Aborted Chicago Spire developer Garrett Kelleher has lost a legal battle in his fight to recover $1.2 billion from his failed project, after U.S. District Court Judge Andrea Wood said she lacked jurisdiction because the claim was against the Irish government’s National Asset Management Agency (NAMA), part of a foreign state.
However, an attorney for Kelleher, whose vision for a 150-story condo tower ended up as a big hole during the 2008 financial crisis, has indicated that an appeal is possible.
NAMA, created to dispose of Irish banks’ bad loans, took over about $90 million in debt and sold it to Chicago developer Related Midwest, Crain’s Chicago Business reports. The developer, which took control of the site at 400 N. Lake Shore Drive through a 2014 bankruptcy auction, unveiled plans for a two-tower project at the site last year.
Kelleher had planned what would have been the tallest residential building in the world, reaching 2,000 sq. ft. He ran out of money after the financial markets collapsed.
The suit argued that NAMA never should have sold the debt to Related Midwest because Kelleher had agreed to pay $57 million more for the debt, money that would have gone to Irish taxpayers. The sale to Related Midwest prevented Kelleher from saving the project, wiping out his $1.2 billion investment and expected profit, the legal filing said.
In her 18-page opinion, Wood said her court had no jurisdiction because NAMA is part of a foreign state.
“We believe respectfully that the decision overlooks material facts and reflects legal errors that will be timely addressed appropriately before the District Court and, if necessary, before the Court of Appeals,” an attorney for the Kelleher venture, J. Joseph Bainton, partner in the New York office of Barclay Damon, wrote in an email to Crain’s.
NAMA, meanwhile, “is very pleased with the outcome,” a spokesman wrote in an email.
Related Midwest unveiled plans last year for two towers on the Spire site, one rising 1,100 feet, including condominiums, apartments and a hotel.
Crain’s reports that Downtown Ald. Brendan Reilly (42nd) rejected that plan last October and told Related Midwest to submit a revised proposal, raising concerns about the hotel and other issues. A Related Midwest spokeswoman was not immediately available for comment.