Crews will break ground in 2007 for the proposed twisting, “drill bit” skyscraper at 400 N. Lake Shore Drive–but the building that rises there will look substantially different from its designer’s original vision.

Dublin-based developer Garrett Kelleher has supervised a complete redesign of the original plan to make it economically feasible. The previous plans included a broadcast antenna at the building’s top and a 150-room hotel at its base, both of which have been scrapped. The tower is taller (150 stories) and wider now, with a total of 3 million square feet–1.8 million of them sellable space.

The tower’s footprint has also been adjusted slightly to the north, putting it just north of North Water Street. That change makes room for a circular drive south of the tower, as well as a grand plaza at the end of the riverfront promenade leading to Lake Michigan from Michigan Avenue.

Santiago Calatrava confirmed that he has signed a contract with Kelleher for full design and construction supervision services.

The building’s revised design has a simplified top, with metal “fins” protruding slightly above the roof. It has also been given a less twisty shape, with a total rotation of only 270 degrees compared to the original’s full 360.

To avoid ruining the tower’s looks, a planned six-story parking garage will be replaced with seven levels of underground parking.
Chicago real estate, Chicago condos, luxury condos, Lake Shore Drive condos, Streeterville

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A spokesman for Garrett Kelleher, the developer of the proposed 124-story spire on the lakefront, revealed Wednesday that the residential building will be marketed to the world’s wealthiest buyers. Kelleher is executive chairman of Shelbourne Development Ltd. in Dublin.

Chicago attorney Thomas Murphy, speaking for Kelleher, said the building should command condominium prices far above the Chicago market’s upper limits.

Last July, Garrett Kelleher spent $64 million on the rights to the spire project’s site at 400 N. Lake Shore Drive. The renowned Spanish architect Santiago Calatrava has agreed to continue as the lead architect after starting work on the building for a previous developer. The Chicago firm Perkins & Will will direct the architecture locally.

Many experts have judged the narrow, twisting Chicago Spire to be prohibitively expensive to build. Murphy said the building will need to set condominium asking prices far above the Chicago market’s current limits.

He would not provide a range, but did not argue an interviewer’s suggestion that the developer might ask $2,000 a square foot. The top current prices in Chicago range from just above $1,000 a square foot for residences to about $1,200 a square foot for hotel rooms sold as condos.

“We are looking at raising the bar quite a bit,” Murphy said, adding that construction is slated to begin before June 2007.

The building would reach 2,000 feet in height, replacing the Sears Tower as the tallest in Chicago and, for now, the United States.

One Chicago developer with experience in high-rise construction doubted Kelleher would be able to sell units at prices that are, in his words, “off the planet.” When told about the comment, Murphy replied, “They’re not off the planet. They may be off the continent.”

Murphy said Chicago prices seem amazingly cheap to buyers from Europe. Kelleher, who spent a decade living here, plans to market Chicago as a good place for jet-setters to invest in a second home.

Murphy backed off from previous estimates setting the building’s cost at about $1.2 billion. Kelleher is committed to it regardless of the final amount, Murphy said.

Chicago real estate, Chicago condos, luxury condos

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Buyer-incentive programs have become the norm in new-construction real estate. As the market has continued to soften, developers have been offering everything from free parking to free appliance upgrades to plasma TVs in an effort to jack up flagging sales.

The rise in the number of these incentive offers is due to developers pricing their homes beyond what the market is willing to pay says Tracy Cross, housing analyst with Tracy Cross & Associates.

According to Cross, builders are trying to avoid lowering prices in their developments–but the incentive programs won’t stop the slowdown in real-estate sales.

Buyers who are waiting for more and more attractive incentive programs–like the rare and elusive 0% financing offer–will most likely be disappointed, Cross added.

“[The deals] will begin to abate rather steeply beginning early next year [2007],” he said. “The reason is that most incentives were applied to units under construction, and they were the result of builders getting ahead of themselves.”

Cross predicted that deals might still be available in the southwest suburbs, but only in markets where builders had originally overpriced their homes. Deals will be rare or absent in the north and northwest suburbs.

Whatever the future of incentive programs might be, if you’re currently in the market for a Chicago home you might want to look into some of the incentive deals available right now:

Van Buren Lofts (1224 W. Van Buren Street) has 1, 2 and 3BR condos and penthouses for sale from the $250s to the $560s. The developer is promising buyers a free washer and dryer, paid closing costs, no assessments for one year, $3,500 in upgrade credits and free rate buydowns.

- University Commons (1000 W 15th Street) is unconditionally offering free parking to buyers of its 1BR and 2BR lofts (priced from the $250s to $350s).

- 1555 Wabash (1555 S. Wabash Ave.) is guaranteeing that–until the end of 2006–the interest rates buyers lock into will not increase more than 1% from contract-signing until closing. The development offers 1BR, 2BR, and penthouse condos from the mid-$200s to the low $600s.

- Lexington Park (2128 S. Indiana Ave.) has 1BR & 2BR condos from the low $200s, and is now giving buyers a free home-entertainment package that includes a 42-inch plasma TV, an iPod docking station and two speakers.
Chicago condos, Chicago real estate, builder incentives

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