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Yesterday afternoon, a lengthy Reuters feature about stalled construction projects around the world showed up in our RSS reader. Buried near the bottom of the 900-word article was an update on Shelbourne Development’s ongoing efforts to secure financing for the planned 150-story Chicago Spire.
“Construction unions are negotiating to invest their pension funds to kickstart the project,” Reuters reported, adding that, “the Spire would provide 1 million paydays for ironworkers, carpenters and others.”
We weren’t the only ones who noticed that item. This morning the Chicago Tribune reported that representatives from the AFL-CIO Housing Investment Trust will meet with Shelbourne today to discuss dipping into the trade union’s pension fund to finance the twisting tower.
Tom Villanova, president of the Chicago and Cook County Building Trades Council, says talks are still in an “embryonic stage,” but the prospect of resuming work on the project would be good for local construction. “The Spire is going to be five years of construction, which is just phenomenal for us. It’s thousands of jobs,” Villanova told the Trib.
Despite appearances, Shelbourne is still actively marketing the building, says Spire spokeswoman Kim Metcalfe. “Clearly, the construction of the building is on pause, but nothing else about the building has stopped,” Metcalfe told the Trib.
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Not surprising; I believe the cement companies like Ozinga and Prairie have been investing in several loop area projects for years, so indirectly some of the crafts have already been doing some of this. But, let’s hope some economic risk assessment backed judgement is used. What’s to stop these guys from using their influence to come crying for a bailout later?
Does anyone think there are buyers willing to pay 1500/sf anymore for this product. Even if this is completed with pension money in 5 years or so, buyers will still be hard to come by at these price points.
This makes a lot of sense on many levels. Any long term investor with cash on hand (i.e. a pension fund) could do a lot worse than investing in real estate right now. There is also the additional benefit of creating work for their members, which sends some of the money back to them as dues.
What’s so new or shocking about this? Marina City was built to make work for the janitorial union (seriously).
its awesome……hope it will happen, would be great to see the same thing over at waterview tower also!!
I’m obviously an outsider to any discussions between the Spire and the unions, but I’d be shocked if a nickel of union pension funds found its way into this project.
Luxury condos have not been the type of projects that pension trusts have favored investing in, especially one as speculative as this. The projects have, typically, been rentals – which is how Marina City started. Check the About us page of the AFL-CIO HIT for a read on what projects it participates in.
There are plenty of other local projects unions could finance.
They missed out on their chance for the meters:)
What a freaking racket that is.
That’s not a smart thing to be doing with the union’s seed-corn. Not at all.
“Joe, the Unions are investors in Trump Hotel and Towers.
Don’t you consider that one “Luxury”.
Gregg
Gregg,
The Trib article is the first and only reference I’ve seen to union investment in the Trump Tower. No detail was given as to the nature or size of the investment – or whether it was only in a commercial piece of the Trump project.
The total assets of the fund refered to are $2.5B, with $1B of that in Chicago investments.
Fund trustees have an obligatoin to diversify assets which would bar an investment that would be sizable enough to move the Spire forward.
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