City closes $500M redevelopment deal for Old Main Post Office

City officials closed a deal Thursday with a buyer that plans a $500 million redevelopment of the Old Main Post Office, the historic, long-vacant eyesore that spans the Congress Parkway entrance to the Loop.

Mayor Rahm Emanuel’s office announced the purchase of the 2.5 million-square-foot building by 601W Companies LLC, the New York-based developer that owns Chicago’s Aon Center and Prudential Plaza.

“Today we are taking another significant step towards transforming the Old Main Post Office site into an economic driver for the City of Chicago,” Mayor Emanuel said in an emailed statement. “This project will create thousands of jobs and generate new economic opportunities for residents in our neighborhoods, while restoring and reviving an iconic gateway to our city.”

In February, Emanuel began steps to use eminent domain to force out Liverpool real estate mogul Bob Davies, who bought the building in 2009 and had pledged to bring billions of dollars to the cause of restoring the building. The Post Office had been empty since the U.S Postal Service moved its operations from the site in 1995.

Soon after the mayor won approval to use eminent domain to turn the building over to other investors, Davies announced a deal was in the works with 601W. Davies’ role, if any, in the new development was not mentioned in the mayoral press release.

Emanuel’s statement outlined a “three-phase renovation plan” to turn the building into office space “primarily targeting commercial users attracted to the building’s 18-foot ceilings and 250,000 square-foot open floor spaces.” In February, Davies had announced plans to convert a portion of the cavernous Post Office into a warren of “micro apartments” as small as 280-square-feet.

The 2-year-long first phase will deal with building code issues, restoration of the facade and replacing the roof and windows, the statement said. The first occupants would move in by 2018, to be lured in by amenities that are to include a 3-acre rooftop park complex of outdoor cafes, event space and a sports and fitness center. The building’s river frontage would be landscaped and turned into a publicly accessible riverwalk.

601W’s three-phase renovation plan will comprehensively rehabilitate the building as offices, primarily targeting commercial users attracted to the building’s 18-foot ceilings and 250,000-square-foot open floor spaces. Amenities will include a three acre rooftop park complex which will include outdoor cafes, events space, and a sports and fitness center complete with basketball and paddle tennis courts and a quarter mile running track. The building’s riverfront space will include a landscaped and renovated Riverwalk as a new public amenity, as well as a grand plaza for outdoor dining and leisure.

Pre-leasing will start in 2017 with initial occupancy targeted for 2018.

Mark Karasick, 601W principal praised the Post Office’s “incredibly unique campus.”

“The building’s scale and architecture will allow us to provide spectacular amenities, green space and services no other building can provide,” Karasick said in the press release.