Aug. 13 (Bloomberg) -- Bank of America Corp. sued Shelbourne Development Group Inc., which started to build and then halted construction on the planned 150-floor Chicago Spire condominium tower, claiming the company has defaulted on a loan.

The Charlotte, North Carolina-based lender, in a lawsuit filed today at the U.S. District Court in Chicago, said it’s seeking $4.9 million in principal, interest and associated fees and expenses from Shelbourne and its chairman, Garrett Kelleher, who is said to have guaranteed the obligation.

Shelbourne failed to show Bank of America last year that it had obtained an irrevocable construction loan commitment from a lender or lending syndicate, leading the bank to declare a default, according to the complaint.

Located on the north side of the Chicago River close to where it meets Lake Michigan, the Spire was planned to be the tallest building in North America. The elongated spiral structure was designed by architect Santiago Calatrava.

The planned 2,000-foot (610-meter) building would contain 1,194 residences, making it the world’s tallest residential tower, according to a fact sheet issued by the developer.

Each floor of the twisting structure rotates 2.4 degrees, making a full 360-degree turn as it rises. Shelbourne had said it sold more than 30 percent of the apartments in the building.

Foundation in Place

Work on the project stopped late last year after the cylindrical foundation was dug and reinforced.

“It’s on hold,” the developer’s outside spokeswoman, Kim Metcalfe of Weber Shandwick, said in a phone interview. Shelbourne is “waiting for the economy to rebound” before proceeding, Metcalfe said.

Calatrava and the Chicago-based architectural firm Perkins & Will have each filed liens against the project to ensure payment, she said. Each of those claims, and the bank’s lawsuit “will be addressed in the order they were filed,” Metcalfe said.

Chicago is already home to the tallest building in North America, the Willis Tower. Formerly known as Sears Tower, the 110-story building was renamed last month after the London-based insurance broker Willis Group Holdings Ltd. agreed to lease more than 140,000 square feet of space on three floors.

The retailer now known as Sears Holdings Corp. moved into the building in 1973, remaining there for 19 years before relocating to suburban Hoffman Estates.

The case is Bank of America NA v. Shelbourne Development Group Inc. 09cv4963, in the Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew M. Harris at the federal court in Chicago: aharris16@bloomberg.net.

Last Updated: August 13, 2009 18:26 EDT