It was a tough call to make, I imagine, as the city doesn't want to scare away foreign investment by taking such actions too frequently. But the current developer has held it since 2009, has a poor track record with other such properties, hence I think it was the right thing to do.

I'd like to strangle Davies.

Ugh. Davies rightfully deserves all the hate but this is a perversion of our Constitution. There are potential public uses of the building that would justify eminent domain (new train platforms, for example) but the city is not pursuing these.

Also, how does Rahm figure that no public funds will be used?

This will turn into a lawsuit, no doubt about it.

Redevelopment has been recognized as a proper public purpose since Berman v. Parker, 348 U.S. 26 (1954).

20 bucks says Rahm has something brewing behind the scenes.

I disagree. All the building code violations make it a no-brainer to take the property back. Sitting on a building that's vacant and a blight to the city to add to that makes me happy to see him lose his ownership. We need to learn from Liverpool

I agree. Perhaps he's talking to Walgreens and Sterling Bay?

This is a totally legal use of emminent domain, it's not even stretching the definition. This building is undoubtedly blighted and the owner refuses to do anything about it. The city could probably even condemn this building if they wanted given the outstanding building violations. What's more is that the owner has been approached with multiple reasonable offers and has turned them down in favor of putting the property on the market with an obscene purchase price. I've dealt with a lot of Brits and the way business is conducted in the USA and Chicago in particular is totally foreign to them. They come from a place where land is basically universally scarce and the notion that a multi million square foot building isn't worth hundred of millions of dollars must be impossible for Davies to reconcile in his mind. Unfortunately for him he has now drawn the ire of the city and things don't typically end well for property owners whom the mayor has painted a target on.

The city has a right to fine Davies something like $10,000 a day for each day violations go uncorrected. If they want to they can simply say "alright Davies, you had 10 violations for 1000 days, now we have a $100,000,000 lien on the property" and he's done. Of course he doesn't understand that because the whole system overseas is different, but if I were him I would be running to Sterling Bays office with a signed copy of their previous offer in hand.

God. I really hope that Sterling Bay be one of the possible people who takes this over. They probably have the actual ability to do something with the property, unlike Davies. Now, if Walgreens were to move their HQ downtown to a renovated Post Office, it would be also amazing.

Don't you think we need to move beyond the flawed and racially-motivated urban renewal laws of the 1950s and 60s?

The ruling you mentioned concerns DC's effort in the 50s to tear down virtually all of Southwest - the poorest, most heavily African-American part of the city at the time - to forcibly gentrify it. Hardly a model for responsible government action.

^^^ You have to admit that stripping Davies of a valuable asset that he is preventing from being developed is a bit different than clear cutting an entire neighborhood, even if the underlying legal reasoning is identical. We've generally learned a lot of lessons the hard way and haven't really repeated them since. Now we have the problem of suburban style auto oriented developments cropping up in the voids left by ill advised urban renewal schemes. We don't have a problem with the city stripping non-domicile tycoons of assets they are squatting on.

I highly doubt that there haven't been multiple long conversations between the city and Sterling Bay about this. I have a feeling the spurned Stearling Bay deal was the beginning of the end for Davies. You don't turn down the reasonable offer from the hometown hero in Chicago unless you have a much much better idea and are ready to move on it now. I see it all the time, out of town interests try to play a game, the city shuts them down. Again, in Chicago it's shit or get off the pot if you own a critical asset.

^You don't even need to go back as far as Berman v. Parker. Kelo v. New London in 2005 affirmed that eminent domain can be used for redevelopment that promises economic growth... including private use...

It doesn't matter what effects (or motivations) the early urban renewal statutes had. The Supreme Court ruled in 1954 that redevelopment of blighted areas was a valid public purpose. And in Kelo, the Court ruled that whether eminent domain for redevelopment was wise was not a constitutional question, but one to be determined by local officials.

The Heritage Foundation and other right-wingers promptly labeled as judicial activism the Supreme Court's decision to keep the law exactly what it already was. They raised holy hell about the Court not engaging in judicial activism (by substituting its judgment for that of the New London city council).

A number of states followed Kelo by substantially restricting redevelopment statutes, or eminent domain generally. Illinois was not among them.

Does anyone else wish that Netflix or Hulu would revive that Starz series "Boss" with Kelsey Grammar to finish off the story arc? I really enjoyed the show and didn't like that it was kind of left hanging.

Sterling Bay hired a law firm a few months ago to push the city to take action. No doubt they still have plans for the post office.

I'm sure this move is legal but just sets a terrible precedence for investors. As with everything in Chicago I'm sure there was some heavy political reasons behind it. Sure Davies isn't doing anything with it but it's also a massive project. Not shocking that in 6 years he couldn't get a $1+billion project started. If Related, Fifield or Sterling Bay did the same thing I'm quite certain Rahm wouldn't be making the same push. Davies just isn't very good at playing the Chicago game.

Not sure if I agree with that. It shows investors that if they're serious about a property they're buying, to actually either do something with it or make sure it's kept up to code. They've been cited for not just a few building/health violations - but many of them. I think if this was just some 20 unit building, the city wouldn't care. We're talking about what was at least at one time the largest post office with huge economic redevelopment potential.

Hell, Davies even said he expected construction to start this year. How is anyone supposed to take him seriously?

Let's not forget that Davies is not a serious developer, and has a track record of this.

I don't think this action by the city will scare away outside investment.

This is the typical strategy the City uses to motivate absentee land owners, especially those who have large prime locations. It sends a message that it's time to start the develop process and/or partner with someone who can help you get it done. The City probably feels that this developer has missed the current development cycle, but needs to start gearing up for the next. The same strategy was used on the Riverside Site. DPD made the legislative move of placing the site on the acquisition list (within the River South TIF), and one year later threaten to issue an RFQ (seeking qualified developers to purchase the site). The owner, or majority owner (a London billionaire who's on the U.S. no-fly-list) partnered with Related or is in the process of working out a deal.

British developer won't give up Old Main Post Office without a fight

http://chicago.suntimes.com/news/7/7...-without-fight

:koko:

YES, but not only because it was an awesome series, but they used my home to film scenes of one of the main characters... the $$ were awesome also :)

Hahahahaha, talk about delusional developer. Eminent domain this idiot and develop this blight ASAP Rahm

While true, and who knows - this kook could finally give in and be persuaded by this city action to come to terms with Sterling Bay and sell to them in the next few weeks (and he certainly has no longer than that - if he even has that long) - this isn't an idle threat. The law is very clearly on the city's side here - it has quite broad powers of eminent domain (for public benefit - not merely public use.....and there is very ample case for that here).....whether anyone agrees with the city's powers here or not is beside the point, because the law at present says the city does have this power. They just have to give whatever notice the law states and provide "just compensation" (which one has got to admit, might be interesting in this case to see how low the city (really Sterling Bay of course in the end) can get away with in its compensation.......


Addendum: I'm not sure if the city necessarily feels that this project has missed the current property cycle. If they do, they perhaps shouldn't necessarily feel so. This economic/property/construction cycle will have longer legs than many suspect.....I'm looking for at least a few more good years, and perhaps up to a couple more on top of that..........

Ha... Welcome to Chicago jackass!

^^^ Lol, who buys real estate in a market (and apparently entire country) you don't understand at all? The unique feature about Chicago in this case is that the city is relatively proactive in not putting up with bullshit like some more pliant governments in small government States. This is just how the law works here and there is nothing you can do about it. Uncle Sam giveth (literally in this case) and the Boss taketh. You got your turn, now you're done.

Hes lucky we aint breaking his knees for good measure.

Did Davies inherit all his wealth? He clearly doesn't know what he is doing.

The City will move forward to acquire as quickly as possible, but it won't happen overnight. Davies will fight, and eventually lose unless he partners with someone, or sell. By the time it's settled, this development cycle will be over.

The move by the City is positive and will result in movement in the redevelopment process. I believe Davies will feel the pressure.

nvm

Unpaid property taxes on Old Post Office at $627,000 and counting
Alby Gallun - Crain's Chicago Business - 3/4/2016

http://www.chicagobusiness.com/reale...600000-in-back

I'm shocked, shocked, to find that a person who lives in a tax haven is delinquent on his taxes. Should make it even easier for the city to seize it through eminent domain.

I know very little about property law, but wouldn't not paying one's taxes make it as simple as filing an eviction from the Mayor's office, or something of that sort? I feel like this makes taking the Post-Office back extremely simple

No. First of all, the county collects property taxes, not the city. Second, there's a process that has to be followed when seizing delinquent property, including a redemption period when the delinquency can be cured. Then the delinquent property normally must be auctioned to the highest bidder.

Interesting, so what would be the fastest legal approach to reclaim the Post Office then? Or is that the route they are likely to take

Illinois allows "quick-take" eminent domain (get control now, court determines the price later) for lots of purposes, including redevelopment. So the process now playing out is the fastest. It doesn't mean Davies can't or won't slow things a bit with a lawsuit.

Politically, the mayor is walking a fine line. He'd love to have a successful big project of some kind, but he's already perceived by much of the city as caring only about downtown. He won't want to be dogged for years by a court fight with Davies and public discussion of the $multimillions spent on condemnation when there's no obvious, slam-dunk use for the building.

To answer your question, no, Mr. Downtown does not like the mayor.

He must have someone in mind for a takeover of the project or he would not be pushing this. And he can add plenty of fines with court assistance due to the abandonment and lack of care to the property.

And if Mr. Downtown does not like the Mayor he should atleast have enough intelligence to not let that cloud his judgement on all matters related to the Mayor....His viewpoints would hurt the city in several instances.

Yes, Sterling Bay has been pushing for eminent domain since they were pushed out of the project.

Walgreens was looking for up to 1 million square feet, so they bring them in, get Abbott or one of a handful of giant healthcare companies without downtown space to take a piece, move Matter or open their own biotech incubator, and make the Post Office the gateway to the IMD, as our secondary CBD.

Perhaps, but Mr. D does have a valid point: Rahmbo isn't as indestructible as he may have appeared in the past, mostly due to many boondoggles of the past year, so the last thing he needs is another legal issue, even though he may be in the right with such an eminent domain case as massive as this. As it currently stands, the Old Main Post office is a massive eyesore and requires a lot of money to redevelop....however, repurposing as a multi-tenant commercial office space is not the best use, it would be a massive waste of money and space:

-the floorplates are odd and reconfiguring for even a large open floor plan for a company like Walgreens or McDonalds is woefully inefficient (it would take at least five minutes to walk from one end of the office to the other, this building is THAT massive).

-asbestos, asbestos, asbestos. The bears repeating that this is the single largest issue regarding redevelopment, as the remediation costs are ridiculously high.

-I still think it should be broken up into a hotel (north third), a federal field office (south third), and a massive library/research center/data center/archive/international agency for the main, middle third. Build a fully enclosed or even a retractable, large winter garden space on the roof and you have a beautiful and more importantly, globally relevant icon that can help draw more people from around the world.

The only real argument I see here against office space is that the floor plates are big. If a tenant is taking 500K or 1M square feet they'd be stacked over a bunch more floors in an office tower anyway so the time to walk the space seems less important. Most people will mainly interact with their own work groups anyway and probably utilize central shared conference facilities.

The renovation will surely be very expensive so the new landlord's mind will be on who can pay the most rent. Seems to me the answer is huge companies looking for lots and lots of class A office space.

Also, aren't the less vertical, wide floor plates of the Post Office similar to the way suburban office campuses are structured, even for Silicon Valley companies?

[MODERATOR EDIT]

Also, a developer might use your blueprint, Sentinel, and make Walgreens occupy the southern third, a hotel or other biotech company occupy the northern third, etc.

Any potential renovation of this building would not be classified as Class A. That is primarily for new construction office space.

http://www.areadevelopment.com/Asset...26281155.shtml

If a large, multi-national like McDonalds is looking for class A office space, the Old Main Post office would not be the place to look, if it is developed as such. And any shrewd developer will never spend potentially hundreds of millions of dollars renovating this beast of a building for potentially Class C office space, considering they wouldn't be able to charge that much for leasing. Somehow, my gut tells me this building will not be converted to office space, it just doesn't make sense.

Yea, most companies are sprawled in multiple buildings also. Some by design and some by necessity. Out in the SV most of the tech companies are sprawled over multiple towns as well because it is impossible to assemble the requisite real estate and entitlements to put everybody on one campus.

But not exclusively.

Not exactly. The Apple Donut actually has a pretty slim lease depth; nobody is very far from a window. The Post Office would have a big problem with that.

Actually, the talk of pharma companies actually brings up an interesting point. Could the Post Office be a good building for pharma companies to mix office and lab space? The portions deep within the building would be great for lab space that doesn't need or want access to daylighting, while the building is so huge that you could cut giant chases into it for all the mechanical and ventilation needs. Depending on the ceiling heights, you could even do a Salk Institute and build interstitial space to allow future flexibility.

If the whole point of open-plan offices is to encourage flow and feedback between different employees and departments, mixing office and lab space would do just that for the pharma sector even though their business model has traditionally had two separate sets of facilities.

True, but definitely not for the middle third.

Yes, some even use shuttle buses btw buildings.
A common question for high-growth companies is whether there will be space to expand.

I love this idea, particularly since I feel that the West Loop (north of Fulton Market PMD) would be a great place for the local pharma companies to set up office + research labs.

This building would essentially be new construction though. And the sheer size of it allows for ample and unique amenities. For example, to combat the distance factor that has been mentioned, they could create a divvy-like system with bike lanes circling the building. It could even have ramps connecting the floors. Millennials would love that shit. The office potential here is as huge as the building itself.

That's news to me.