Chicago Sells the World’s Largest Post Office

Nearly a century ago, the Chicago architectural firm of Graham, Anderson, Probst & White were commissioned by the United States Postal Service to build a grand Neoclassical/Art Deco style building in the central business district of downtown Chicago. The firm was responsible for creating several noted Chicago landmarks including Union Station, the Wrigley Building, and the Civic Opera House. The post office was built in several phases between 1921 and 1932, at a total cost of nearly $22 million.

The post office, located several blocks southwest of Chicago’s Loop, is nine stories tall with corner towers that are 14 stories tall. Because it was built over railroad tracks which end a few blocks north of the building, it does not have a basement. An additional peculiarity of the structure is that the Congress Expressway highway literally passes right through the building. The expressway, a two-story high tunnel, holds six lanes of traffic. The Chicago Post Office is a true Chicago landmark.

During its heyday, there were more than 5,000 postal workers there, processing more than 35 million pieces of mail each year, using 48 elevators and more than 10 miles worth of conveyor belts. Each day more than 6,000 mail trucks and nearly 125 trains carrying mail arrived at the loading docks. The building has been referred to as the world’s largest post office. It is certainly one of the world’s most stunning building designs. The lobby at the north end of the building, which boasts an elaborate inlaid tile marble floor and cream-colored walls of marble, is 40 feet wide and 340 feet long, with an impressive 38-foot high ceiling. They just don’t build buildings like that anymore.

However, the behemoth gradually became obsolete as automation reduced the need for human hands to sort mail. The spacing of columns inside the building, and the high ceilings and boxy floor plans, were not conducive to automated operations, which require more open, horizontal spaces. So in 1996 it was replaced by a new building a block to the south, which was much smaller at 500,000 square feet. Then the Postal Service set about trying to find a way to redevelop the building to incorporate it into the cityscape with a new purpose, working with a Chicago real estate investment firmj, Walton Street Capital. And that’s where the problems began.

At first the building was going to be converted into a facility for storing telecommunications data. But when the telecom market collapsed, and banking regulations about data storage were changed after the 9/11 terrorist attacks, the new regulations made it impossible for a building built over an expressway to be considered for that type of facility. Many other iterations of redevelopment plans followed, without much success. Most recently, the developers considered demolishing about 1/3 of the building and then renovating the remainder into a mixed-use plan including a hotel, residential condominiums, and offices. The cost for the renovation was going to be about $310 million, including $51 million of public funds from the city. But when the economic crisis and recession hit, that plan was also scrapped.

Now, after 13 years of trying to come up with a successful renovation plan, the Postal Service has decided to give up and auction off the 2.7 million square foot building. The suggested opening bid is $300,000 - less than the cost of a condominium in many of the buildings that surround the post office. A spokesman for the Postal Service says they aren’t looking to recoup any of their investment; the huge vacant building costs about $2.5 million each year just for maintenance, utilities, and security.

The main problem with auctioning off the building will not be the winner’s qualifications for buying and developing the property; the question is whether anyone will be able to. The local firm conducting the auction has received dozens of inquiries from other countries in the Middle East and Europe. It’s an amazingly low price for 2.7 million square feet right in the center of Chicago, bordering the Chicago River and close to the elevated mass transit system, but developers would be faced with numerous challenges because of the cost of updating the space. And in the current economy, there is no market for retail, offices, or residential property in the foreseeable future downtown in Chicago.

The Postal Service has several large vacant properties they are in the process of unloading, due to automation and the reduction in the volume of mail being processed, thanks to the Internet. The Chicago post office is the largest of these vacant properties, and is the first one to be put on the auction block. The auction is scheduled to be held on August 27.