Only problem (and it's a massive one) with that (this also applies to all these developers that have these grand Fulton Market, River West, Goose Island, etc office plans) is these are not focal points for transit (regional and city)....I'm not talking about the odd cta line, or a few bus routes. I'm talking about a focal point/nexus of transit lines/modes. Those guys are overpaying for office use, and will need to switch to residential/mixed use/hotel at some point, by and large. For the most part, niche office only in those locales.......the center of gravity for future net new office addition in not just the city of Chicago, but now clearly the entire region, will be within walking distance of the commuter stations - it's where all expressways and train lines (including the cta lines) in the city and suburbs, and bus routes, etc - (and dedicated bike lanes - for that matter) come together and why that's where you put your office.....

I'd even go much further than to state not exclusively. New construction is a super stratified group at the top of Class A.......Class A probably comprises 40%+ of all office inventory in downtown Chicago.........I see almost no reason why a top notch renovation project into functionally modern office space couldn't be designated A (or, if there's some technical reason why not - couldn't get similar rents to avg Class A space).....

Your'e dead wrong on the prospects for adaptive reuse to office. What exactly do you think Sterling Bay has in mind for it?!

Uh, can you say Merchandise Mart? Think about that building - it's floor plate size/shape, and the incredible evolution that has happened within (and will continue to over the next couple years) over the last few years. Do you sense any similarity with Post Office and its prospects? Large suburban and out of town corporations, technology co's, etc are fighting each other to take up what little available space remains in the Mart.

Granted, the capital expenditures will be greater at the Post Office, but there is simply no better economic use/plan than to convert to very large floorplate office space, and I have a feeling - just a little inkling - that Sterling Bay will be able to pull this one off......everything they've done over the last 5-6 years has prepared them for this moment, this project - by far their largest and most ambitious yet.....

What makes you think Sterling Bay is still in the game? Considering how anti Lucas Museum they've been, which is a huge priority for Rahm, don't you think it's a conflict of interest for the City to seize the Old Post Office just for Sterling Bay to redevelop it? Has there even been any news on how the City is parterning with (if anyone yet) for redevelopment?

Also, give me a break - you and I both know that while the north and south ends of the post office could potentially be converted to office/hospitality (see my original post for reference), the main, middle third is not at all an apples to apples comparison with the Merchandise Mart - what worked there is not at all guaranteed to work for the bulk of this building. The Mart has been in operation since even before it became the interior design hub of the country, let alone now as a tech incubator. The Post office has been vacant since 1991-93. Big difference.

^ I saw something about Sterling Bay being a sponsor for Friends of the Parks, but if that's what you're talking about (even if some of their execs are against the Lucas - perhaps they are - I have no idea), this isn't a conflict of interest (interests are aligned - the city wants the post office redeveloped - badly, and Sterling Bay wants to redevelop it - badly. That the city and Sterling Bay potentially disagree on some other looming issue would not be a factor that knocks them off the top of the list of potential post office post-seizure acquirers/redevelopers, particularly as they are arguably (or perhaps even inarguably) the best/most directly-qualified. This is not to say that the mayor or underlings won't speak with party on this other issue, and try to persuade them, or what not......but it's certainly no deal-breaker, by any stretch.....

Everyone knows the project will be a challenge - everyone has known that for some time. Everyone also knows it will be capital-intensive. My point with the Merchandise Mart comparison stands very well, however - think of it in terms of demand for a structure of this massive size and shape - you have a proven demand source out there for it - and that is adaptive reuse to modern office in a historic structure......it's the only use I can see that has a solid fighting chance of being both economically successful, and also completely re-energizing the entire corner of the Loop (or whatever you want to call this area - near sw loop, etc.).........show me another use - any other use where there is some sort of proven demand model for a structure of this size/shape that can accomplish both goals from above......? All ears.....

I would not be so convinced that it's going to 1) drag out as long as you suspect, and 2) most definitely, that it will drag out longer than this cycle....

On 1, the law is so clearly on the side of the city here (realize that a well-funded legal team can delay, obstruct etc nevertheless)....that my bet is it moves faster than you believe it's likely to

On 2, I think we have another 3, possibly 4 years left in this cycle, outside chance of 5........it's definitely going to surprise many folks, I'm assuming potentially yourself as well, with its eventual longevity.....

Post Office owner says city move could kill deal with New York investor
 

Tough shit Davis, you had your chance and you blew it. Next.

From the I'll Believe It When I See It Department

The owner of the Old Post Office is in advanced talks with a New York investor that's interested in developing the long-vacant building, but the city's push to seize the property could kill the deal, a representative of the property told a city panel today.
***
Since 2014, IPD has been trying to find a buyer or joint venture partner that would redevelop the building, and is close to a deal with a New York investor with “impeccable status and stature,” Charles Hubbard, an IPD consultant, told commissioners. He declined to identify the investor, but said the firm has other holdings in Chicago.
***
“We have almost in place really good news, and this action could possibly jeopardize that,” Hubbard said of his mystery deal.

Story from Crain's

^ Nope, wrong department I'm afraid. It's straight from the "Bullshit" department, actually.





No turning back, no addition time, no nothing here. (Solis seemed to be opening the window for that, but I have a feeling he may have gotten a sharp foot in the nuts from Emanuel - or will be getting one soon, because any such window needs to be slammed shut immediately)......time's up for Davies.

If Davies wants to keep this, he better provide a little proof that they're in talks with someone - otherwise I call bullshit.

Pretty clear that if they're that close to a deal with the NY investor, the risk of losing the property to the city would be clear to that investor, and they'd be willing to come forward with some proof. The risk would be much higher in letting the city move forward than any lost leverage in retaining anonymity at this point.

Are you sure they would come forward in that case? I mean it might be the logical thing to do but they could have reasons to keep it private until a deal is made.

I don't necessarily believe Davies here, but I also have a few percentage points of "you never know" in me right now.

This isn't Davie's first go around with the city over the property, any investor would be aware of the increasingly contentious relationship between him and the city. Unless someone comes forward instantly this is just more of the same old bullshit. Even if someone does come forward the pressure to get the deal done will not be in Davies favor since the city is looming over him with ED.

In short this is another round of bullshit from a bullshit artist. The city is going to issue the RFP, select someone, then ED the building. Bye Davies.

The 'New York Investor' could always just buy it off of the city and not have to work with Davis at all, if they were really that interested in the building. I can't imagine Davis actually brings anything worthwhile to the table other than the deed (for now).

^ Exactly.....I'd say Davies brings less than nothing to the table.....because any partner would have to work with Davies.....and that is next-to impossible......

He could start by paying the $600,000 in back property taxes he owes.

Isn't it funny when you realize how cheap so many billionaires actually are?

Good point. If a project was in the works they wouldn't let it be delinquent on taxes.

The City's concern has to be there will be a point of no return where the building becomes in such disrepair that it will have to be demolished. I think that's what Davies has been hoping for all along.

The building was set up to handle massive amounts of shipping and packages, yes?
With all the talk of how hard it will be to adapt the building to other uses, I never understood why UPS, FedEx and Amazon don't want it.

presumably the same reasons the USPS didnt want it anymore. in need of expensive repairs, and multi-story sorting facilities are no longer desirable. its far cheaper to just throw up some box in bensenville or wherever.

Set aside the multi-story bit... the Old Post Office is right at the center of Chicagoland's expressway network, which means each and every truck would have to sit through hours of thick traffic to reach the building, even though the majority of Chicagoland residents don't live in the city.

Those shipping companies have been doing the exact opposite, locating off 294 or 355 where cross-country trucks can whiz right in and out, and smaller trucks can take packages further into the city.

Well, that's the rather curious arrangement the city has in mind at this point. They're putting out an RFP for property they don't actually control. The city won't move to actually take the property until it has a deal in place to resell it to a developer at the same price plus transaction costs.

How would demolition be possible with the deed restrictions?

I honestly can't imagine a scenario where that could happen. There is nothing more powerful in real estate than comparable projects and what has happened to the Merch Mart basically puts this building in the cross hairs of anyone who knows how to repurposed large old buildings into loft office space. The only logical use at this point is the same use Merch Mart, Fulton Cold Storage, Hilshire Brands building, etc have seen.

Also, can you imagine the demo costs associated with taking something this large down? Let alone with an active freeway passing through it? I think this would be easily the largest building by SF ever demololished. This building contains about as much floor space as 2/3 of on of the original WTC towers. Very few structures of that size are ever built and even fewer destroyed.

AND it's only one freaking block south of union station, 4 blocks south of ogilvie, and 3 blocks west of lasalle street station to boot! it's exceptionally well positioned for metra commuters.

the potential here is big. i can't see a scenario where the entire structure is torn down wholesale.

The next owner still takes the property subject to any recorded deed restrictions or protective covenants.

^Correct. When the US Post Office sold the building, it was sold with restrictions that protect portions of the exterior and interior of the building and subject any modifications to a historic review. The north office block facing Van Buren, lobby, and post-master's office in particular are protected similar to if it were a city landmark.

Previous proposals have proposed demolishing or covering parts of the building. One a few years ago proposed removing the top 4 or 5 floors of the central portion, leaving the south and north tower blocks. Another few recently carved large atria into the building and obscured much of the east elevation behind new construction. But at this point, I'm pretty sure that demolishing the entire building is not an option for any future owner.

^^^ Even those studies chopping out light courts look silly in light of the recent trends in office space downtown. It used to be a puzzle how to revive this building, but the answer has revealed itself: leave it be and lease it out as gigantic floor plate office space for tech companies and corporate giants. The only disadvantage of this building is that it is more removed from the River North tech nexus. But what it lacks in that regard it supplants with far superior access to freeways and metra. I have a feeling this will be redeveloped (probably by Sterling Bay) as office only and will fill with a much more corporate relocation from the suburbs oriented mix of tenants than Merch Mart and it's tech draw. That is good because it means Merch Mart will have more room for tech companies and relocating companies from the suburbs have an even better option more convient to their current workforce. Just more lube for the torrent of companies from the burbs. That is something Rahm loves and you bet this will get done as a result.

You don't even need to demo anything to go up on this parcel. There are already several small out buildings along the river that could be ripped out if you wanted to go up (only logical use in my mind would be residential, this tower would have Wolf Point West like views straight north up the river.

The only good thing Davies did was get obscene levels of density approved for the site. Hopefully Sterling Bay takes over, fills up the existing building, and then does their best to utilize that massive entitlement.

It's not too hard to understand what has changed so that huge floor plate offices are now viable. Several trends popularized in tech and are now spreading to other industries that make it work include:

1. Office furniture is trending towards less privacy and more collaboration, with lower or non-existent cubicle walls and translucent or transparent partitions. This allows more light to penetrate the interior of the building.
2. The amount of space dedicated to each employee is shrinking in favor of more open/shared/collaborative space
3. Managers are expected to have a desk on the floor with the rest of employees rather than in an office
4. For those who do get an office, the notion of taking up windows to make window offices for managers and executives is becoming passe in many industries.

Beyond that, improvements in lighting technology (moving from fluorescent to LED fixtures) allows more pleasant, natural feeling light with better color rendering and less flicker, so even spaces where natural light doesn't reach are better than they used to be.

That said, the Post Office has some seriously enormous floor plates, over four times that of 1k Fulton, and even bigger than Merch Mart. But if it works there, it can probably work here too. Sterling Bay has experience with this sort of thing, so I agree with you all: if anyone can pull it off, it's probably them. Any ideas what other developers besides Sterling Bay are likely to submit RFPs?

The 5 story building along Harrison is not ugly; it seems like a well maintained loft style buiding. It is far from distinctive in Chicago, but I still hate to see well-built old buildings like this bite the dust. Its floor plates would be much more conducive to residential, but then again, it's not that big so you wouldn't get too many units out of it. If there are entitlements for ridiculous density, maybe they will need as big of a blank slate as possible in order to meet the site's full potential.

Story on deal to buy the Post Office
http://www.chicagobusiness.com/reale...in-post-office

The city would be wise not to stop the eminent domain process until the ink is dry on on the closing papers. This could just be another ploy by Davies

That didn't take long
 

Delete

Agree completely. The city should absolutely proceed as if no deal is in the works (I believe this is what they'll in fact do).....can't really say either way if it is or not, but it should surprise precisely no one if this did turn out to be just another ploy.......

just saw this:
http://www.cbc.ca/news/canada/britis...lans-1.3484648

I think that a similar approach could be done for the Chicago Post Office, leave the big floor plates for office/retail, and put residential on top, almost like a city within a city

^^^Nope, residential makes absolutely no sense in any capacity in this building. I don't know why anyone would think otherwise, it's already been discussed ad nauseum that office is the only logical use for floorplates this large. This is a merch mart clone, would you suggest they should kick Motorola out and fill the upper floors with residential there?

But there's just not that much demand for that kind of office space. Even the Mart is no more than 15 percent tech offices, and none of those are in windowless spaces.

Setting aside the Van Buren building, you can really only use the first 30 feet of the perimeter for residential—and only the first 80 feet of the perimeter for office. The workroom building is 344 by 652 feet! You could put colocation rack space in the center, but I don't know if there's that much server space required in the entire state of Illinois.

That's why I feel like you'd have to demolish the center of the top 8-10 floors and create some kind of atrium, winter garden, or light court. It could be large enough and amenity-filled enough to have residential units face it, or a little less generous and faced with office windows. Probably a combination.

Did you even look at the link?! or read my post? They constructed several residential towers (and one office tower) of a large abandoned post office using the post office itself for retail

I placed a link for people to look at. I was referring to building residential towers on TOP of the post office, leaving the actual post office to retail/stores and offices

With the 80ft setback you mentioned, 9 floors (with the top 4 a bit narrower) works out to about the same 1.1M sqft as 350E Cermak, so it'd be a big bite for the market to absorb all at once, but not unprecedented. And I doubt you'd use all the floors that way anyway.

And even 15% of the Merchandise Mart is 600K sqft; given that it's only been converting to tech tenants for a few years, it seems like there is significant demand (especially given the success of other large-floorplate office conversions like 600W Chicago, 1000W Fulton, and the River Center).

I'm not saying it'd be easy or necessarily the fastest to lease up, but it doesn't seem implausible that the building could be reused without cutting huge light wells into it.

I think it will be interesting to see how that proposal proceeds, but the existing Vancouver building is a lot smaller (20% of the size) and less complex of a site than Chicago's. The city has basically already given the developers the zoning to do whatever ambitious project they'd like (within the Post Office itself and the nearby parcels). I'm not sure how adding more volume on top of the existing Post Office is going to help matters...and an urban mall the size of Woodfield sounds like a nonstarter.

Not very practical.

Even if they were really conservative in calculating the foundations for the post office, you probably could only support 4-5 additional stories. To go higher than that, you'd have to put down new piers and caissons, which means not only going down through the old building but also avoiding the highway and railroad tracks underneath.

Casinos and outlet malls don't need windows.

Except the mart is not only attracting tech offices, but multiple office user types and has virtually identically large floorplates as the Post Office. With today's open layouts you don't need to worry about depth at all really and they usually cram all partitioned spaces into the center of the floor. Also, no, this building is not that large of a block of space that the market will not be able to absorb it. The market absorbs 1,000,000 every time a new office building is built. This has roughly the same SF as river point a d Riverside combined.

Additionally, they don't have to lease out the entire building at once since the structure already exists. It's not like new construction where you need to justify construction of the superstructure, you can lease it out and do TI as you find the tenants.

I love how you clearly didn't even read the article proposal :tup:. If you are gonna disagree with someone at least take the time to respect the person's post and opinion

Why not tear out the guts of some of the building and just do what they did on the Michigan, Monroe, Wabash block for the Legacy and build a tower or two on the inside? Seems like that could work just as well as trying to do some hamfisted/forced attempt to shove offices into an industrial sized floor plate.

Someday I hope they push the Metra Rock Island terminus a little farther south and demolish the Chicago Stock exchange viaduct over Congress. It would open up the Congres Blvd Vista and allow a new tower to be built over the new Metra terminus on Congress.

Demolish the eastern side of the post office and just leave the larger annex portion of the building to renovate.

Nah, just renovate the trading floor. The CSE just got bought by the Chinese anyway, it's only a matter of time until CSE goes the way of the dodo.

When that happens, Metra should buy the trading floor and turn it into a ticket hall, maybe with a new glassy facade like the tollway oases.

http://i68.tinypic.com/2qxrdz4.jpg

The building is too large it will stay around in the planning stages for a while.

It's been in the planning stages for decades now. The whole topic of discussion here and the potential use of eminent domain by the city is to move this project beyond just the planning stages.

This is for premium viewers, but here is an article in today's edition of Crains about the New York firm that is under contract to buy the Old Post Office.

They seem like the right kind of firm to do this deal, if they can close on it as planned.