Dec. 04--A for-sale sign is going up on Chicago's old main post office -- again.
Monaco-based developer Bill Davies, whose firm bought the behemoth structure that straddles Interstate 290 five years ago, is seeking a buyer or a joint-venture partner for the property. Savills Studley, a U.S.-based affiliate of London-based Savills, said it will list the property next week with a confidential price tag.
Teaming up with another firm would be Davies' second attempt at a joint venture for the 14-story building and 12.6-acre site. In October, efforts to develop the parcel with prominent Chicago developer Sterling Bay fizzled after a dispute about control and the inability to land Walgreen's headquarters as an anchor tenant. Sterling Bay reportedly offered Davies almost $150 million for it.
Davies' master plan for the site envisions a mixed-use development of up to 6,769 residential units and 1,240 hotel rooms, in addition to office and retail components. "My company and our team of consultants have worked long and hard, with full support from the Chicago City Council, to secure an excellent and innovative rezoning and a new planned development for the Old Post Office Site," Davies said in a statement.
Crain's Chicago Business first reported Davies' interest in a sale.
A sale, rather than a joint venture, would give another firm a chance to put their stamp on it and end the latest colorful chapter in the building's history, which started when Davies walked into an August 2009 auction of the building and sat down in the front row. Some 45 minutes later, he emerged as the winner with a bid of $40 million. Afterward, a statement from Davies' company, International Property Developers North America, said, "To paraphrase Daniel Burnham, let me assure you that we shall make no small plans."
But neither the auction nor efforts to develop those plans went smoothly. Davies cried foul after the auction and wound up paying about $24 million for the building.
Built in 1921 and expanded 11 years later, a new use for the building, designed by Graham, Anderson, Probst and White, just hasn't been able to find its footing or its financing. That hasn't stopped the wishful thinking that has taken place since the Postal Service left it in 1996, relocating across Harrison Street.
Part of the challenge is its size and the scale of any project that would be attempted. The hulking structure comprises more than 2.7 million square feet. That led to talk of repurposing part of it into a hotel, water park, auto mall, casino, parking garage, residences and even an Ikea store.
Walton Street Capital, the last firm to get close to a development deal, envisioned a $300 million project but walked away in 2009 after concluding the undertaking was too complex and the credit markets were too tight.
Five years later, financing has loosened up, particularly for apartments. Also in the building's favor is its West Loop surroundings that have turned into a vibrant mix of residential and office developments.
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