Exclusive: Local developer Hudson McDonald in contract to buy downtown Berkeley Post Office

Post Office by Darius Wekwerth — A Berkeley developer plans to turn the city’s main Post Office into a retail operation while retaining postal services. Photo: Darius Wekwerth

After weeks of silence, Berkeley developer Hudson McDonald has acknowledged that it is the company that is negotiating with the USPS to buy the main Berkeley Post Office at 2000 Allston Way.

If successful, Hudson McDonald, which is best known for the construction of the Trader Joe’s building on University and MKL Jr. Way, said it plans to restore the 1914 building and develop the back for retail operations while offering the Post Office the opportunity of continuing to use the front lobby for postal services.

“There is a lot to be determined,” Chris Hudson, co-principal with Evan McDonald of the developer, said Tuesday. “But we want to preserve and restore the building, including retrofitting it, and we are having a conversation with the post office about them being tenant in the front part.” Currently about 80% of the building is empty.

Hudson said the Post Office had received several offers for the building but that Hudson McDonald was the only bidder in negotiation with USPS.

Stressing that the discussions were in early stages, and that buying a historic public property was a complicated process, Hudson said: “Our goal is to generate revenue for the city, repurpose the building, and have it continue to function as a post office.”

He confirmed Hudson McDonald had no plans to create residences in the building or put it in private use.

“As Berkeley residents, we would like to see this building not become a private use building,” he said.

Hudson said he understood at least one of the other interested parties was a nonprofit that would not need to pay property taxes to the city if it purchased the building.

Berkeley Mayor Tom Bates said today he understood that Hudson McDonald was talking to Ace Hardware about the possibility of them moving into the post office building. Bates said that could be a win-win for downtown Berkeley but that the city council was not supporting the developer’s proposal because it’s not supporting taking the building in that direction. Ace Hardware needs to move out of its 2145 University Avenue location because it is going to be developed as the 205-unit Acheson Commons apartment complex.

Hudson would not disclose the price the developer has offered to pay for the post office, and said it could change depending on disclosures such as the cost of retrofitting the building.

The main Berkeley post office has been at the center of a long-drawn-out and fiercely argued debate within the Berkeley community and government ranks ever since USPS announced it would sell the Renaissance Revival-style building in June 2012.

Read Berkeleyside’s coverage of the fight over the downtown post office

Last month, Berkeley city attorney Zach Cowan was made aware that someone was in contract to buy the post office and he told the City Council that it was necessary for the city to file a lawsuit against the U.S. Postal Service to stop the sale.

On Wednesday, Berkeley filed for a temporary restraining order to stop the sale in federal court. There will be a hearing on the matter on Monday, Nov. 10, according to Antonio Rossmann, the private attorney retained by Berkeley to fight the post office sale.

The entire City Council unanimously opposes the sale and has tried a number of maneuvers to stop it, including the recent rezoning of the Civic Center core. The new law says the historic buildings in the core, including the old City Hall and the Veteran’s Building, cannot be used for commercial purposes, although community purposes are allowed. Height limits are capped at 50 feet, or the height of old City Hall.

There have been numerous demonstrations and camp-outs on the steps of the post office by Save the Berkeley Post Office and other groups who protest the building’s sale.

Demonstrators gathered outside the main Berkeley post office on Nov. 1 protesting its sale. Photo: Ted Friedman — Demonstrators gathered outside the main Berkeley Post Office on Nov. 1 protesting its sale. Photo: Ted Friedman

Cowan said last month he had directed outside counsel to initiate litigation against the USPS to prevent the sale of the Allston Way building. “We are working closely with the National Trust and have asked them to participate in the litigation as well,” he told Berkeleyside.

Asked about the potential lawsuit, Hudson said he hoped it could be avoided.

“Once people see what’s going on perhaps there will be no need to file a lawsuit,” he said. “That was a reaction to something that doesn’t have to come to pass. We think we are the best potential buyer for the post office.”

He added that both Hudson McDonald and the post office want to reach an agreement that works for Berkeley.

“We know Berkeley,” he said. “It’s a complicated issue and there are a lot of emotions around it.”

Mayor Bates said he thought there could be a long legal battle ahead, however. “Nothing is going to be decided quickly,” he said Wednesday.

Hudson said he didn’t know how long the negotiations would last. He said the post office had many hoops to jump through, not least as the building is on Historic Register.

“Once those processes have been completed we can create a plan and get on a timetable,” he said.

Hudson McDonald, which is based in Berkeley, says it specializes in developing complex infill projects on under-utilized properties. Along with the Trader Joe’s building, its projects include the recently completed Metropolitan student housing building next to Berkeley City Club on Durant, and the Delaware apartment complex in West Berkeley.

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Tracey Taylor