December 26, 2008 - The Chicago Spire may be about to lose its only private funding source with the potential nationalization of the Anglo Irish Bank. The bank has so far loaned $65.9 million to Garrett Kelleher of Shelbourne Development for the mega project. However, due to bad investments and insider loans amounting to $121 million to former bank chairman Sean FitzPatrick, the lender faces possible financial collapse if the Irish government doesn’t intervene, according to the Sun Times.

Anglo Bank stock has dropped in value to just .21 cents per share, and the new chairman is in favor of the government bailout. If approved, the Irish government would buy roughly $2.1 billion in bank stocks, which would give it a 75% stake in operations.

With no other lender as back up, Kelleher has been trying to line up other investors to continue with construction. But so far none have materialized and with the market still in turmoil it will be more than difficult to secure financing for a Chicago real estate project of this size. The Spire is also under the weight of several liens, including one from architect Santiago Calatrava.

According to the article, Shelbourne was able to get zoning approval for the 150 story high-rise because of the Anglo Bank’s promise that they would finance the tower without a minimum number of Chicago condo sales being on contract first. Normally banks require at least a 50% sales mark for Pre Construction Condos in Chicago before a construction loan will be approved. Shelbourne stated that around one third of the 1,200 luxury condos have been sold, including the much talked-about $40 million penthouse suite. But without any firm money to back the project, it is likely to remain stalled as it has for several months now and could possibly face foreclosure.

Technorati Tags: Chicago Spire, Chicago Condos, Chicago Real Estate

This entry was posted on Friday, December 26th, 2008 at 3:55 pm and is filed under Luxury Condos(t) . You can leave a response.