CHICAGO | Post Office Redevelopment

[marothisu]

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

[ithakas]

Originally Posted by marothisu

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.

[marothisu]

Originally Posted by ithakas

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.

[k1052]

Originally Posted by marothisu

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.

[Kngkyle]

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).

[SamInTheLoop]

^ 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......

[BVictor1]

Originally Posted by marothisu

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

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?

[LaSalle.St.Station]

Originally Posted by BVictor1

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.

[aaron38]

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.

[Via Chicago]

Originally Posted by aaron38

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.

[ardecila]

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.

[Mr Downtown]

Originally Posted by Kngkyle

The 'New York Investor' could always just buy it off of the city and not have to work with Davis at all

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.

[Mr Downtown]

How would demolition be possible with the deed restrictions?

[LouisVanDerWright]

Originally Posted by bcp

This building may just get torn down..leaving two big parcels to develop from scratch

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.

[Steely Dan]

Originally Posted by LouisVanDerWright

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.

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.

[Mr Downtown]

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

[Ned.B]

^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.

[LouisVanDerWright]

^^^ 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.

Originally Posted by bcp

2/3 of wtc? Whoa..didn't know that....

Still, it's gotta be on the table by this point - and I imagine the city would play ball and allow some serious height here.

I'd rather see it repurposed for sure...yet demo + height may pencil out

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.

[orulz]

Originally Posted by LouisVanDerWright

^^^ 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.

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.

[VKChaz]

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