OLD CHICAGO MAIN POST OFFICE

CASE STUDY

THE PROJECT

$800-million redevelopment of the Old Chicago Main Post Office.

OUR CLIENT 601W Companies, a New York-based private investment group owns a diversified commercial real estate portfolio aggregating 24 million square feet, with a collective value in excess of $5 billion.

BACKGROUND

Abandoned for more than 20 years, the Old Chicago Main Post Office has weathered several failed attempts at redevelopment until 601W Companies won approval from the City of Chicago to purchase the dilapidated 1920s-era building and transform it into Class A high-tech commercial office and retail space.

Chicago had planned to take over the property through eminent domain before 601W Companies stepped forward with an interest in acquiring the property. As a condition of approving the project (and memorialized in a consent decree), the city instituted requirements for historic preservation, use of certified MBE and WBE subcontractors and minimum levels of city residency for companies’ employees working on the project.

The scope of the renovation and redevelopment project is significant. The building contains more than 2.5 million-square-feet of commercial space, covering two square blocks of downtown Chicago along the Chicago River. It sits over several active commuter and Amtrak rail lines, and one of the city’s main expressways bisects it. The renovation encompasses the replacement of several acres of roof, as well as the installation of 2,600 new windows and all new building mechanicals, not to mention remediation and removal of significant amounts of asbestos-containing materials and lead paint.

HOW GOULD & RATNER HELPED

Acquisition Our real estate lawyers acted as counsel for 601W Companies in its $130-million purchase of the Old Post Office, which included coordinating various levels of governmental review and approvals, including U.S. government approvals due to the proximity of the Amtrak rail lines and the bisecting Interstate 290, as well as Cook County and City of Chicago requirements for zoning, environmental and historic preservation.

Additionally, we provided counsel related to compliance with the consent decree and negotiated various agreements with the City of Chicago regarding the purchase and redevelopment of the building. Finally, we also provided counsel for the initial bridge loan financing of the deal from JPMorgan Chase.

Refinancing/Construction Loan Our lawyers helped 601W Companies secure a refinance totaling more than $800 million, with JPMorgan Chase as the primary lender.

Construction Project Counsel Since the project kicked off in mid-2017, our construction lawyers have taken an active role in nearly all aspects of the renovation and redevelopment of the Old Post Office. Before the general contractor was hired, our lawyers were involved in counseling our client on numerous pre-construction issues. Once the renovation began, we have been drafting, negotiating and reviewing all construction contracts, as well as maintaining reporting compliance with the aforementioned MBE, WBE and residency mandates established by Chicago.

In addition, we have been assisting with the review of change orders and other project issues, helping to prevent claims and, when necessary, resolving them.

We also drafted and negotiated specific easements and contracts for services to the building, as well as more generally advised our client on legal matters relating to the redevelopment, including insurance issues, historic preservation and right of access.

Leasing

We have assisted our client in negotiating all of the commercial tenant leases in the renovated building, including:

• Uber, a multinational transportation network, occupying 460,000 square feet

• Walgreens, the second largest American pharmacy chain, occupying more than 200,000 square feet

• Home Chef and 84.51, two different tenants but both subsidiaries of Kroger, occupying 150,000 square feet and 57,000 square feet respectively

• Federal Home Loan Bank, a government sponsored financial institution, occupying 125,000 square feet

• Ferrara Company, a candy manufacturer, occupying 110,000 square feet

• Abelson Taylor, a health and wellness focused advertising agency, occupying 84,000 square feet

• Chicago Metropolitan Agency for Planning (CMAP), occupying 47,000 square feet

• Chicago Board Options Exchange (CBOE), occupying 185,000 square feet

HISTORIC PRESERVATION

The Old Post Office is a certified national historic property. All alterations require the approval of the state historic authorities and the National Park Service. As a historic structure, the property is eligible for historic tax credits.

We also assisted 601W Companies in modifying the ownership structure, organizational documents and existing loans to create a master lease for the property that uses the historic tax credits to fund part of the building’s renovation.

FUTURE PLANS

The primary construction project should be completed in late 2020. Our real estate and construction lawyers will continue to be involved in representing 601W Companies in all future lease negotiations, as well as any continuing construction claims arising from the project.

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For more than 75 years, Gould & Ratner LLP has provided comprehensive legal counsel and business advice to Fortune 500 corporations, closely held businesses, financial institutions and entrepreneurs, as

well as families and their businesses in real estate, litigation, corporate, tax, estate and succession planning,

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