TRANSMITTAL LETTER FOR BOARD MEETING OF MAY 2, 2019
COMMITTEE ON REAL ESTATE
Mr. Brian A. Perkovich, Executive Director
Title
Authority to grant a 25-year, 265,859+ sq. ft. non-exclusive easement to Chicap Pipe Line Company to continue to operate, maintain, repair, replace and remove a cathodic protection unit and a 14-inch pipeline traversing District land south of the Cal-Sag Channel between Kostner and Hamlin Avenues and suspended over the Cal-Sag Channel east of Hamlin Avenue in Crestwood, Robbins, and Alsip, Illinois. Consideration shall be an initial annual fee of $47,323.00
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Dear Sir:
Chicap Pipe Line Company (“Chicap”) operates and maintains a 14-inch crude-oil pipeline through Cal-Sag Channel Parcels 12.02, 12.05, 12.06, 12.09, 13.03 and 13.04 and suspended over the Cal-Sag Channel east of Hamlin Avenue in Crestwood, Robbins, and Alsip, Illinois under two separate easements.
The first easement was granted by the District on April 2, 1964, for a 25-year term to construct and operate Chicap’s pipeline on the subject District parcels except for Parcel 12.05. The easement, as extended, expires May 27, 2019. The current annual easement fee is $22,159.23. At the time the 1964 easement was granted, the Department of Army (“Army”) owned a section of Parcel 12.05 for the Cal-Sag Navigation Project. As such, the second easement was granted by the Army in 1968 for a 50-year term (“Army Easement”) to construct and operate the section of the pipeline on Parcel 12.05. The Army Easement expired November 25, 2018.
In June 2000, the Army no longer needed its section of Parcel 12.05 and deeded it back to the District. On October 18, 2018, the Board granted an interim 6-month easement to Chicap for continued operation of its pipeline on Parcel 12.05 and for maintaining a cathodic protection unit (“CPU”) servicing the pipeline. This easement expires May 27, 2019, and was subject to a $5,000.00 fee.
Chicap has requested a new single 25-year, 265,859+ sq. ft. non-exclusive easement to continue operating its pipeline and CPU. The District’s technical departments have reviewed Chicap’s requests and have no objections thereto. An easement fee of $47,323.00 is recommended, which represents 10% of the appraised fair market value of the easement premises.
It is requested that the Executive Director recommend to the Board of Commissioners that it grant a 25-year, 265,859+ sq. ft. non-exclusive easement to Chicap Pipe Line Company to continue to operate, maintain, repair, replace and remove a cathodic protection unit and a 14-inch pipeline traversing District land south of the Cal-Sag Channel between Kostner and Hamlin Avenues and suspended over the Cal-Sag Channel east of Hamlin Avenue in Crestwood, Robbins, and Alsip, Illinois. Consideration shall be an initial annual fee of $47,323.00.
It is also requested that the Executive Director recommend to the Board of Commissioners it authorize and direct the Chairman of the Committee on Finance and the Clerk to execute the easement agreement after it is approved by the General Counsel as to form and legality.
Requested, Susan T. Morakalis, General Counsel, STM:CMM:vp
Recommended, Brian A. Perkovich, Executive Director
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for May 2, 2019
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