The property developer that tried to build the tallest residential building in the world sued Ireland’s “bad bank” for more than $1bn this week, claiming it had pulled the plug on the project out of “sheer spite”.
Lawyers for Shelbourne North Water Street, the developer behind the Chicago Spire project, filed a lawsuit against Ireland’s National Asset Management Agency (Nama) and National Asset Loan Management body (Nalm) at a US district court in Illinois on Monday, according to a filing seen by EG.
The Chicago Spire was planned to be a 2,000 ft tall, iconic residential development on Lakeshore Drive in Chicago architect Santiago Calatrava. If completed, with almost 3m sq ft of floor space, the building would have been the tallest residential building in the world; the then-tallest building in the western hemisphere and the then second-tallest building in the world.
Nama was established in 2009 by the Irish government to purge the country’s banks of more than €70bn of risky loans after a property crash almost caused a banking collapse.
According to the court filing, Shelbourne was owned by a US limited liability company know as Miltown, which was itself owned by Irish real estate investor Garrett Kelleher.
“For many years prior to the world financial crisis of 2008, Anglo Irish Bank Corporation (‘Anglo’ had provided real estate acquisition and development financing to many of the Kelleher owned companies, including Selbourne,” the filing said.
However, following the financial crisis, Anglo was no longer able to fund the real estate projects it had be involved with and therefore disappeared as a funding source for the Chicago Spire.
The filing claims that Kelleher presented plans to Nama, which had become responsible for the debt, that would have led to the completion of the project. However, Nama chose to sell on the debt, causing Shelbourne to abandon the project.
“Shelbourne could have refinanced and completed construction of the Chicago Spire were it not for the sheer spite of certain of Nama’s principals towards Garrett Kelleher, the driving force behind the Chicago Spire and in the manner Nama, and its associate Nalm, demonstrated consistent incompetence and lack of concern for the Irish taxpayer,” law firm bringing the claim said in a statement.
If the case goes to trial, it would be the first time that Nama would face a jury. A number of Nama executives are likely to be subpoenaed.
“Whatever untrammelled powers and influence Nama might enjoy in Ireland, it has no special status here,” said J Joseph Bainton, Barclay Damon partner and lead attorney in the Chicago Spire case.
“We are confident that a Chicago jury will return a verdict awarding Shelbourne damages in a sum that redresses in full measure the consequences of Nama’s unlawful activities,” he said.
The case is being brought by law firms Barclay Damon and Freeborn & Peter.
Shelbourne North Water Street Corporation f/k/f Shelbourn North Water Street LLP -v- National Asset Managment Agency and National Asset Loan Management, Statutory bodies of the Republic of Ireland.
Filed in the United States District Court for the Northern Distric of Illinois, Eastern Division 26 February 2018
