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Court approves deal to develop Old Main Post Office

The new owner of the old main Post Office has started work on a $500 million redevelopment of the historic, long-vacant eyesore that spans the Congress Parkway entrance to the Loop. | Sun-Times file photo

The vacant Old Main Post Office that hovers over the Eisenhower Expressway is about to be converted from a dilapidated civic embarrassment into a bevy of construction activity.

Five months after Mayor Rahm Emanuel’s bold threat to seize control of the giant hulk, the city has reached a court-approved agreement with its new owner, 601W Companies LLC, to begin a five-year, $500 million renovation and restoration.

In an added bonus for Chicago taxpayers, prior owner International Property Developers North America has agreed to pay the city $800,000 in fines for an array of building code violations that occurred during seven years under the company’s watch.

Earlier this year, Planning and Development Commissioner David Reifman argued that the building was “falling apart” and “potentially dangerous to the public.”

It won’t stay that way, the Chicago Sun-Times has learned.

Strict and staggered deadlines have been set through 2018 to correct more than 20 code violations cited by the city since 2012. The work also will include: replacing the building’s massive roof; restoring its historic lobby; repairing building facades; new high-speed elevators; and overhauling the electrical, plumbing, heating and ventilation systems.

Only after that nitty-gritty work is done can the decaying building be converted into commercial office space expected to house up to 12,000 people. The construction project alone is expected to take about 1,500 building trades workers.

After the three-phase renovation, it is hoped tenants will be drawn to a strategically located building with 18-foot ceilings and wide-open floor plans of up to 250,000 square feet per floor.

The final product also will include a landscaped riverwalk open to the public and a 3-acre rooftop park.

“Today is a bright day for the near West Side and all of Chicago,” Emanuel was quoted as saying in a press release. “We can now begin the work to transform this iconic gateway to the city of Chicago into the economic driver it was designed to be.”

Reifman said the work will result in a “first-class development that will benefit the entire city.”

He noted that the rigid timeline of improvements was developed after “significant cooperation” between the city and 601W. That’s a marked contrast from the belligerence that characterized the city’s relationship with enigmatic British developer Bill Davies.

Davies died one day after closing the deal to sell the Post Office. His representatives claimed Davies was working on that deal long before the mayor’s eminent domain threat in February.

Emanuel made that threat after years of grand plans and empty promises.

Davies initially fought the seizure and said, through a representative, that he would not give up “one of the most important buildings in America” without a fight.

“I don’t think this would happen anywhere else in the world. If they use eminent domain in that way, it would mean they could choose any building in the city and just say, ‘We can take that property and pay what we want to pay,’ ” said Martin Mulryan, Davies’ project manager, said then. “The building is so big. It’s one of the most important buildings in America. Maybe somebody has realized that and thinks, ‘We don’t want an overseas developer owning it.’ It’s a valuable asset. The city wants control of it. I’m sure it will be a low offer. But [Davies] is not going to say to the city, `Come along and take the building if you like.’ ”

The Post Office closed in 1995. The giant hulk has sat decaying ever since. Despite its prime location, the 2.5 million-square-foot behemoth defied the ups and downs of the real estate market.

It has become a civic embarrassment akin to the giant hole in the Loop once known as Block 37 before that vacant parcel was finally redeveloped.

Over the years, the Post Office has been mentioned as the future home for a downtown casino, an IKEA or a corporate headquarters for Walgreens.

Earlier this year, Emanuel denied that work on the Post Office and a long-dormant site at Roosevelt and Clark was more evidence of downtown-centric development.

“These have been dormant for years. They pay minimal property taxes. When the Roosevelt and Clark property and the Post Office are developed, they are going to pay millions upon millions of dollars in property taxes, which will allow us to continue to make investments in basic services like after school, summer jobs, increased policing,” the mayor said.

Emanuel kept his cool when a television reporter asked his response to “neighborhood critics” who claim that, “Once again, downtown’s getting all the goodies” while “they get the shaft.”

But the mayor, who is trying desperately to shed that “Mayor 1 percent” image, was clearly exasperated.

“Just two weeks ago, we were in Chatham with some major investments . . . and the small business [help] I announced out there was one we had done in the Pullman area. . . . The dichotomy of pitting one against the other is not how businesses grow. . . . You work at it at multiple levels — not one versus the others. And I oppose the opposition because I think we’re all in this together,” he said.