to some goofy debt backed securities that could implode...) this COULD be a relatively "clean" deal. Of course the wisdom of any real estate management firm having that much CASH essentially "laying around doing nothing" as property values have soared, stocks have bounced back and other REIT are again HOT suggests that there may be little "we have been keeping things too consverative for too long" driving this deal AND that is never a great start to a "partnership" that may very well yet have to deal with potentially costly technical hurdles that likely will not be easy to solve with an architectural firm that believes it has not just be left unpaid but also embaressed by the failure of Kelleher to get this thing done right ...
The lynnbecker.com articles on the "problems" that Kelleher has always carried around regarding the SPEED with which he seems obsessed on this thing are still the definative resource. There are LOTS of questions that still have need to be answered. Folks like Calatrava himself and Perkins+Will that was supposedly the consultant architect on the thing have NOT BEEN PAID. Perkins+Will has never really done ANY cost estimates for this thing and the fact is I don't care if you are trying to repave a parking lot of build something ultra complex (and lord knows the RADICAL curly twists of the Spire will NOT be cheap) you cannot get any construction firms to actually submit proposals/ agree to work on the thing until AFTER they've reviewed the detailed data from the consulting architects that was used to arrive at the initial cost estimates. The reason is simple -- there are architectural firms that have LOTS of deep experience in working with the contractors that do things like pour concrete, erect steel, install exterior glazing and all the other "trades oriented" work that will be needed for project like this. It behooves all the big firms to understand just what data went into the estimates and how much of this sum the developer / development partnership actually has on hand SO that the BIG firm gets paid and does not get left having used its staff and firm's resource to crank out all the mounds of details needed AND THEN BEING LEFT holding the bag.
In some way this in not all that different of a home owner wanting a "kitchen remodel" being asked by the "general ccontractor" to see the plans, be given a deposit and have the home owner sign a contract of what all will be provided and the argreed to schedule of costs / payments...
Money, by itself, is not nearly enough to get things restarted...
Oh but if they were building it in the burbs you would be singing a whole different tune, wouldn't you Chet?
Oh but if they were building it in the burbs you would be singing a whole different tune, wouldn't you Chet?
The fact is that there is ZERO market for high rise condos in the burbs and MANY firms have been WIPED OUT trying even to get much less complex projects off the ground.
That said there has been a quiet little burst of new apartment construction in the I-88 corridor between Downers Grove / Lombard and Naperville. Mind you I don't personally like apartment complexes but the folks that build them aparently have been motivated by things like the considerable enrollments of the Downers Grove based Midwestern University that trains a large number of pharmicists, osteopathic physicians and related health career professionals. There is also a new UTI campus across from the Lisle based Navistar HQ (they moved from Warrenville into part of the old Lucent facilities) that probably will create demand for affordable apartments -- a different world than the multi-million dollar condos planned for the Spire!
I think I have mentioned before that from an aesthetic standpoint the design that Calatrava came up with is very striking but given the dominance it likely will have on the isolated penisula site and even the entire skyline this might as well be scheduled for Dubai or Kula Lampur ...
If it happens and if is successful I will not be upset nor particularly thrilled BUT if it gets started and then Kelleher AGAIN goes broke that will be an utter indictment of the lack of oversight that has come to symbolize the "build anything you can talk / bribe your alderman into" travesty that has become of Chicago's planning process that once proudly presided over a truly magnificent looking city...
The fact is that there is ZERO market for high rise condos in the burbs and MANY firms have been WIPED OUT trying even to get much less complex projects off the ground.
That said there has been a quiet little burst of new apartment construction in the I-88 corridor between Downers Grove / Lombard and Naperville. Mind you I don't personally like apartment complexes but the folks that build them aparently have been motivated by things like the considerable enrollments of the Downers Grove based Midwestern University that trains a large number of pharmicists, osteopathic physicians and related health career professionals. There is also a new UTI campus across from the Lisle based Navistar HQ (they moved from Warrenville into part of the old Lucent facilities) that probably will create demand for affordable apartments -- a different world than the multi-million dollar condos planned for the Spire!
I think I have mentioned before that from an aesthetic standpoint the design that Calatrava came up with is very striking but given the dominance it likely will have on the isolated penisula site and even the entire skyline this might as well be scheduled for Dubai or Kula Lampur ...
If it happens and if is successful I will not be upset nor particularly thrilled BUT if it gets started and then Kelleher AGAIN goes broke that will be an utter indictment of the lack of oversight that has come to symbolize the "build anything you can talk / bribe your alderman into" travesty that has become of Chicago's planning process that once proudly presided over a truly magnificent looking city...
What is "not to get"? Over the past decade or so there have been more than a few nasty failures of financal backers of come MAJOR projects that littered Chicago with unfinished buildings for extended periods. A more thorough / professional planning process that had sufficient financial safe guards in place would prevent these kinds of fiascoes ...
The legitimate architectural bloggers that watch Chicago estimate that it could well take several BILLION dollars to build the Calatrava design. Ain't no way you can realistically recoup that kind of investment on the timeline that any existing REIT has ever seen. If Kelleher once had access to that kind of money then why did things go into recievership / bankruptcy court? Lots and lots of unanswered questions.
Last edited by chet everett; 03-12-2014 at 06:00 PM..
I am quite sure this is NOT a gift by any stretch of the imagination. This is rather a speculative investment that is less a "vote of confidence" than a very calculated decision that the potential returns both from selling off what are likely to be record setting priced units AS WELL AS the boost to the reputation of a firm that can "bring something back from the dead" is enormous. The abilty to "unravel" deals that otherwise would be tied up in court is a HUGELY VALUABLE skill that lots of REITS will likely be eager to partner with Atlas down the road IF this thing works out.
Assuming that the cash needed to actually get the construction finished in a timely manner is actually liquid (and not tied to some goofy debt backed securities that could implode...) this COULD be a relatively "clean" deal. Of course the wisdom of any real estate management firm having that much CASH essentially "laying around doing nothing" as property values have soared, stocks have bounced back and other REIT are again HOT suggests that there may be little "we have been keeping things too consverative for too long" driving this deal AND that is never a great start to a "partnership" that may very well yet have to deal with potentially costly technical hurdles that likely will not be easy to solve with an architectural firm that believes it has not just be left unpaid but also embaressed by the failure of Kelleher to get this thing done right ...
The lynnbecker.com articles on the "problems" that Kelleher has always carried around regarding the SPEED with which he seems obsessed on this thing are still the definative resource. There are LOTS of questions that still have need to be answered. Folks like Calatrava himself and Perkins+Will that was supposedly the consultant architect on the thing have NOT BEEN PAID. Perkins+Will has never really done ANY cost estimates for this thing and the fact is I don't care if you are trying to repave a parking lot of build something ultra complex (and lord knows the RADICAL curly twists of the Spire will NOT be cheap) you cannot get any construction firms to actually submit proposals/ agree to work on the thing until AFTER they've reviewed the detailed data from the consulting architects that was used to arrive at the initial cost estimates. The reason is simple -- there are architectural firms that have LOTS of deep experience in working with the contractors that do things like pour concrete, erect steel, install exterior glazing and all the other "trades oriented" work that will be needed for project like this. It behooves all the big firms to understand just what data went into the estimates and how much of this sum the developer / development partnership actually has on hand SO that the BIG firm gets paid and does not get left having used its staff and firm's resource to crank out all the mounds of details needed AND THEN BEING LEFT holding the bag.
In some way this in not all that different of a home owner wanting a "kitchen remodel" being asked by the "general ccontractor" to see the plans, be given a deposit and have the home owner sign a contract of what all will be provided and the argreed to schedule of costs / payments...
Money, by itself, is not nearly enough to get things restarted...
This project would cost many, many billions, and you would never find a bank to finance the current design.
Real estate financing is still extremely tight, and bilionaire mega-developers in NYC and London and Hong Kong have trouble lining up 500 million for a project. You think this house painter from Ireland, who never built a thing in his life, is going to borrow 3 billion for a project in Chicago, when he has no reputation, has declared bankruptcy, and can't even get half the per square foot sales prices as in those cities? LOL.
I don't want to see that garbage in our skyline...
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Not at all...
