About 15 years after a planned 2,000-foot-tall skyscraper along Lake Michigan was halted by the Great Recession, a different developer is close to securing $510 million in construction financing to kick off construction of the first of two residential towers on the former Chicago Spire site.
Related Midwest said Friday it plans to begin construction of a 72-story apartment tower on the site at 400 N. Lake Shore Drive in 45 days, bringing the long-anticipated project close to the starting line at a time when major projects throughout the country have proved difficult to finance amid rising interest rates, soaring construction costs and broader economic challenges.
It will bring life to one of Chicago’s most infamous construction sites, a property that has mostly remained dormant since the financial crisis that abruptly halted construction of Irish developer Garrett Kelleher’s planned 150-story condo tower that was designed by Santiago Calatrava.
All the remains from the Spire project is a 76-foot-deep foundation that was dug before construction stopped on the site as financial markets all but melted down in 2008.
Related Midwest’s project, which will bring a major new presence to the lakefront skyline, is designed by David Childs — best known for One World Trade Center in Manhattan — and the Chicago office of Skidmore, Owings & Merrill. The architect of record is Stantec.
Both phases are expected to create about 1,110 residential units combined.
Affordable Housing Lender
Related’s first phase, a 857-foot-tall tower, will be financed with loans from the Illinois Housing Development Authority, an agency that finances affordable housing. That height is scaled back slightly from a plan that was approved by Chicago’s City Council a few months into the COVID-19 pandemic in 2020.
The 635-unit north tower will have 20% of its apartments set at affordable rents.
Related is close to finalizing $510 million in debt from the authority, which finances affordable housing projects through the issuance of bonds that will then be sold to investors. For this project, the bonds will be sold to Wells Fargo Bank, according to the agency’s board minutes from July, when the funding was approved.
Loans are expected to be finalized by the end of this year, IHDA Deputy Director Andrew Field said in an email to CoStar News. “400 N. Lake Shore Drive will provide 127 affordable units in an area that traditionally does not see low rents, providing access to Streeterville, Lake Michigan and downtown Chicago to renters usually priced out of the neighborhood,” Field said in the email.
Talk of Related kicking off the project has ramped up in recent weeks, with Alderman Brendan Reilly of the 42nd Ward and the Streeterville Organization of Active Residents recently holding a meeting to discuss the start of construction. Crain’s Chicago Business on Friday reported the 45-day timeline for starting the project.
Second Tower Possible
The timing of the planned second phase, an approximately 765-foot-tall tower, will depend on market conditions, Related said.
As part of the project, the developer will pay $10 million toward a long-planned completion of nearby DuSable Park.
“Related Midwest looks forward to bringing to life the iconic sister towers at 400 Lake Shore Drive as well as the 3.3-acre DuSable Park for all of Chicago to enjoy,” Related Midwest President Curt Bailey said in a statement. “Positioned on the last waterfront site where Lake Michigan meets the Chicago River, the development of this site will strengthen the city’s connection to the River and Lake Michigan through the creation of beautiful public spaces and spectacular residences that will be a great new addition to the Streeterville neighborhood.”
Related has controlled the 2.2-acre site since 2014, after the previous developer’s bankruptcy.
In March 2020, just days before pandemic shutdowns, Bailey said in a public meeting about the project that Related hoped to start work on what was then described as a $1 billion project by early 2021.
Towers were proposed for 1,100 and 850 feet tall before that plan eventually was scaled back to 875 and 765 feet.
The first phase is expected to be completed in the third quarter of 2027.
Related’s general contractors are LR Contracting and Bowa Construction, the same firms that recently completed The Row Fulton Market. It is the tallest building in the city’s former meatpacking area west of the Loop business district.