The owner of the Old Post Office recently announced the ambitious plans for a massive reconstruction of the property. Included in the plans is a tower that, if built, would be the tallest building in North America.
The 120-story tower is the centerpiece of the $3.4 billion, 16-million-square foot development plan proposed by Bill Davies, the British developer who paid $24 million for the post office two years ago. The Old Post Office is located at 433 West Van Buren Street, and this new development will straddle the Chicago River.
“He sees this as a gateway to the city,” says Martin Mulryan, the project manager overseeing the development, in an article for Crain’s ChicagoRealEstateDaily.com.
Davies plans to create an oasis of entertainment, shopping and restaurants for Midwesterners. Music venues and theaters are an option for the complex, but there will not be a casino like many people suspected.
Critics doubt that Davies will be able to pull off such a huge project especially in today’s real estate market. The development is heavy on retail, which is currently one of the weakest property sectors.
However, according to Mulryan, construction is expected to take at least 10 years and will be phased, allowing the developer to build as demand for space returns.
The development will cover 20 acres and include 6.2 million square feet of retail and entertainment space. There will be 7,500 hotel rooms, 2 million square feet of office space, and about 1,500 residential units. There will also be 12,000 free parking spaces for shoppers.
“That’s the idea, to have everything,” says Laurence Booth, principal of Booth Hansen, the Chicago-based architecture firm working on the project in the article. “So people will come from all over — by car, by train, by boat and get everything they want.”
While Davies is anxious to get construction started, the approval process for zoning changes could any where from a couple months to a few years. He plans to start construction within 90 days of receiving approval from the city. The post office will be the first to be converted once approval has been received.
The developer has signed contracts to buy parcels that neighbor the complex, but would not disclose terms.
The development is six times the size of the previous redevelopment plan set forth by Chicago-based Walton Street Capital, LLC. The project is much bigger than observers expected.
The question now is whether he will be able to attract enough hotel investors, retailers, residents and office tenants to a project on the fringe of downtown Chicago – and then whether Davies can attract any investors. The development firm, however, has already received a number of inquiries from hoteliers and retailers, but it will not start formally marketing the project until zoning is approved.
“It’s a very ambitious project in the market for a location that’s a little off-center,” says Richard Souyoul, president of Chicago-based Souyoul Development Group, to Crain’s.
“Years ago, there were those who doubted the Museum Campus and those who doubted Lakeshore East or Millennium Park,” Davies says in a news release, according to the article. “I would challenge any cynic to look to those developments and then tell me this can’t be done. I am confident that with the correct focus and energy and by working in partnership with this great city, that we will achieve our goal.”