Chicago’s Old Main Post Office is “one of the most important buildings in America” and British developer Bill Davies is not about to give it up without a fight, a top aide said Monday.
Three days after Mayor Rahm Emanuel moved to seize control over the building and solicit bids to redevelop it, Davies declared his intention to take on City Hall.
“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.
“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.’ ”
Mulryan said he understands Emanuel’s frustration after watching the 2.5 million-square-foot behemoth of a building that straddles the Eisenhower Expressway sit vacant and decaying for more than 20 years.
But Mulryan argued that it’s unfair to hold Davies responsible for that delay when he has controlled the building for only six or seven years and spent “in excess of $70 million” during that time.
“Mr. Davies is the only person who has invested his own personal wealth into the building in the last 20 years,” he said.
The reclusive Davies bought the building for $17 million in 2009 after defaulting on his winning auction bid of $40 million.
Two years later, he announced plans for a massive mixed-use complex with a trio of modern skyscrapers flanking the art deco post office. One building would have been taller than the Willis Tower. The City Council granted zoning approval in 2013.
Ald. Danny Solis (25th), chairman of the City Council’s Zoning Committee, encouraged Emanuel to pull the plug after learning that Davies had twice turned down offers of $150 million from other developers.
“It’s his greediness to make even more money that has resulted in a big loss for the city in jobs and tax revenue,” Solis told the Chicago Sun-Times last week.
Solis also scoffed at Davies’ most recent plan to start small and seek tenants for 300 “micro-apartments” — units ranging from 250 to 600 square feet. That concept has been tried in New York City but has never been tested in Chicago.
On Monday, Mulryan fired back.
He argued that micro-apartments have been a smashing success in New York, Tokyo, London and Paris and would be every bit as popular in Chicago, which he counts among the “second-tier of world-class cities” where people want to live.
“I used to own one in London. The only mistake I ever made was selling it. Why pay $1 million for a Trump [Tower] apartment when you can get a micro-apartment for a whole lot less and sleep there Monday through Thursday?” Mulryan said.
“People don’t want to sit in a car for two hours and drive home to the suburbs if they’re working until 11 p.m.,” he said. “It’s not a place for people to bring three or four children. It’s a crash-pad.”
By starting with a “couple hundred” tiny apartments, Davies had also hoped to generate a $20 million-a-year revenue stream that could go a long way toward attracting financing for the massive mixed-use development he still hopes to build.
“It wasn’t really fundable. It was too much risk for funders. If the development has an income, the funding becomes a lot easier. The second phase pays for the third phase,” Mulryan said.
Despite the mayor’s announcement, International Property Developers North America, Davies’ company, continues to have discussions with potential investors and buyers.
But Mulryan said: “It’s difficult to invest in a building if you think it will be taken off the following day. It could scare away potential buyers or investors. There must be a way out of this that would suit the city and IPD, rather than one side trying to force the issue and steal the building.”
The post office closed in 1995. It, and its annex buildings, have sat vacant and decaying ever since at the western gateway to downtown Chicago, defying the ups and downs of the real estate market.
It has become a civic embarrassment akin to the giant hole in the middle of the Loop once known as Block 37 before that vacant parcel was finally redeveloped.
“I do understand the sense of embarrassment. It’s a large, empty building in Chicago that should be employing people and earning tax dollars,” Mulryan said Monday.
“But the value of that building has risen significantly in the last three or four years,” he said. “Even if the city takes this building, things won’t move within days or weeks. It may not be quicker doing it this way than sitting down with us and telling us what the city wants and how they can help. This is a building for Chicagoans. It’s not a building for British people. The city should have a greater involvement.”