Sale of downtown St. Paul post office in negotiation

The U.S. Postal Service, which has been trying for more than three years to unload its towering art deco post office in downtown St. Paul's Lowertown district, is negotiating the sale of the building with a potential buyer.

Five developers submitted bids to purchase the 17-story building on Kellogg Boulevard, which lost its mail-sorting operations in 2010 and will shut down its remaining retail and delivery services in two weeks, Postal Service spokesman Peter Nowacki said.

That's not the only downtown post office slated to close. The last day for customer service at the Hamm Building post office at E. 6th and St. Peter streets will be March 23, he said.

Both locations will be consolidated at a new downtown retail center scheduled to open Feb. 19 in the U.S. Bank building at E. 5th and Robert streets, about two blocks north of the Kellogg site. The entrance will be on the street level off Robert, Nowacki said.

The new post office "meets in the middle of where the two previous locations were, in a good central spot downtown," Nowacki said. "We'll have a facility that can accommodate customers from both of the facilities."

The 80-year-old post office building in Lowertown, named in 1988 for former St. Paul resident U.S. Sen. Eugene McCarthy, has been on the market since 2009 but until now has drawn little interest.

After one potential deal fell through last fall, the CBRE Group solicited new offers for the 750,000-square-foot building, asking $5 million.

Nowacki said the Postal Service hopes to have everything out of the building by the end of March.

The new downtown post office location is 3,000 square feet, he said -- a size better suited to the postal business done downtown. It will include offices for the postmaster, administrators and inspectors, he said.

In the past few years, city officials have talked about converting the Kellogg post office into a hotel, apartment residence or office tower.

Finance and Commerce newspaper reported that George Sherman, head of Minneapolis-based Sherman Associates, said his company had bid on the building with plans to turn it into market-rate apartments. Sherman did not return a phone call seeking comment on Friday.

Joe Campbell, a spokesman for St. Paul Mayor Chris Coleman, said city leaders look forward to seeing what happens.