Walton Street’s deal for old Post Office falls through

By Eddie Baeb and Alby Gallun, June 09, 2009

(Crain’s) — The Old Main Post Office is on the block again after a deal to sell the massive building that straddles the Congress Parkway to Walton Street Capital LLC fell apart.

The U.S. Postal Service announced Tuesday it plans to auction off the 3-million-square-foot property on Aug. 27. The “suggested opening bid” is $300,000, the Postal Service said in a news release.

Chicago-based Walton Street, which is headed by real estate mogul Neil G. Bluhm, first put the long-vacant building under contract with another firm more than 10 years ago.

Walton Street cleared a major hurdle in 2007 when the city agreed to provide $51 million in tax-increment financing to help subsidize a proposed $310-million renovation. Walton Street had planned to demolish about one-third of the building and convert the remainder into 450,000 square feet of office space, 300 condominiums and a 236-room hotel.

Related story: Commission OKs $51 mil. in TIF for Old Main Post Office

Converting a huge, historic building into three different uses would be tough to pull off even when times were good.

“The financial markets have made the financing and execution of that project even more difficult than it was before," says Raphael Dawson, a principal with Walton Street.

Walton Street and the Postal Service are parting amicably, Mr. Dawson says, but the service simply couldn't wait any longer for Walton Street to start a project.

"They have to move on and see what happens," he says.

A local Postal Service spokesman says Walton Street was given some extensions to close the deal, but after the contract expired recently the agency decided to proceed with an auction.

Walton Street hasn't decided whether it will participate in the auction, but Mr. Dawson says the firm still has an “intense interest” in the property.

The Postal Service has hired Rick Levin & Associates Inc. to conduct the sale.

“This is a restoration opportunity of a lifetime,” Mr. Levin said in the Postal Service’s statement.

The building at 433 W. Van Buren St. was once the world’s biggest post office, but has been vacant since the mid-’90s when the Postal Service moved to its current facility nearby.

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Jeff S. wrote:

I am 100% for this project happening to it's a bit sad to hear there's yet another roadblock on top of the 500 other roadblocks. Lets just get this thing done and over with so we don't have to keep paying so much money just to maintain an empty building.

http://chicagoismynewblog.wordpress.com

6/9/2009 4:08:24 PM

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Karen M. wrote:

This story makes me wonder what's hapening with another big white elephant, the old county hospital. Talk about a building that needs to get off the pubic dole.
How about a story about what's going on there? I remember reading at one point that there was lots of older medical equipment, beds and such just sitting around. Is that the case? If so, why can't we get it to some country - like Iraq for example- that is desparate for any medical technology at all?
Just wondering

6/9/2009 5:59:20 PM

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