TRANSMITTAL LETTER FOR BOARD MEETING OF SEPTEMBER 4, 2014
COMMITTEE ON REAL ESTATE
Mr. David St. Pierre, Executive Director
Title
Authority to issue a six (6) month permit extension to the City of Chicago on approximately 4.35 acres of District real estate located at 31st Street and Sacramento Avenue in Chicago, Illinois and known as Main Channel Parcels 42.01 and 42.15 for municipal purposes. Consideration shall be $37,500.00.
Body
Dear Sir:
The District owns approximately 4.35 acres of District real estate located at 31st Street and Sacramento Avenue in Chicago, Illinois and known as Main Channel Parcels 42.01 and 42.15. The City of Chicago ("Chicago") leased the subject real estate from April 1, 1914, to March 31, 2013, for machine and vehicle repairs, carpentry shops, warehouses, municipal offices and other municipal purposes. The annual rent under the lease at the time it expired was $1,200.00. In anticipation of its lease expiration, Chicago requested a new 10-year lease for continued use of the leasehold for the same purposes as under the former lease. On March 13, 2013, the District's Board of Commissioners ("Board") authorized the District to enter into a lease with Chicago for an annual rental fee of $69,000.00. A lease agreement was not entered into, however, as Chicago thereafter requested to purchase the property.
The District then issued an 18-month permit to Chicago to allow continued occupancy and to allow it time to perform environmental testing on the site. The permit expires on September 30, 2014. The permit fee for the 18-month period is $103,500.00. Chicago recently submitted an Environmental Site Assessment report for the subject property which revealed certain environmental conditions due to historical operations at the site.
On July 10, 2014, the Board authorized the General Counsel to commence negotiations for the sale of the subject property. District staff in conjunction with Chicago ordered an appraisal of the property from Appraisal Associates which valued the land at $1,250,000.00. Chicago still has to receive the approval of the City Council to purchase the property. If such approval is granted, staff will request approval for the sale from the Board. Until approval of the sale and purchase of the subject property are received and the closing of the transaction concludes, a permit extension is required.
District policy is to charge 6% of the appraised value of the site to municipalities utilizing District land for municipal purposes other than public recreational use. A permit fee of $37,500.00 is therefore recommended which represents 6% of the appraised value of the site for the six (6)) month period.
It is requested that the Executive Director recommend to the Board of Commissioners that it authorize and approve the issuance a six (6)) month permit extension to the City of Chicago on 4.35 acres of District real estate located at 31st Street and Sacramento Avenue in Chicago, Illinois and known as Main Channel Parcels 42.01 and 42.15 for municipal purposes. Consideration shall be $37,500.00.
Requested, Ronald M. Hill, General Counsel, RMH:STM:MLD:vp
Recommended, David St. Pierre, Executive Director
Respectfully submitted, Mariyana T. Spyropoulos, Chairman Committee on Real Estate Development
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for September 4, 2014
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