Original bidder buys old Chicago post office for $20.8 million, sources say
Chicago Tribune
Posted by Melissa Harris on October 21st, 2009 6:09 pm
British developer Bill Davies has purchased Chicago's old post office for $20.8 million -- half of the price he agreed to pay at an auction in late August, according to several sources with knowledge of the transaction.
Davies closed on the behemoth building, which ranks among the largest in the city and straddles the Eisenhower Expressway, Wednesday at the downtown offices of the Chicago Title Insurance Co. It is unclear whether the U.S. Postal Service permitted the reclusive developer to use the $4 million deposit he put down after the auction toward the closing.
Although the deal is a bargain compared to the $40 million Davies' bid at the auction, it is generally believed that he overpaid. Walton Street Partners reportedly had a deal to buy the property on W. Van Buren Street for $10„© and receive $62 million in government incentives to renovate it, but still did not close the deal. Children's Memorial Hospital also considered the site, which has been vacant since 1995.
"There's so much deferred maintenance, and such a huge floor plate," said John Gates, a former real estate investor, who has toured the building. "It's an awkward layout with office space in four towers. Many smart people in Chicago have taken a hard look at that space for many years (and passed). It takes some guts to buy it."
A woman who answered Davies' cell phone Wednesday declined to comment. Davies, who has appeared on the Times of London's list of England's richest people, first bought a dilapidated post office in 1986 in Liverpool. He sold it 16 years later in the same condition he bought it, which generated much conflict with Liverpool politicians. It was one of several stalled projects there.
After Davies failed to close on the post office earlier this month, the post office solicited new bids from participants in the August auction. Those bids were due at noon Friday. John Thomas„©, the second runner-up at the August auction, said he partnered with runner-up bidder Nathaniel Hsieh„© for a $10.3 million offer in the second round. Thomas said that he and Hsieh were told they came in second.