TRANSMITTAL LETTER FOR BOARD MEETING OF MAY 19, 2016
COMMITTEE ON REAL ESTATE
Mr. David St. Pierre, Executive Director
Title
Consent to an assignment of sublease from an Assignee/Trustee, acting on behalf of and for the benefit of Pure Metal Recycling, LLC, to B.L. Duke Inc. of approximately 23.5 acres of District real estate located west of the Des Plaines River and south of the CN Railroad in Crest Hill, Will County, Illinois; Main Channel Parcel 12.01. Consideration shall be a $5,000.00 document preparation fee
Body
Dear Sir:
Sheffield Steel Corporation (“Sheffield”) leases 38 acres of District real estate located west of the Des Plaines River and south of the Canadian National Railway in Crest Hill, Will County, Illinois and identified as Main Channel Parcels 12.01 and 13.01. Sheffield produces forged steel and fabricated metal products. The lease commenced in 1954 and expires in 2053. Sheffield’s annual rent is $3,500.00. Sheffield’s lease allows it to sublease or assign the lease subject to the District’s consent.
On January 20, 1994, the District entered into a Consent to Sublease with Sheffield and Seeler Industries, Inc. (“Seeler”), wherein the District consented to a sublease of 23.5 acres of the leased premises from Sheffield to Seeler. The sublease has since been assigned to Pure Metal Recycling, LLC (“Pure Metal”). Pure Metal uses the sublease area for processing, bundling, loading, and unloading scrap iron and metal; storing items such as containers and semi-truck trailers; and parking motor vehicles in conjunction with these business activities, all permitted uses under the Sheffield lease. The sublease agreement is subject to decennial reappraisals. Under the sublease, Pure Metal currently pays an annual rent of $72,000.00, all of which is paid directly to the District. Such rent is based upon a March 2014 reappraisal.
On December 10, 2015, Pure Metal executed an “Assignment for the Benefit of Creditors” that assigned all of its assets, including the sublease, to an Assignee/Trustee (“Assignee”) for liquidation purposes. As part of this liquidation, the Assignee has requested the District’s consent to an assignment of the sublease to B.L. Duke Inc. (“B.L. Duke”). B.L. Duke intends to use the sublease area for the same purposes as did Pure Metal. The assignment will be conditioned upon the annual rent being subject to annual CPI increases. The District’s Finance Department has reviewed B.L. Duke’s financial and company background information and recommends that a security deposit in the amount of one-year’s rent be posted to further ensure payment of rent under the sublease. Additionally, the prior subtenant, Seeler, remains liable under the sublease.
It is requested that the Executive Director recommend to the Board of Commissioners that it consent to an assignment of sublease from an Assignee/Trustee, acting on behalf of and for the benefit of Pure Metal Recycling, LLC, to B.L. Duke Inc. of approximately 23.5 acres of District real estate located west of the Des Plaines River and south of the CN Railroad in Crest Hill, Will County, Illinois; Main Channel Parcel 12.01. Consideration shall be a $5,000.00 document preparation fee.
It is also requested that the Executive Director recommend to the Board of Commissioners that it authorize and direct the Chairman of the Committee on Finance and the Clerk to execute said Consent to Assignment of Sublease Agreement after it is approved by the General Counsel as to form and legality.
Requested, Ronald M. Hill, General Counsel, RMH:STM:CMM: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 May 19, 2016
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