It is July 1960. John F. Kennedy is days away from winning his party’s nomination for president. In Chicago, Republicans will soon nominate Richard M. Nixon to run against him.

The price tag for Marina City reads $36 million – $23 million for the residential phase and the rest for the commercial phase. In 2010 dollars, that would be $265 million total.

George H. Dovenmuehle, chairman of Dovenmuehle Inc., a large mortgage-banking firm in Chicago, expressed interest in financing the residential phase. Dovenmuehle would issue a mortgage loan of $17,819,100 with a term of 39 years and maximum interest rate of 5.25 percent.

The loan amount represented 49 percent of the total cost of $36 million. A separate loan of $5 million would be obtained to build the office building. Another $13,180,900 would come from private investors. These included the Building Service Employees International Union, Chicago Local 1, Local 32B in New York, and the union’s pension trust, which had headquarters on the west coast.

The mortgage insurance, payable in case of default, came from the Federal Housing Administration.

The amount initially approved by the FHA was the most it could commit to – a limit that was intended for two or three-apartment buildings – but it was still about $1 million short of what was needed for the 896-apartment Marina City.

Both Charles Swibel, the developer, and Marina City’s architect, Bertrand Goldberg, went to work on the FHA.

According to Goldberg, with less than 24 hours left on the option to buy the land, which was contingent on the project winning FHA approval, he convinced the director of the FHA’s Chicago office, John Waner, to increase its commitment by showing him the money could be raised by increasing rents fifty cents per month. John Warner (center) from the February 1976 issue of Ebony magazine.

Swibel, meanwhile, was handling most of the negotiations with the FHA. Using his networking skills, he had convinced Mayor Richard J. Daley to speak with U.S. Representative Daniel Rostenkowski (Democrat, Illinois), who then put Swibel in touch with the FHA.

According to his son, Howard, it was Swibel who convinced the FHA to increase its mortgage insurance limit.

A government guarantee of the mortgage was necessary because the equity the union pension fund had in the project was relatively low. This limited equity would come back to haunt the union. Marina City arguably was not a successful investment. “It was a disaster,” says Swibel. “Because the equity was so thin and there was so much borrowing, plus there were cost over-runs.”

On July 7, 1960, as test borings for the foundation were being made, the FHA issued its largest commitment yet of $17,819,100 to the Building Service Employees International Union.

“So, with an FHA guarantee,” says Howard Swibel, “you can go to a bank and the bankers are not going to be at risk – you got a down payment and then you’ve got this FHA guaranteed loan.”

The down payment on the mortgage could have been as low as five percent.

By obtaining from private investors the $17,819,100 mortgage for the residential towers, the project saved $800,000, according to Charles Swibel, himself a mortgage banker. This is because of a commitment by 19 financial institutions in the eastern United States – a group led by Institutional Securities Corporation – to purchase the mortgage. They were originally to get a seven percent discount but because of the private investment this was lowered to three percent.

Financing was not completed until September 1, 1961, when it was announced that Continental Illinois National Bank and Trust Company would loan the project $5 million toward the $10 million office building. Construction of the office building would start the next month.

Waner, meanwhile, would go on to be director for the Chicago area of the U.S. Department of Housing and Urban Development when the FHA became part of HUD in 1965. He would later run for Mayor of Chicago, losing to Daley in 1967.