William Zbaren for The New York Times
The post office is often described as the world’s largest. At its peak, 5,000 workers processed more than 35 million letters annually, using 10 miles of conveyor belts and 48 elevators.
CHICAGO — After 13 years of failed redevelopment efforts, the United States Postal Service is giving up and auctioning off its largest vacant property: the hulking 2.7-million-square-foot old central post office here.

William Zbaren for The New York Times
Rick Levin, president of a local firm that will conduct the auction, acknowledged that in the building's current state, it represents a significant challenge to developers.
The suggested opening bid for the auction is $300,000, which is less than an individual condominium goes for in many of the surrounding downtown buildings.
“We’re not looking to recoup any investment here,” says Tom Samra, vice president of facilities for the postal service in Washington. “We’re going to let the auction decide what the ultimate value is.”
The service is also not overly concerned about the winning bidder’s qualifications or ability to develop the property. “A qualified bidder is someone who can close on it in 30 days,” Mr. Samra said. “Potentially anyone with $300,000 could buy this.”
The question, however, is whether anyone will.
Rick Levin, president of a local firm that will conduct the auction, to be held on Aug. 27, said that he expected “a strong handful of bidders” and that he had received inquiries from as far away as Europe and the Middle East.
“It’s a very attractive price for 2.7 million square feet of space in downtown Chicago,” he said. But even he acknowledges that in its current state the building, which measures 800 feet long and 350 feet wide, represents a significant challenge to developers.
“It’s not the cost of acquisition people need to focus on,” Mr. Levin said. “It’s the cost of updating. The minimum bid could have been a dollar. We made it $300,000 in order to weed out complete amateurs.”
Another drawback is maintaining the building, which — even in its current vacant state — costs about $2.5 million annually for utilities, maintenance and security.
The behemoth, which is nine stories tall with 14-story corner towers, is several blocks southwest of the Loop, the downtown central business district. It was designed by Graham, Anderson, Probst & White in a Neoclassical/Art Deco style and built in phases from 1921 to 1932. (Graham, Anderson is the firm responsible for Chicago landmarks like the Wrigley Building, the Civic Opera House and Union Station.) The total cost was $22 million.
A peculiarity of the building is that it was built using air rights over railroad tracks that terminate several blocks to the north, at Union Station, and so it has no basement. In addition, the Congress Expressway literally passes through the structure. The two-story-high tunnel carries six lanes of traffic.
The building is often described as the world’s largest post office. At its peak, 5,000 workers processed more than 35 million letters annually, using 10 miles of conveyor belts and 48 elevators. Every day, more than 125 trains and 6,000 trucks arrived at the facility.
Gradually, however, the building became obsolete as the mail-sorting process was automated. “The column spacing and the ceiling height do not work for automated operations,” Mr. Samra said. “Automated operations require a more horizontal building.”
In 1996, it was replaced by a much smaller building — 500,000 square feet — a block south. Still, there is considerable nostalgia for the old facility.
“I miss the grandeur of the lobby,” said Musette Henley, who worked in the building in a variety of jobs from 1961 until its closing day and is now a customer relations representative in the new facility. “They don’t build buildings like that anymore.”
The imposing Neoclassical lobby at the north end of the building, which has cream-colored marble walls and an elaborate inlaid marble floor, is certainly a stunner: 340 feet long and 40 feet wide, with a towering 38-foot ceiling.
For more than a decade, the Postal Service has been working with Walton Street Capital, a Chicago-based real estate investment firm, to find a new use for the building, with a notable lack of success. “There have been many iterations of redevelopment possibilities, and market demand has come and gone,” said Raphael Dawson, a principal of the firm.
One early plan called for the building to be converted into a huge telecommunications data storage facility. That plan, however, was derailed by the collapse of the telecom market as well as by changes in banking regulations pertaining to data storage after the Sept. 11 terrorist attacks. The new regulations made a building constructed over an expressway a problematic candidate for such a facility.
The most recent scheme called for demolishing about a third of the building and renovating the rest into a mixed-used structure including offices, a 236-room hotel and 300 residential condominiums, at a cost of about $310 million.
This plan — which involved $51 million in public money from the city — came closer to breaking ground than many of the others, but it ultimately fizzled this spring because of the economic crisis.
“The crux of the issue has always been getting all of the markets to align properly at a time when you could get them financed,” Mr. Dawson said.
Another problem, he added, was the sheer number of agencies with an interest in the development. In addition to having the expressway and railroad tracks, the building borders the Chicago River and is near the city’s elevated mass transit system. “Just about every governmental body you can imagine has some role in making this project work,” he said.
The reaction to the auction has been subdued. John O’Donnell, the president and chief operating officer of the John Buck Company, one of the city’s largest developers, said he had no plans to bid on the property.
“What can you possibly do with it?” he asked. “There’s nothing developable downtown for the foreseeable future in any category. There’s no retail market, no office market and no residential market.”
Thomas Kirschbraun, international director of Jones Lang LaSalle, a large developer and real estate services firm here, expressed similar feelings. “Given the size of it and the condition of the financial markets today, it’s impossible,” he said.
Indeed, many equate the building with Block 37, the square block on State Street in the Loop that remained vacant for some 20 years before finally being redeveloped in the last few years.
“It’s certainly one of the more significant pieces of unfinished business downtown,” said Michael Jasso, managing deputy commissioner for the city’s Department of Community Development.
The auction is one of many that the Postal Service expects to conduct as it begins a major downsizing effort aimed at aligning capacity with declining volume.
By some measures, the Postal Service is the largest government landlord, with a portfolio of 34,000 properties encompassing 314 million square feet of space across the country. About a third of these facilities are owned; the rest are leased.
“We own the larger properties, which are mainly mail processing centers, and lease the smaller ones, which are mainly post offices,” Mr. Samra said.
After the old post office in Chicago, the second-largest vacant property is a 1.5-million-square-foot mail processing facility in Jersey City.
“We’re trying to relate the needs and facilities to the changes,” Mr. Samra said. “We believe some facilities will not be needed in the future.”