Image courtesy Shelbourne Development

Chicago Spire’s foreclosure lawsuits heat up as condo market remains frozen.

Foreclosure lawsuits mounting atop the $2-billion Chicago Spire project come at a time when the Windy City’s glut of condominium inventory has forced developers to make other deals.

In the near term, “I think any high-rise residential developments will be rentals,” says Gail Lissner, vice president of Appraisal Research Counselors, Chicago. A dozen rental high-rises are planned downtown, she says, including a 49-story tower that is being floated by luxury apartment developer AMLI Residential, Chicago.

As for condos, such as the 2,000-ft-tall Spire—which so far has produced only a spiraling design by famed architect-engineer Santiago Calatrava and a $38.6-million foundation that was installed in 2009—“there is no pipeline anymore,” says Lissner. “We’ve got about 2,400 units unsold. … It’s going to take another two to three years to absorb all this.”

The top five creditors suing the Irish developer of the Spire, Shelbourne North Water Street L.P., in Cook County court claim more than $118 million. Anglo Irish Bank Corp. holds the largest claim, $77.3 million, for a mortgage racking up $7,800 per day in interest charges.

Other creditors include Shelbourne’s in-house construction manager, Chicago Spire LLC, claiming $15 million; Calatrava’s Festina Lente (IL) Ltd., $11.3 million; Case Foundation Co., $10.4 million; and Perkins + Will, $4.8 million. Lorig Construction Co., Des Plaines, Ill., built ramps linking the Spire to Lake Shore Drive. It filed an initial foreclosure suit in July, claiming it is owed $512,386.