The next chapter in the long-running saga of the Chicago Spire site will be written during the next few weeks, as creditors get their say in developer Garrett Kelleher's plan to exit bankruptcy protection and restart the project.
During hearings in U.S. Bankruptcy Court last week, Judge Janet Baer approved the distribution of Shelbourne North Water Street LP's proposed bankruptcy plan to creditors for voting. She also established the timetable for how events will unfold this fall to determine who will control the future of the coveted site at 400 N. Lake Shore Drive.
By Sept. 29, creditors must submit votes on the plan and all objections to it myst be filed. A hearing on the plan’s confirmation is scheduled for Oct. 7.
If the Chapter 11 reorganization is confirmed, Kelleher can proceed with a project stalled six years ago that was designed to bring 1,194 condos and 1,420 parking spaces to the site, which remains a fenced, circular hole in the ground.
As negotiated by Kelleher’s Shelbourne, Atlas Apartment Holdings LLC and Related Midwest, the plan calls for Atlas, an apartment developer and manager, to provide up to $135 million, either from its own money or with lenders and investors, to pay bankruptcy claims.
Kelleher would remain part of the project, but Atlas would become the majority owner of the Spire site.
Related Midwest, which was party to the proposed plan submitted to the court, is entitled to receive by Oct. 31 $109 million, plus additional money Shelbourne borrowed in bankruptcy financing. Shelbourne also has the option of deferring that payment to March 31, 2015 if it chooses to pay $22 million on Oct. 31 and $92 million-plus by the end of March.
If the payments are not made, or if Shelbourne opts not to proceed with that plan, Related Midwest, the developer behind several high-end apartment high-rises in Chicago, will take title to the property and can develop it.