Real Estate Development
The Chicago Spire
The Chicago Spire was a planned 150-story, roughly 2,000-foot residential tower designed by Santiago Calatrava for a site on the Chicago River, which would have been the tallest building in the Western Hemisphere. Developer Garrett Kelleher broke ground in 2007 and excavated a deep circular foundation hole, but the 2008 financial crisis froze the credit markets the project needed to fund construction above grade. Work never resumed. The hole sat empty and fenced in downtown Chicago for years, a well-known local landmark of failure, until Kelleher lost the site to creditor Related Midwest in 2014.
- Company
- Shelbourne Development Group
- Started
- 2005
- Ended
- 2014-11
- Planned height, which would have made it the tallest building in the Western Hemisphere
- 2,000 ft / 150 stories
- Estimated loss
- Estimated: $93,000,000 [7]
- Collapse speed
- Gradual
- Preventability
- Medium
- Lesson transfer
- Industry-wide
- Last reviewed
- 2026-08-21
Narrative
The story
The ambition
In 2005 the Fordham Company proposed a supertall residential tower for a riverside parcel at 400 North Lake Shore Drive in Chicago. After Fordham could not line up financing, Irish developer Garrett Kelleher and his firm Shelbourne Development Group took over the site in 2006, renamed the project the Chicago Spire, and hired the Spanish architect Santiago Calatrava to design it. Calatrava produced a twisting, spiraling 150-story tower of roughly 2,000 feet and about 1,193 condominiums. Chicago's Plan Commission and City Council approved the design, and the finished building would have been the tallest in the Western Hemisphere and one of the tallest in the world.
The rise
Construction began in June 2007. Crews excavated a large circular foundation pit on caissons drilled into bedrock, a hole that would eventually become the site's most visible feature. A sales center opened and the project reported strong early interest, with hundreds of units reportedly under contract, including a widely reported penthouse purchase by Beanie Babies creator Ty Warner. For a stretch of 2007 and early 2008, the Spire looked like a real project on its way up, a marquee Calatrava tower rising over the Chicago River.
The cracks
The Spire's economics rested on a fragile sequence: Kelleher had committed the project's equity and was counting on presales and a future construction loan to fund the tower once it rose above the foundation. That financing was never locked in before the ground shifted under the entire industry. Ground had broken just as US and global credit markets began to tighten, leaving the project almost no buffer before the crisis that arrived in full force in 2008.
The collapse
The 2008 financial crisis froze the credit markets the Spire depended on. Anglo Irish Bank, the project's primary lender, came close to collapse itself amid Ireland's banking crisis, cutting off the Spire's main line of credit. Construction stopped for good not long after the foundation work finished. Calatrava placed a multi-million-dollar lien over unpaid fees, and other creditors sued Shelbourne over unpaid loans and lease payments. The excavated hole sat empty and fenced in one of downtown Chicago's most visible spots for years, becoming a well-known local symbol of the project's failure. Years of litigation and failed refinancing attempts followed, and on October 31, 2014, Kelleher missed a court-ordered payment deadline to creditor Related Midwest, which had acquired the project's debt. Control of the site passed to Related Midwest, which said it would not build the Spire.
The aftermath
Related Midwest held the vacant site for several years before unveiling its own, far less ambitious plans in 2018: two towers designed with the firm Skidmore, Owings and Merrill, initially proposed at roughly 1,100 and 850 feet, combining condominiums, rental apartments, and a boutique hotel, at an estimated cost of about $1 billion. The new plan was smaller and slower-moving than the Spire had been, but it finally gave the long-idle hole a path toward being filled.
The lessons
The Chicago Spire is a case of a project whose financing structure had no margin for a downturn. Kelleher secured the land, the equity, and a marquee architect, but the plan to fund construction above the foundation depended on credit markets and unit sales staying open long enough to bridge the gap. When the 2008 crisis hit, that bridge collapsed, and there was no fallback. A supertall tower is a multi-year undertaking that must survive whatever the credit cycle does in the middle of it, and a financing plan built only for good conditions is not a financing plan for a project of this size and duration.
Causal timeline
Failure Anatomy
- 2006
Fordham proposes a supertall, Kelleher takes over
Christopher Carley's Fordham Company proposed a residential tower for the site in 2005; after it could not secure financing, Irish developer Garrett Kelleher's Shelbourne Development Group acquired the project in 2006 and renamed it the Chicago Spire. [1]
- 2008
- 2008
Financial crisis halts construction
The 2008 financial crisis froze credit markets and brought lender Anglo Irish Bank to the edge of collapse; construction stopped, and Shelbourne faced liens and lawsuits from Calatrava and other creditors. [5]
External shockDebt burden - 2008-2014
Years as "the hole"
The excavated foundation sat empty and fenced in downtown Chicago for roughly a decade, becoming a well-known local symbol of the project's failure. [6]
- 2014-10-31
Kelleher loses the site
Garrett Kelleher missed a court-ordered payment deadline on October 31, 2014, and control of the site passed to creditor Related Midwest, which had acquired around $93 million of the project's debt and said it would not build the Spire. [7]
Debt burden - 2018
Related Midwest unveils a smaller replacement
In 2018 Related Midwest and architecture firm Skidmore, Owings and Merrill unveiled plans for two much smaller towers on the site, an estimated $1 billion project combining condos, apartments, and a hotel. [8]
Structured analysis
What Went Wrong
Root causes
The 2008 financial crisis froze financing. The global credit crunch that began in 2008 froze the construction financing markets just as the Spire needed to move beyond its foundation work, and the project's primary lender, Anglo Irish Bank, came close to collapse itself. [5]
Construction financing was never secured. Kelleher had committed the project's initial equity and counted on presales, but the syndicated construction loan needed to build the tower above grade was never locked in before credit markets seized. [4]
Contributing factors
Ground broken at the top of the cycle. Construction began in June 2007, just as US and global credit markets were beginning to tighten, leaving little buffer before the 2008 crisis arrived in full force. [2]
Heavy reliance on a single troubled lender. Anglo Irish Bank, the project's primary lender, was itself brought to the edge of collapse by Ireland's banking crisis, cutting off the Spire's main source of credit at the worst possible moment. [5]
Immediate trigger
Credit markets seize in 2008. The 2008 financial crisis froze the credit markets the Chicago Spire depended on for construction financing, halting work for good shortly after the foundation caissons were completed. [5]
Visible symptoms
Liens and lawsuits pile up. Calatrava placed a multi-million-dollar lien over unpaid architectural fees, and other creditors sued Shelbourne over unpaid construction loans and lease payments as the project stalled. [5]
An empty, fenced hole downtown. The excavated foundation sat visibly idle in the heart of Chicago for roughly a decade, a constant public reminder that the project had failed. [6]
Warning signs
No construction loan lined up before the crisis. The project had equity and presales but had not secured the syndicated construction financing needed to build above the foundation before credit markets turned in 2008. [4]
Affected groups
Evidence
Claims & sources
Every numbered marker in the analysis links to the claim it rests on, and each claim to its sources.
- [1]
Christopher Carley's Fordham Company proposed a residential tower for the site in 2005; after it failed to secure financing, developer Garrett Kelleher's Shelbourne Development Group acquired the project in 2006, renamed it the Chicago Spire, and hired Santiago Calatrava to design a roughly 2,000-foot, 150-story tower that would have been the tallest building in the Western Hemisphere.
- [2]
Construction began in June 2007 with a large circular foundation excavation on caissons drilled into bedrock; reported excavation depth varies by source, from roughly 66 feet (about 20 meters) to 78 feet.
- [3]
A sales center opened and the project reported strong presale interest, including a widely reported penthouse purchase by Beanie Babies creator Ty Warner for about $40 million.
- [4]
Although Kelleher had committed the project's initial equity, the Spire depended on future construction financing and unit sales to fund building above the foundation, and that financing was never secured once credit markets froze.
- [5]
The 2008 financial crisis halted construction; primary lender Anglo Irish Bank came close to collapse amid Ireland's banking crisis, and Shelbourne faced liens and lawsuits, including one from Calatrava over unpaid architectural fees.
- [6]
The excavated foundation sat empty and fenced in downtown Chicago for roughly a decade, becoming a well-known local symbol of the project's failure.
- [7]
On October 31, 2014, Garrett Kelleher missed a court-ordered payment deadline of $22 million to creditor Related Midwest, which had acquired roughly $93 million of the project's debt; control of the site passed to Related Midwest, which stated it would not build the Spire.
Sources
Santiago Calatrava's Chicago Spire Finally Axed
ArchDaily · 2014-11-05
The site of the failed Chicago Spire may host two new towers
Time Out Chicago · 2018-05-16