- Ron Clarkson
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AFL-CIO May Ride to Chicago Spire’s Rescue
A rather unexpected source may rescue the stalled Chicago Spire condominium project – and pump significant money into Chicago’s battered economy by creating thousands of construction jobs. Representatives from the AFL-CIO Housing Investment Trusts are in early discussions with developer Shelbourne Development Group to revive construction of the twisting Santiago Calatrava-designed condominium tower, located on a high-profile 400 North Lake Shore Drive site.
According to Tom Villanova, president of the Chicago and Cook County Building Trades Council – which represents 24 trades locally – talks with Irish developer Garrett Kelleher started in January and are still in the very early stages. “The main thing is jobs,” according to Villanova. “We can use our own funds to benefit members. The Spire is going to be five years of construction, which is just phenomenal for us. It’s thousands of jobs.” If the deep-pocketed investment fund does invest in the Chicago Spire’s construction, the project would be a 100 percent union job.
The AFL-CIO has three investment trusts, including the Building Investment Trust. This pooled real estate fund has more than $2.5 billion in assets as of the 4th quarter of 2008. It was created in 1988 to provide risk-adjusted returns for participants, as well as a way to create commercial real estate construction jobs. To date, the fund has invested more than $1 billion in Chicago projects.
It’s a fascinating twist in the populism which is currently shaping our economy. As the country has lost 4.5 million jobs since December of 2007 and seen billions of dollars of abandoned projects, the idea of addressing the two in one bold stroke is fresh and original. With TALF addressing the securities side of the business, and the Department of Housing and Urban Development, Fannie Mae and Freddie Mac only funding a narrow group of product types, the idea of tapping the pension funds to capitalize major projects that generate employment for the AFL-CIO’s members is definitely worth exploring.