TRANSMITTAL LETTER FOR BOARD MEETING OF JUNE 6, 2013
COMMITTEE ON PROCUREMENT
David St. Pierre, Executive Director
Title
Authority to advertise Contract 13-363-11 for public tender of bids a 39-year lease on approximately 10,086 square feet of District real estate located along the east bank of the North Branch of the Chicago River adjacent to 4130 North Rockwell Street in Chicago, Illinois
Body
Dear Sir:
On June 7, 2012, the District's Board of Commissioners authorized the commencement of statutory procedures to lease approximately 10,086 square feet of real estate located along the east bank of the North Branch of the Chicago River adjacent to 4130 North Rockwell Street in Chicago. Ravenswood Boatyard, LLC ("Ravenswood") currently occupies the site to use and maintain a boat dock in connection with its recreational watercraft storage business under a permit that expires June 30, 2013. The current annual permit fee is $12,000.00.
Pursuant to statute, the lead applicant, Ravenswood, submitted two appraisals and the Law Department obtained an appraisal as follows:
Appraiser Value
William J. Boyle & Associates
William J. Boyle, MAI $ 65,000.00
James O. Hamilton & Company, Inc.
James O. Hamilton, MAI $ 65,000.00
Appraisal Associates, Inc.
William J. Enright, MAI $130,000.00
(District's appraiser)
It is recommended that the subject real estate's fair market value be based upon the highest of the three appraisals and established at $130,000.00 ($12/sq. ft.) and that the minimum annual rental bid be established at 10% of the property's fair market value or $13,000.00.
The District had obtained a third appraisal by Cohn Reznick on this site that valued it at $300,000.00 or $30/sq. ft. The boat dock/riverbank site located one block south was recently valued at $12/sq. ft. by Appraisal Associates. Because of the discrepancy in values between the District's two appraisers on similarly situated properties, a fourth appraisal by Appraisal Associates was therefore obtained on this site to provide consistency in the land values between these two similar sites (i.e. e., riverbank/boat docks). Accordingly, recommendations to establish the site's fair market value were therefore based on the appraisal by Appraisal Associates. It is further recommended that the Board policy enacted on February 20, 1992, requiring that the fair market value of District-owned real estate involved in proposed leasing, easement and permit transactions in cases where multiple appraisals of fair market value have been obtained be established at the highest appraised value reported in said set of appraisals be waived solely for this transaction for the reasons stated herein.
The applicant has requested that the environmental insurance provision be waived under any new lease since the leasehold will only encompass the river bank and a dock to moor a limited number of personal boats. The proposed use under the lease will not be for industrial use, hazardous materials will not be used and the applicant proposes to landscape and use the dock as a park-like setting. The Engineer of Site Remediation has reviewed this request for a waiver of environmental insurance coverage and has no objections to a waiver in this instance. It is recommended that the environmental insurance only be waived if the use under any new lease is for the above proposed uses.
It is also recommended that the Executive Director recommend to the Board of Commissioners that it authorize and approve the issuance of the following orders:
1. The real estate consisting of 10,086 square feet located along the east bank of the North Branch of the Chicago adjacent to 4130 North Rockwell Street in Chicago, Illinois, depicted in the exhibit attached hereto be declared surplus and not needed for the District's corporate purposes and available for lease as set forth herein.
2. The fair market value of the 10,086 square feet of real estate be established at $130,000.00 and that the minimum initial annual rental be established at 10% thereof or $13,000.00.
3. The Director of Procurement and Materials Management be authorized to advertise said 10,086 square feet of real estate as available for lease for a term of thirty nine (39) years at the minimum initial annual rental bid of $13,000.00 and report the results of the bidding to the Board of Commissioners for further action.
It is requested that the Executive Director recommend to the Board of Commissioners that it authorize the Director of Procurement and Materials Management to advertise Contract 13-363-11 for public tender of bids a 39-year lease of 10,086 square feet of District real estate located along the east bank of the North Branch of the Chicago River adjacent to 4130 North Rockwell Street in Chicago, Illinois. The minimum initial annual rental bid shall be established at $13,000.00.
Requested, Ronald M. Hill, General Counsel, RMH:SM:rg
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for June 6, 2013
Attachment