July 22, 2011--The owner of the Chicago's old post office building on Thursday unveiled a grandiose plan for redeveloping the long-vacant property and the area around it, including a 2,000-foot skyscraper that would dethrone the Willis Tower as the city's and North America's tallest building.

The owner, British developer Bill Davies, promises to transform the area into an "urban mecca" of five residential, office and hotel towers that would draw visitors from around the Midwest. Yet the three-phase project, which Davies wants to complete in 10 years, faces economic hurdles due to the weak economy and still struggling retail sector.

"It's a pipe dream -- is it doable?" said Gail Lissner, vice president of Appraisal Research Counselors in Chicago.

Completed in 1932, and located at 433 W. Van Buren St., the massive building was once the world's largest post office. The building, which straddles the Congress Street feeder ramp leading to the Eisenhower Expressway, has been vacant since 1995. It has been the subject of several redevelopment plans, including a casino, a water park and an auto mall. None have succeeded.

Davies bought the building in 2009 for $24.8 million, and is apparently convinced it has a future as something other than a white elephant. While Davies doesn't spell out plans for a casino, Lissner said his plans could accommodate one. For now, his vision is for 6.2 million square feet of leisure, retail and entertainment space; 4.1 million square feet of hotels; 2 million square feet of office space; and 3.8 million square feet of residential space — a total of 16 million square feet.

"His concept is that it is not big enough," said Laurence Booth of the Chicago firm Booth Hansen, the designer of the project.

The first phase of the $3.5 billion project calls for converting the inside of the Old Post Office into retail shops and hotel rooms. The west side of the building would house a garage with ramps that would feed directly into Congress Parkway. The Beaux Arts-inspired marble and gold lobby would be restored to its original glory and serve as the entrance to the shops and a 40-story hotel with views of the Chicago River.

Davies plans to expand the project into three other sites: An empty lot south of West Harrison Street tucked between the Chicago River and South Wells Street; a lot south of Congress Parkway now home to a Holiday Inn and a parking lot; and the site adjacent to the Old Post Office known as the "Sugar House."

He has rights to buy the those properties but has not closed on the deals. Davies has secured financing for the first phase of the project, but will need financing for the other two phases, said Martin Mulryan, project manager for the Davies-owned International Property Developers.

The plan, which was filed with the city Thursday, requires City Council and Plan Commission approval. If the plan is approved, the company can move ahead with the $450 million first phase within 90 days, Mulryan said.

Each phase would take three years each to be completed. The second phase, at a cost of about $2 billion, calls for a 60-story hotel on the current site of the Holiday Inn and adjacent parking lot, plus a 120-story skyscraper at the site of the Sugar House. It would be used for offices, hotel and residential space. The buildings would be raised over a 10-floor platform that would house more retail space.

The final phase calls for the development of the now empty site along the river. It would house 10 floors of retail space and a parking lot, forming a foundation for two 60-story residential towers.

All together, the 10-story base would contain parking for 12,000 cars. The majority will free for shoppers.

"The only way you are going to get people to come in from the burbs is by car," Booth said.

The 120-story tower would measure 2,000 feet to its roof, making it more than 500 feet taller than the Willis Tower. If built, the tower would top the 1,776-foot One World Trade Center now under construction in New York City. Communications antennas would spring from its roof, generating revenue for the owner.

To connect the building's retail spaces on both sides of the river, Davies plans to built a multi-story bridge with space for more retail shops and restaurants. Such a move could prove controversial because it would block views of the river.

Peter Strazzabosco, a spokesman for the city's Department of Housing and Economic Development said the developers had met with city staff periodically over the last two years, but declined to comment on the plan.

Davies, who has appeared on the Times of London's list of England's richest people, bought a dilapidated post office in 1986 in Liverpool, England and sold it 16 years later in the same blighted condition, angering local politicians.

The future of Davies' project depends of the ability of companies to create jobs, said Chris Macke, senior real estate strategist for the CoStar Group, a real estate research firm.

"If people are hired, more people would stay in hotels, more people would buy condos and rent apartments," Macke said.

But Lissner said that while the Davies' plans are ambitious, his multi-phase project would take years to finish and could benefit from an improved economy. Its advantages are that it would sit close to the expressways, the CTA Blue line and Union Station.

Despite the tough economic climate, Booth predicted, people will eventually flock to the complex because they have "an insatiable appetite for experience and excitement and places they haven't been."

Experience shows that it is far easier to announce plans for a towering skyscraper than to build one. Another overseas developer, Ireland's Garrett Kelleher, promised to build the 2,000-foot Chicago Spire -- only to see his dream collapse and his creditors file lawsuits demanding millions of dollars in payments. For three years now, construction on the 1,047-foot Waterview Tower at 111 W. Wacker Dr. has been halted at the 26th floor, leaving its exposed concrete skeleton looming over the Chicago River.

Booth is no stranger to controversial skyscraper plans -- and to the difficulty in getting them built.

In 2007, along with developers James Klutznick and Tim Anderson, he unveiled his design for a 49-story, glass-sheathed condominium tower in north suburban Evanston. At 523 feet, it would have been the tallest building in Chicago's suburbs.

But many Evanston residents argued that the tower would be an over-scaled monstrosity and would uproot local merchants. In response, the plans were dramatically downscaled and in 2009, Evanston approved a downtown height limit of 35 stories.

The project has yet to break ground.

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