Lender puts a hold on Michigan Avenue project

The lender on a Helmut Jahn-designed skyscraper planned for 1000 S. Michigan has temporarily pulled funding for the project, making it the biggest Chicago development so far to be stymied by economic worries tied to the coronavirus pandemic.

Goldman Sachs has put a 90-day hold on construction funding for the $470 million building and will revisit the matter in September, the developers said. They said buyers of the 74-story building’s condo units have been offered part of their deposits back.

Goldman is “concerned about economic stability of the market at this particular time due to recent events,” Time Equities Chairman Francis Greenburger said Tuesday. New York-based Time Equities is developing the building with JK Equities and Oak Capitals.

Any big investment in real estate has run headlong into the deep recession caused by the business shutdowns state and local governments have ordered to control the coronavirus. In the case of Jahn’s building, the funding delay calls into question the viability of a 421-unit tower that would be Chicago’s largest new condo building since the last recession in 2008.

Greenburger, who did not specify the amount of Goldman’s funding, said he will explore other financing options in the meantime. “We remain hopeful that this graceful iconic structure will one day help define the skyline of Chicago,” he said.

In June, the developers stopped foundation work at the site to prevent any spread of COVID-19, even though construction projects have been deemed “essential” and have proceeded under Gov. J.B. Pritzker’s shutdown rules. The project was expected to be done by late 2022. Quoted prices for the units ranged from $313,000 for a studio to $8.1 million for a four-bedroom penthouse.

At 832 feet, it would be Jahn’s tallest building in Chicago. His work here has included the James R. Thompson Center in the Loop, which state government wants to vacate and sell for development, and the United Airlines terminal at O’Hare Airport.

Greenburger said buyers have signed contracts for about a quarter of the building’s units but it has taken a long period of pre-sales to get to that point. The developers got the city’s go-ahead for the project in 2016.

The delay for the project was first reported by the Chicago Tribune.