TRANSMITTAL LETTER FOR BOARD MEETING OF MARCH 7, 2013
COMMITTEE ON REAL ESTATE
Mr. David St. Pierre, Executive Director
Title
Authority to enter into a 10-year lease agreement with the City of Chicago for the continued use of approximately 4.35 acres of improved District real estate located at 31st Street and Sacramento Avenue, Chicago, Illinois along the Collateral Channel, on Main Channel Parcels 42.01 and 42.15 for municipal corporate purposes. Consideration shall be an initial annual rent of $69,000.00
Body
Dear Sir:
The City of Chicago ("Chicago") leases approximately 4.35 acres of District real estate under a lease agreement between Chicago and the District that commenced April 1, 1914 and expires March 31, 2013. The original permitted use was for machines, vehicle repairs, carpentry shops, warehouses, municipal office buildings, and other municipal purposes. The current annual rent is $1,200.00.
Chicago has requested a new 10-year lease upon the expiration of its current lease to continue to use the leasehold for the same use as allowed under its current lease. The District's technical departments have reviewed the subject request and reported that there are no objections to granting Chicago a 10-year lease agreement.
The parties have obtained appraisals on the leasehold site as follows:
Appraiser Value
Appraisal Associates $1,150,000.00
William J. Enright, MAI
(District's appraiser)
Byrnes, Houlihan & Walsh, LLC $1,100,000.00
Michael Walsh, MAI
Gibbons & Sidu, Ltd. $1,040,000.00
James Gibbons, MAI
It is District policy to assess the annual rent based upon 6% of the sites' highest appraised value when leasing District real estate to a governmental entity for non-recreational purposes.
It is recommended that the subject real estate's fair market value be based upon the highest of the three appraised values and established at $1,150,000.00, and that the annual rent be established at 6% of the site's fair market value or $69,000.00.
Under 70 ILCS 2605/8c(11), said lease will be terminable upon one-year notice if it is determined that the premises become essential to the District's corporate purposes.
It is requested that the Executive Director recommend to the Board of Commissioners that it authorize and approve a 10-year lease agreement with the City of Chicago for the continued use of approximately 4.35 acres of improved District real estate located at 31st Street and Sacramento Avenue, Chicago, Illinois for municipal corporate purposes. Consideration shall be an initial annual rent of $69,000.00.
It is further requested that the Executive Director recommend to the Board of Commissioners that the Chairman of the Committee on Finance and the Clerk be authorized and directed to execute said lease agreement after same is approved by the General Counsel as to form and legality.
Requested, Ronald M. Hill, General Counsel, RMH:STM:MLD:ldl
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 March 7, 2013
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