Friday, July 19, 2013

Overbite: Is Chicago's Art Deco Post Office Too Big Not to Choke?

(Update: February 20, 2016 ) Chicago Mayor Rahm Emanuel is moving to use eminent domain to seize control of the Post Office Building from Bill Davies, who is resisting.
Is there no end to the plagues bequeathed to Chicago by Richard M. Daley in his final terms?
click images for larger view
The city should have kicked Bill Davies to the curb back in 2009, when the British "developer" won an auction to the acquire the massive, two-block square former U.S. Post Office with a winning bid of $40 million.  Instead, the Daley administration watch him immediately default on that bid and then, rather than going back to the second highest bidder, eventually let him pick up the property at a 40% discount.
"Let me assure you that like Daniel Burnham, we shall make no small plans," proclaims the website for Davies' company,  International Property Developers North America.  Left unstated is the fact that Bill "Flipper" Davies is best known as the developer who builds nothing, who holds onto signature properties until his inaction becomes such a nuisance that he's paid a big premium to be bought out.  He's a stubborn old coot.  If history is any indication, he'll prove more than a match for Emanuel and his plan, whose outcome is far from certain, if for no other reason than its success simply brings us back to the beginning, with a white elephant building that's now suffered another 7 years bad luck.

Most firms considering taking on the Post Office were giving pause by its sheer scale: a 2.7 million square-foot building straddling the Congress Expressway, completed in 1932 to a design by Graham, Anderson, Probst and White, and vacated by the U.S. Postal Service in 1995.  Davies response was that it wasn't big enough, announcing in 2013 a plan that would almost double the complex's size with new construction.
image courtesy The Chuckman Collection

rendering Antunovich Associates
As reported by David Roeder of the Sun-Times, Phase I would have involved 4,500,000 square feet, including a new 1,000-foot-high tower and parking structure to the west of the current building.  Estimated cost: $1.5 billion.  A vote to approve the concept by the Chicago Plan Commission was seen as a casting of bait to attract potential investors to foot the bill for the plan of Bill Davies, a man who began his career at 15 as a construction worker and by the time he was 24 was running his own real estate company.

How serious was Davies and his vision? As detailed in a 2007 profile profile by Tony McDonough of the Liverpool Daily Post, Davies' track record was not exactly encouraging . . .
  • In 1972, he paid £3 miilion to buy Liverpool's Aintree Racecourse, best known for the annual Grand National Steeplechase, with a promise of building one of the Europe's largest shopping malls.  It never happened, and Davies sold out in 1982.
  • In 1986, Davies acquired the site of Liverpool's old Post Office.  Work on a planned £100 million shopping mall started in 1999, and then stopped.  Davies eventually sold off the site for £17 million to the Duke of Westminster.
  • Also in the 1980's, Davies bought the Exchange Flags site for another grand plan and, much to the dismay of Liverpool Officials, and let it remain vacant for nearly 20 years, even after receiving £4.5 million in government subsidies.  Davies sold the site off in pieces in 2006 and 2007.
  • In 1996, Davies paid £25,000 for the right to turn Liverpool's Chavasse Park into a £480,000,000 shopping center with a million-square-feet of leisure space in a single, wave-shaped building.  After British Secretary of State called the proposal “significantly harmful” to Liverpool's city center,  Davies sold back his option for £2 million in 2008.
Davies' Chicago timeline follows the same M.O:
  • In August of 2009, he  won control of the post office with a winning bid of $40,000,000, and ignored two deadlines for closing the deal before negotiating the purchase price down to $24,000,000.  
  •  In 2012, he was taken to court over the deteriorating state of the Post Office, the same year the city filed suit to force Davies to repair and reactivate the ventilating fans whose malfunctioning was allowing flammable creosote to build up in the Union Station track areas below the Post Office, resulting in several fires.
  •  In April of 2013, a Federal Court ordered Davies to keep the fans running 24 hours a day to keep noxious diesel fumes from building up in Union Station.
  • In April of 2013, Davies announced his plan to encase the building in an overscaled wrapper of new development, showcasing renderings by the architectural firm of Antunovich Associates, which included, in their second phase, a 2,000 foot-high skyscraper.
rendering Antunovich Associates

The structures depicted in the renderings were striking, and Antunovich was careful to integrate into the design the Post Office's one signature interior, the double-height, block long lobby along Van Buren.
rendering Antunovich Associates
The new design would have been a welcome upgrade from the Post Office building's current kludgy infill  along its eastern facade, and includes, for first time, a riverfront esplanade.
rendering Antunovich Associates
At the time, I speculated whether the build-out could leave space for a  potential future high-speed rail terminal, as proposed by Helmut Jahn in 2010?
image: Jahn
The larger questions, which the Plan Commission didn't touch, is whether the plan was actually a good - or even viable - idea.  When the 275,000 square-foot Block 37 mall, across from Macy's, is still largely empty, coul the Post Office's West Loop neighborhood really support a mall that's even bigger (and escalates to 800,000 square-feet of retail by the final phase)?  Who would be the tenants?  Is it possible that the Post Office could become a vertical strip mall to end all strip malls, attracting big-box retailers like Walmart and Home Depot with the prospect of opening outlets as large as their suburban counterparts?  Can this area really support 300+ hotel rooms and another 1,000 rental apartments (just to start)?  If you had $1.5 billion - or a good chunk of it - is this where you'd want to be investing?

Those speculating that a casino could be part of the mix at the old Post Office could take a breather.  It was already there, as the succession of losing bets would continue . . .

  • In May of 2014, U.S. Senator Dick Durbin called on Amtrak to fight a motion filed in federal court by Davies to overturn the court order to keep the Post Office's ventilation system running.
  • In July of 2014, little more than a year afters its grand unveiling, it was if the Antunovich plan had never existed.  It was announced that developer Sterling Bay, which has just finished the massive redeveopment of the former Fulton Market Cold Storage building into 1K Fulton, the new Chicago headquarters for Google, had entered into an agreement with Davies to co-redevelop the old Post Office.
  • In October of 2014, after working with Davies for just four months, Sterling Bay announced they were running away from him and his deal as fast as their caisson-like legs could carry them. 
  • In October of 2015, after a prominent alderman impatient with six years of inaction threatened to strip Davies of the mixed-using zoning his proposals required, Davies responded by announcing plans to demolish Sugar House, a structure next to the Post Office, to create a riverfront staging area for his big, really big development.
  • In late January of 2016, Davies announced his latest scheme: using part of the building to construct 300 "micro-apartments" of 280 to 600 square feet that would rent for up to $2,400 a month.
  • On February 20th, Mayor Emanuel declares his intention to seize the property through eminent domain.
  • On February 23rd, the Tribune's editorial board, in what is promised to be just the beginning of its invaluable guidance, seeks to take ownership of plotting the Old Post Office's future.  McCormick Place Really West anyone?

Read More:

International Property Developers North America website 
 from 2005:  Monument Mori - Post Office of the Dead


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