Posts tagged with "Bankruptcy":

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UPDATE: Related wrests control of Chicago Spire site from Garrett Kelleher

spire UPDATE [3:00 P.M.]: Related now has control of the Spire site, after embattled developer Garrett Kelleher transferred the deed Monday night. Related withdrew their claim in U.S. Bankruptcy Court following the transfer, reported the Chicago Tribune. They haven't released plans for development or sale of the notorious site, but President Curt Bailey issued this statement:
We are pleased to have resolution on 400 N. Lake Shore Drive, the site of the former Chicago Spire project.  We recognize the importance of this site to the City of Chicago and look forward to creating an architecturally significant and thoughtful development befitting this premier location. We are proud to have a long track-record of developing landmark buildings with world-class architects like 840 N. Lake Shore Drive, 500 N. Lake Shore Drive, Park Tower, 340 on the Park and most recently, 111 W. Wacker Drive.  We look forward to continuing that legacy on this marquee site.
-- Halloween came and went last Friday, and with it so may have developer Garrett Kelleher's chance at reviving the Chicago Spire, an ambitious supertall project that faltered during the recession and left an empty cofferdam at 400 North Lake Shore Drive. Under the terms of an earlier settlement in bankruptcy court, Kelleher's company, Shelbourne North Water Street, was required to make a payment to Related Midwest by midnight Saturday. When it did not receive the payment, Related promptly filed papers with U.S. Bankruptcy Court in Chicago to wrest control of the prime real estate from Kelleher. Last year Related moved to buy the dormant project's mounting debt, but part of Related's development team later sued Kelleher for more than $95 million in guarantees for the project. Kelleher surprised many observers in February by offering bullish statements to the media and stirring rumors of a second chance for the Santiago Calatrava–designed skyscraper. Friday's missing payment undercuts those claims. As the Chicago Tribune's Mary Ellen Podmolik reported:
Related, arguing that Shelbourne breached an already approved settlement and the confirmed bankruptcy plan by not making a payment or handing over the deed, wants U.S. Bankruptcy Court Judge Janet Baer to order Shelbourne to relinquish the deed to the 2.2-acre site.
It looks increasingly unlikely that the Spire will rise again. Under Related's control, however, the downtown location could see some sort of development—if not the audacious starchitecture for which it was intended. A court hearing on the motion is scheduled for the morning of November 4.
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Detroit doubles down on startups and young creatives with new “innovation district”

As Detroit nears the one year anniversary of the largest municipal bankruptcy filing in U.S. history, creative professionals in a busy downtown corridor are the target of a Washington, D.C.–funded “innovation district" that hopes startups will rev Detroit's stalled economic engine. Bruce Katz and Jennifer Bradley's book for the Brookings Institution, The Metropolitan Revolution argued that since Congress is frozen, cities must save themselves. In a follow up report, the authors argued for the creation of “innovation districts” to encourage startups and business incubators. Detroit Mayor Mike Duggan last month announced the city’s first such district would comprise a stretch of Woodward Avenue from the riverfront to New Center. The area has previously been branded a “creative corridor,” and already enjoys a growing startup culture—most of it formed organically. So what will the new designation change? Perhaps nothing by itself. But as Crain's Detroit Business reported, clusters of young professionals are happy to have the spotlight:
"The thing we have realized is that we actually have districts within this creative corridor geography," said Matt Clayson, director of DC3, a partnership between the College of Creative Studies and Business Leaders for Michigan. "There is a certain density of creative practioners [sic] that we did not have four years ago. That's a good 1,100 creative workers. Four years ago, no." … When Patrick Thompson was looking to open his interior design studio — which is well known for designing the Detroit Institute of Arts' Kresge Court — he was interested in being in Midtown. He didn't realize there was a creative cluster forming, but he liked the activity on the street and wanted to be around other design businesses. So when a first floor retail spot in The Auburn building opened, he moved in last summer. "As a landmark alone, it's been great," he said. "Everyone is starting to know this area. It's a pretty high-profile area, so it's been beneficial for our business being there."
The three clusters with the most activity at the moment, writes Amy Haimerl for Crain's, are around Grand Circus Park, near Cass and Canfield Streets, and near DC3 and TechTown Detroit in the city’s New Center neighborhood. Mayor Duggan convened a 17-person panel to chart more innovation clusters around the future and help guide growth in existing creative communities. As must be noted with any story of rebirth in Detroit, the city’s challenges are beyond the ability of any one intervention to overcome. But “innovation districts” are far from the only solution proposed for Detroit’s problems. Immigration reform, perhaps tied to a special city-specific Visa, has been touted as a potential shot in the arm for the struggling city. And transit improvements, especially along Woodward Avenue—which now has national attention—are a long time coming.
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Chicago Spire developer moves to settle bankruptcy, revive project

spire Chicago’s stalled supertall Spire could rise again, according to the Irish developer who went into foreclosure in 2010 after a protracted legal battle over the project. Garrett Kelleher’s lawyers on Thursday filed papers in U.S. Bankruptcy Court seeking court approval to move ahead with the Chicago Spire, which remains a hole in the ground at 400 North Lake Shore Drive. Kelleher said a $135 million investment from Atlas Apartment Holdings would allow him to settle bankruptcy claims in full but, as reported in the Chicago Tribune, the court filings don’t say how much more money would be needed to fund the construction of the 2,000-foot-tall condo skyscraper. The twisting tower would have been the largest in the western hemisphere, but the project fell apart in the aftermath of the financial crisis. Skyward-looking Chicagoans, however, never went long without some speculation of the Spire’s resurrection. In June last year, Related Cos. of New York signed on to buy the project's debt. But an affiliate of Related later sued Kelleher for more than $95 million in guarantees involved with the project. According to the plan proposed Thursday, Kelleher’s firm Shelbourne North Water Street would put forward a reorganization plan by August 31 to bring the project out of bankruptcy, potentially transferring the property to Atlas. "We have been working with Garrett Kelleher over the past several months and now share his belief and vision in the Chicago Spire," said Steven Ivankovich, CEO of Northbrook-based Atlas, in a statement. Kelleher seemed optimistic as ever about the project’s sky-high ambitions. "Given the ongoing recovery in the Chicago property market, the timing is better now than when this project commenced," Kelleher said in a statement. "I am delighted to have found a partner who believes in the project as passionately as I do."
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As Detroit Struggles With Bankruptcy, Auction House Appraises Prized Art Collection

Even as Detroit’s municipal bankruptcy reverberates among residents and onlookers alike, the city’s art scene shines on. Unfortunately for the Detroit Institute of Art, red ink may yet claim its city-owned collection. This week the museum confirmed Christie’s Appraisals had been hired to appraise a portion of the cultural institution’s holdings. But an appraisal is not a sale. The city’s art collection includes work by Rodin, Van Gogh, and Cézanne. The museum denied the possibility of a fire sale, saying in a statement:

We continue to believe there is no reason to value the collection as the Attorney General has made clear that the art is held in charitable trust and cannot be sold as part of a bankruptcy proceeding. We applaud the [Emergency Manager]’s focus on rebuilding the City, but would point out that he undercuts that core goal by jeopardizing Detroit's most important cultural institution.

Christie’s, too, deflected scrutiny of what many perceived as the beginning of the end for a proud collection of art. “We understand that a valuation of all the City’s assets (extending well beyond the art) is one of the many steps that will be necessary for the legal system to reach a conclusion about the best long term solution,” they said in a separate statement, adding their goal is to advise on "how to realize value for the City while leaving the art in the City’s ownership.” The auction house’s assessment doesn’t mean all or even any of the 60,000-piece collection will be sold or even leased (some are off-limits anyway if their original benefactor stipulated they can never be sold). Assessment would be the first step in a such a process, but it could also mean Emergency Manager Kevyn Orr is just showing creditors that all options are on the table. Financial experts speculated to The Christian Science Monitor that sales of city land or infrastructure, such as its sewer system, could be better bets. Detroit’s municipal bankruptcy is the biggest by far in U.S. history, so Orr’s decisions—whatever they may be—are anyone's guess, and will doubtless be the subject of intense scrutiny.
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Illinois Developer Plans To Buy Detroit’s Dilapidated Packard Plant

Detroit’s Packard Automotive Plant is one of Albert Kahn’s most well-known designs. But while this 3.5 million-square-foot behemoth remains iconic, it’s not exactly enduring. Collapsed roofs, asbestos, and an ocean of debris (apparently navigable) are among the foreclosed property’s less attractive qualities. But Bill Hults thinks a $350 million renovation project could revive the plant, which closed in 1956, perhaps positioning it at the center of a metro-area rebound. The Illinois developer has plans to buy the massive, dilapidated factory for $974,000 in unpaid taxes. But as Bill Bradley writes for Next City, Hults’ own unpaid debts ($50,000 according to Hults) may compound the challenges inherent in rehabbing a building so far gone. On the bright side, the building does have strong bones of reinforced concrete. And Albert Kahn Associates could help restore their namesake’s historic design. Funding for the project is unclear. Some projects in Detroit have united disparate donors, developers, and aggressive government incentives to green light otherwise unlikely projects. But if this proves to be a turning point for the Packard Plant, long one of Detroit’s living examples of the city’s precipitous rise and fall, its timing may prove poignant; on Thursday Detroit became the largest city in the country to file for bankruptcy.
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SHoP Floats

One of the many flashy architecture projects believed to have been killed off by the recession was SHoP's highly impressionistic proposal for the waterfront portion of the South Street Seaport. The bankruptcy of mall owner and would-be developer General Growth Properties seemed to scuttle plans for the sail-and-net-inspired complex, but having emerged from court protection, GGP is evaluating what to do with its remaining properties and it appears SHoP may once again be in the mix. The company is being spun off into two pieces following its bankruptcy, with the one made up of mixed-use and development-worthy projects getting a $6.55 billion infusion from three outside investors. It remains up to this new person what to do with the Seaport, but a GGP spokesperson tells Downtown Express, “Presumably the new company would continue to pursue the highest, best use of that property, which we felt was the proposal we put out." Should the project return, there is still the issue of appeasing the Landmarks Preservation Commission, which saw it as more barnacle than beautiful.
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Another Gehry Ghost

Burdened by more than $3 million in debt, the Pasadena Playhouse closed its doors on Sunday. The nonprofit company intends to “explore viable options of financial reorganization, including bankruptcy, to determine a responsible solution for its ongoing operations,” according to a statement. While the theater’s fate is resolved, the Mission-style building itself, designed by Elmer Grey (who also designed much of CalTech’s campus) in 1925, will be protected, since it’s a California state landmark and owned by the city of Pasadena. But the situation doesn’t bode well for the two-phase project that Frank Gehry had agreed to undertake for the playhouse pro bono. That work included a renovation of its balcony performance space, the Carrie Hamilton Theater, and the creation of a new 300-400 seat theater across the street. This adds to the large number of recently-scuttled or held projects for Gehry Partners. They include: the Grand Avenue project in LA; Atlantic Yards in Brooklyn; the Museum of Tolerance in Jerusalem; and the King Alfred Center in Hove, England.