The Reality Song

I don’t want to beat up on Garrett Kelleher and his Chicago Spire all the time, but the guy makes it so easy. Monday night he and architect Santiago Calatrava addressed a full house at the Chicago Architecture Foundation’s headquarters, ostensibly to present the building Kelleher wants to erect just west of Lake Shore Drive across from Navy Pier. Give Kelleher credit; it was nice of him and Calatrava to spend the time with the CAF members and docents discussing the Chicago Spire.

But the reality is all he has are drawings, and even those aren’t in final form yet. He hasn’t sold a single condominium unit and he has no outside investors, other than the bank that financed the land acquisition. Despite this, he insists he will break ground this spring. Don’t hold your breath.

At the CAF forum, Kelleher did not come across as any kind of sleazy developer. He seems like a genuinely nice and charming fellow, and he obviously has a strong desire to see this project completed. After all, as proposed the Chicago Spire would be by far the biggest jewel in his development portfolio, a career capper that would take its place in the Chicago skyline—the world’s best skyline—in between icons like the Sears Tower and the Hancock Center. But Kelleher has one problem he can’t avoid: He doesn’t have the money to build the thing.

A project like this, with 150 floors and some 1,300 condominiums, built in an unconventional style close to the lake on what is essentially very old landfill, could cost $2 billion, or more. Monday night, Kelleher admitted he’s paid for everything thus far, although he said Anglo Irish Bank is “fully committed” to the project. He did not explain what that means. In fact, he didn’t say much about the financing at all, and it was at this point during the meeting, the question-and-answer session, that Kelleher effected his best impersonation of a typical developer’s sleazy non-answer answers.

When asked about the nature of the financing, he said, with an Irish lilt, “Debt and equity. That’s about it.” Gee, thanks, professor. Debt and equity. That’s funny.

So who are his investors? Who’s committed money to this thing? Well, there’s himself and … Anglo Irish Bank. That’s it. Kelleher hasn’t even begun pre-selling the condo units. Later he said all of the money that has been spent thus far, for land acquisition and whatever architectural and engineering fees have accrued, has come from his own pocket. Kelleher is no doubt quite wealthy, and by many accounts he is a gutsy and shrewd businessman who has been underestimated any number of times, perhaps none moreso than when he burst on the scene in London in 2004 as the winning bidder (at €355 million, or about $468 million at today’s exchange rate) for the Lloyd’s of London building.

Other than financing the initial purchase of the property, the nature of Anglo Irish Bank’s commitment to the Chicago Spire project is unclear. The bank has a reputation for maintaining a fairly conservative financing portfolio, but last year it took a chance on a major renovation of the Palmer House Hilton by arranging nearly $363 million in financing for developer Joseph Sitt.

Anglo Irish Bank is making a push into the Chicago real estate market after opening an office here in October. It is Ireland’s third-largest bank, and has been performing well financially. In addition to the Palmer House financing, the bank recently put up nearly $93 million as part of a joint venture with Golub & Co. to buy 625 N. Michigan Ave. Golub, you may have heard, has its own problems, having been “removed” from the job of developing the residential portion of the long-troubled Block 37 project, according to a story in Tuesday’s Tribune.

The bank and Kelleher apparently have worked together before, according to a news release from Kelleher’s Shelbourne Development issued when Kelleher bought the 400 N. Lake Shore Drive property last year. The story of how Kelleher came to own the property says a great deal about how he’s approaching this project, it seems. As he related the story Monday night—and he has told the same story in the past—he happened to be in Chicago at about the time Christopher Carley of the Fordham Company, the spire’s original developer, was supposed to be closing on the deal to buy the land. Carley hit a snag, though, and as Kelleher said, “Without getting into details, circumstances presented themselves that I could close on the property in a short time. . . . I could buy it.” So he did. He learned about the opportunity on July 12, 2006 and closed the deal on the 20th, having done no due diligence other than look at a previously prepared environmental report. Then he went on vacation.

The site, he said, spoke for itself. It was a once-in-a-lifetime opportunity to build something grand in a stupendous location, and to work with Calatrava, who is generally referred to as one of these modern-day “starchitects” along the lines of Renzo Piano and Frank Gehry. Calatrava, for his part, had nothing but nice things to say about Kelleher, who is, of course, paying him. I suppose as long as Calatrava continues to get paid on time he will continue to have nice things to say about Kelleher.

Both men clearly see this as their big chance to impact the architecture and development worlds forevermore. A building like the Chicago Spire is the kind of structure that can define men, cities, even eras. If it gets built, that is, and there is still a mountain of evidence to suggest it won’t.

Last year Kelleher said he wanted to be in the ground with caissons by early 2007. In January he raised eyebrows, and a few hackles, at a meeting of the Grant Park Advisory Council by saying he would be starting to dig caissons within weeks, a statement that made it seem like he had the plan commission in his pocket and that approval was a slam dunk. Even in Chicago some folks—especially those who will live in the building’s shadow—didn’t take kindly to the notion that construction had already been approved. We do appreciate at least the appearance of due process here. At any rate, now here it is mid-March, nearly April, and still no caissons.

If I were a betting man, I would say this project would probably be approved by the mouth breathers at the Department of Planning and Development, despite the fact it’s totally out of scale with the surrounding area and will create a traffic nightmare in Streeterville. They probably like the renderings that show it in the skyline, and think it would perhaps add something to the city’s Olympic bid. But then the weeks will tick by and nothing will happen. Eventually the thing will die quietly and Kelleher will sell the land and something else, still probably too big and too expensive, will be built there.

And yet … and yet Kelleher keeps showing up in Chicago. Maybe he’s hoping to spur interest, and thus sales. More likely he genuinely believes construction will start any day. I think he’s sadly mistaken. A worst-case scenario would be he starts to dig, or maybe even gets a few floors built, before he runs out of money.

The world is about to change. We are groping through the twilight of the American Dream, or at least the perverted 20th Century version of the American Dream. It used to be the American Dream was that everyone could make it, could be successful, regardless of where he or she came from, or how poor. There were any number of different ways to measure “success” and somehow, probably through the co-opting of our lives by marketers, the dream morphed into just one measure of success: home ownership. As the century went, so went the American Dream and before long the dream became a McMansion in the suburbs and three SUVs.

And so it was that we became a disposable nation of cheaply-built strip malls, drive-through fried food emporiums, cinder block warehouse stores and slapdash houses. Everyone deserved a shot at this new American Dream, just like every student deserves an “A.” In the grand tradition of the American West, mortgage speculators appeared offering 100% financing to everyone at appealingly low interest rates. Well, they were appealingly low so long as the Federal Reserve didn’t get uppity. But the Fed did get uppity and now those so-called adjustable rate mortgages have adjusted—upward. One result of that is a growing number of defaults on what are known as sub-prime mortgages, in other words risky home loans that in any moderately intelligent climate never would have been approved in the first place.

And so now we get to ask which is worse: never having the chance to own a home, or having your home taken from you when your minimum-wage jobs as a clerk at Wal-Mart and a grillman at Wendy’s don’t provide enough money to keep up with the rising monthly payments?

Ah, but never mind. We were talking about the Chicago Spire, not the American Dream. Except that the Chicago Spire is Garrett Kelleher’s American Dream, and probably Santiago Calatrava’s, too. And for between $1,200 and $9,000 per square foot—Kelleher’s giggle-inducing price range—the condos could be versions of the American Dream for thousands of residents. That’s certainly what Kelleher is expecting. He said everywhere he goes around the world, the Chicago Spire generates interest. People apparently are excited to think about living there, although probably not full time. The answer to the oft-asked (at least by me) question, “Who’s going to buy all these condos they’re building all over the city?” is apparently “Very rich people who want a second, or third, home.”

There exists right now in this country a massive amount of disposable income, across various social strata. A great many more people have a lot of money now than did, say 10 years ago. And the elite who already had a lot of money 10 years ago now have a great deal more than they did then, provided they aren’t in jail.

Condos and houses are to the rich today what cars were 25 years ago. You own three or four, in different places, and use whichever one happens to be in the place you want to go at that particular time. You want a weekend in New York, you fly in and stay in your condo on Central Park West. Gonna be in Aspen? Fly in and drive to your cabin there. Coming to the Taste of Chicago, just come downtown and “check in” to your very own place, which otherwise stays dark 300 days out of the year. What a wonderful sense of community that builds, eh?

And when some or a lot of that wealth, much of it based on derivatives contracts that, in a financial crisis, won’t be worth the paper they’re printed on, evaporates, what will become of all these new high-rise condominiums? I suppose they’ll be dark the other 65 days out of the year.

But we’ve gotten off the topic again. My feelings about the Chicago Spire are no secret (see “Chicago Uninspired”). Nothing presented at the CAF meeting Monday night changed my mind. Calatrava is living in a dream world. He interspersed his rough watercolor renderings of the nearby planned DuSable Park with photos of Zurich, where he lives now. Many of the ground-level perspectives didn’t represent reality in terms of what effect the presence of a 150-story tower would have. Calatrava kept saying he wanted the lobby to be transparent. He wants glass walls and artwork inside and a big plaza. That’s fine. But what about that giant twisting dildo looming over everyone and everything? The height it, and its mass, do affect the surrounding area, no matter how glassy the lobby is.

Calatrava mentioned he wants seven massive building supports in the lobby. Seven. For the whole building. One bomb and suddenly there are six supports, folks. So, either the plaza isn’t going to be as accessible as it has been presented, or the lobby isn’t going to be as transparent. When you build something like this, security does enter into the equation. Just ask the folks in charge of the Freedom Tower in New York City. That thing is a 1,400-foot-tall obelisk sitting on a 300-foot high impenetrable pedestal. That should relate to the street nicely, don’t you think?

The other thing about showing slides of the park in Zurich, and of Zurich neighborhoods, is that it leaves out the bald fact that Zurich is a traditional old European city full of low- and mid-rise buildings. There are no 150-story skyscrapers casting shadows and looming over everything. Good planning is about context, and so far none of the renderings of the Chicago Spire have offered anything resembling context. Calatrava talked a lot about a “symbiotic relationship” between the tower and the site, but none of the drawings he showed explained how that would work. He showed some photos of his “Turning Torso” skyscraper in Malmo, Sweden, but those only served as examples of a stark out-of-context design. See for yourself.

The long and the short of it is Kelleher can’t build this as things stand now. I don’t expect circumstances to change much for the better. Economically things may actually get much worse, but I’d be surprised if they stayed the same or changed in a way that allowed this project to move forward. There is no doubt Kelleher and Calatrava are committed to the Chicago Spire; they proved that much Monday night at the CAF meeting. But sooner or later reality is going to collide with ambition. To paraphrase John Cougar Mellencamp, when you fight reality, reality always wins.

The Indignant Citizen