AUCTION | Suggested opening bid: $300K for 3 million sq. ft.

July 9, 2009
BY DAVID ROEDER droeder@suntimes.com

The old Chicago Main Post Office, 433 W. Van Buren, would make a great …

You could finish the sentence, but acting on the plan will cost millions of dollars. Just keeping the massive old structure secure and heated to minimum levels is an expensive proposition.

» Click to enlarge image

The Main Post Office is going up for bid in the worst real estate market in memory.
(John H. White/Sun-Times)

PHOTO GALLERY

Inside the old Post Office

If the U.S. Postal Service sells the building, it would go on the tax rolls for the first time. A private buyer would have to start paying taxes.

Those are some of the obstacles any bidder faces as the postal service prepares to sell the property via auction. A grim market for real estate development in which credit is scarce for speculative deals makes matters worse.

Nevertheless, the postal service has its own budget squeeze. So it's hoping for the best with the auction by Rick Levin & Associates Inc.

Levin has suggested an opening bid of $300,000 for the sale, scheduled for 1 p.m. Aug. 27 at the InterContinental Chicago O'Hare Hotel, 5300 N. River Road in Rosemont. But it's a suggestion, not a minimum, and the postal service is committed to a sale regardless of price.

During a tour of the property for reporters Wednesday, Levin suggested the City of Chicago might emerge as a buyer. Levin said he had no inside knowledge of the city's interest, but that municipalities sometimes step in to control the plans for complex or difficult sites.

Jacquelyn Heard, Mayor Daley's press secretary, said later, "The city has not expressed interest at all in that property."

Once the largest postal facility in the world, the building holds from 2.7 million to 3 million square feet, depending on whether the estimate include usable space or additional areas such as stairwells. Its interior space is almost as large as Sears Tower's.

The post office opened a new Chicago base on Harrison Street in 1996. It left behind mail-sorting floors that are studded by pillars and stretch for nearly two blocks, passing over the Eisenhower Expy.

A soaring lobby off of Van Buren is one reason the building is on the National Register of Historic Places. The lobby is decorated in marble and gold leaf, with plaques that commemorate modes of mail transport, including the Pony Express and steamships. It also has a vault that once held stamps and currency shipped from the Federal Reserve.

The building's biggest activity lately was as a set for the Batman movie "The Dark Knight." The bank heist scene was filmed in the lobby and producers used other space for storage.

In taking the property to auction, the postal service severed ties with the development firm Walton Street Capital, which had crafted plans for the site for more than a decade. It settled on a scheme to shrink the building, taking out floors that pass over the expressway and converting the rest into a hotel, offices and condominiums.

Walton Street secured a $51 million subsidy pledge from the city but couldn't get financing for construction. The firm has said it will consider bidding at the auction.

But for all the questions that surround the property, a puzzler is why the postal service waited until the worst market in memory before taking it to auction.

Marla Larsen-Williams, real estate specialist for the agency, wasn't offended by the question. She smiled and replied, "Welcome to my world!"