The historic post office in downtown Palo Alto may become the next victim of the Postal Service’s financial problems.
Representatives of USPS told City Council Tuesday night that the 20,300 sq. ft. building on Hamilton Avenue is too big, too costly, and too valuable to remain in their hands.
The crux of the problem, said USPS Spokesperson James Wigdel, is the precipitous decline in first class mail volume afflicting the government agency.
213 billion pieces of mail were processed in 2011, he said, a number expected to drop to as low as 118 billion pieces annually by 2020. There has been a 25 percent drop in first class mail in the last five years.
“First class mail is simply going away, and first class mail is our bread and butter,” said Wigdel.
Revenues have consequently been dropping as well, he said. USPS pulled in $65.7 billion in 2011, down from $67.1 billion the previous year.
As such, the entire organization is under a mandate to streamline operations, in part by selling off or downsizing offices housed in valuable or large buildings.
“By relocating in to what we consider to be a right-size space, we would have an annual savings of over $100,000 a year,” said Diana Alvarado, a representative from the USPS Pacific Facilities Service Office.
Alvarado said staying on Hamilton would be a priority, and that any change to the current office is contingent upon finding an acceptable buyer for the property as well as a suitable new location—ideally around 3,500 sq. ft. in size.
Selling off property is nothing new for the Postal Service. The agency maintains a website of available properties, and has seen new occupants use their buildings for anything from bed-and-breakfast hotels to law offices and financial services companies.
Regardless of the outcome, mail delivery will not be affected, and existing post office box customers will keep their same box numbers at the new potential location.
Council members were skeptical of any plan to relocate, citing the high cost of commercial real estate downtown.
“Good luck in finding reasonably priced commercial property in Downtown Palo Alto,” said Council Member Pat Burt. He asked if USPS might simply consider downsizing.
“Why wouldn’t that be your first choice?” he said.
“It is a choice,” responded Alvarado.
Public speakers were generally relieved that the Postal Service was not planning to simply up and disappear, as many had feared.
“I am somewhat reassured in learning that the post office is interested in relocation,” said Priscilla Bates. “I think we do need a post office location downtown. I come down very frequently myself, and it’s easy to go to the post office while I’m doing a number of other errands. To me it’s an ideal location for the post office, and I don’t want it to move anywhere else.”
The city council ultimately voted to appraise the value of the property and itself consider purchasing it.