Architect Santiago Calatrava has filed a lien against developers of the Chicago Spire alleging that he has yet to be paid the $11.34 million for his work. Chicago architectural firm Perkins and Will—charged with local oversight of Calatrava's designs—has also filed a lien and is seeking $4.85 million in unpaid fees, according to reports in the Chicago Sun-Times .
Conceived as the world's largest residential tower, Dublin, Ireland-based Shelbourne Development's curving, 150-story Spire has encountered major set-backs in getting off the ground. Although foundation work is mostly complete, the developer announced on Sept. 17 that the pace of construction would slow significantly until the economy recovers from the subprime lending crisis.
Earlier this summer, the company embarked on an international road show to presell units, but the venture wasn't as successful as the firm had hoped: Roughly two-thirds of the Spire's 1,200 condos have yet to be sold. The slow sales pace has severely affected Shelbourne's ability to access construction lending in an already anemic debt environment.
Shelbourne spokesperson Kim Metcalfe did not immediately respond to requests for comment, but she did tell the Sun-Times that the liens reflect a contractual dispute with Calatrava and do not indicate that the project is in financial trouble. Many local and national developers have scoffed at that claim including Donald Trump, who pointed specifically to the Spire as his company topped off the Trump International Hotel and Residences in Chicago last month, claiming that his building was the last of its breed.
"If you don't have an A next to every single one of your line items, I'm not sure how you are going to get development done," says Tony Rossi, president of Chicago-based RMK Management, who is having difficulty getting construction lending for his own downtown rental tower despite a 35% equity and assurance buy-in by a major pension fund. "The Spire? I don't think it will get financed. I don't see how they will get the construction loan."
Superstructure construction on the Spire is scheduled to begin in mid-2009. Shelbourne has yet to name a general contractor for the project.
Chris Wood is a senior editor at MULTIFAMILY EXECUTIVE magazine.
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