The redevelopment of the Old Post Office has reached another important milestone with the signing of Walgreens to lease 200,000 square feet of office space. It was announced a joint press conference held by Mayor Rahm Emanuel, representatives of Walgreens and developer 601W. Though this lease only represents approximately 7% of the total rentable square footage available, the signing of a major national corporate tenant could “give the building a stamp of approval in the eyes of other prospective tenants.” (Ori, Chicago Tribune, 6/18/18)
Schedule for occupancy in 2019, Walgreens will move 1,800 corporate employees to the Old Post, including 1,300 employees from its north suburban Deerfield headquarters campus and 500 employees currently located in the Sullivan Center located in Louis Sullivan’s Carson, Pirie Scott Building on State Street. Walgreens’s headquarters will remain Deerfield where 3,200 employees will remain. This continues the trend of many major Chicago regional corporations moving some or all of their corporate operations from the suburbs into downtown Chicago including Motorola Solutions, Kraft Heinz, FTD, Peapod Hillshire Brands, GE Healthcare, Beam Suntory, and McDonald’s.
“Investing in our infrastructure and building our digital and technical capabilities are essential elements of our business transformation strategy, as we work to improve access for our customers and enhance the customer experience,” said Walgreens President Alex Gourlay in a statement. “The space in the iconic Old Post Office building allows us to attract and retain the best talent from all of Chicagoland.” (Eckner, Crain’s 6/15/18)
“We’re comfortable that we’re not going to be the only tenant here (in the Old Post Office),” said Joe Brady, vice president of real estate at Walgreens. “Frankly, we’re proud to be a catalyst to help this project go even faster.” (Ori, Chicago Tribune, 6/18/18)
Located along the south branch of the Chicago River, and straddling the Eisenhower Expressway, the anticipated contiguous 250,000 square foot office floor plates contributed to the site being frequently mentioned as one of Chicago’s top contenders for Amazon’s second headquarters. The massive building will deliver 2.5 million square feet of Class A office space and is estimated to be able to house approximately 12,000 employees once completed.
601W Companies is the project developer and Gensler is the architecture firm for the massive $600 million renovation plan. According to the Chicago Tribune, renovation of the Post Office represents the single largest redevelopment project in the country. Extensive new amenities will include a three-acre rooftop park/fitness center, a large food market, restaurants, a landscaped riverwalk and outdoor cafes lining the river frontage.
Designed by Graham, Anderson, Probst and White building and completed in 1932, the reuse of this important Chicago landmark building has been a top priority for the preservation community, including Preservation Chicago and Landmarks Illinois, for over 25 years. Multiple schemes had been presented over the years, many which included partial demolition of portions of this massive building. Preservation Chicago testified in opposition to all of the previous development proposals that included partial demolition. We are thrilled that the ongoing restoration work will restore the entire historic structure.
After decades of preservation advocacy since it was shuttered in 1996, the Old Main Post Office was awarded Preliminary Landmark Status at the October 2017 meeting of the Commission of Chicago Landmarks. Preservation Chicago testified strongly in support of awarding Chicago Landmark Designation status to the building and its spectacular two-story lobby. Chicago Landmark Designation protects the 2.8 million-square-foot Art Moderne gem from future demolition or partial demolition.
The Preliminary Landmark Status designation came in the midst of an extensive $600 million renovation of the building and will allow the building to quality for Chicago landmark tax benefits. The Chicago Class L tax benefit is estimated to reduce the building’s $19 million annual tax bill by $4.5 million for the twelve year period of the incentive.
After the previous redevelopment plan by British developer Bill Davies failed, the Art Moderne building was purchased by a New York based developer 601W Companies prior to an eminent domain action by the City. Preservation Chicago testified on behalf of the historic structure at multiple hearings prior to the potential eminent domain noting the preservation community’s long-term commitment to a good outcome for the Old Main Post Office. Preservation Chicago testified strongly in support of the Preliminary Designation of Chicago Landmark status and its spectacular two-story lobby.
Additional Reading
Column: Walgreens deal could bring more Old Post Office leases, Ryan Ori, Chicago Tribune, 6/18/18
Walgreens bringing 1,300 jobs downtown, Danny Ecker, Crain’s Chicago Business, 6/15/18