TRANSMITTAL LETTER FOR BOARD MEETING OF MARCH 6, 2008
COMMITTEE ON REAL ESTATE
Mr. Richard Lanyon, General Superintendent
Title
Authorize and approve the issuance of a six- (6) month permit extension to SPI Petroleum, LLC to occupy approximately 3.78 acres of District land located north of the Main Channel and east of Harlem Avenue at 4801 South Harlem Avenue in Forest View, Illinois; Main Channel Atlas Parcel 37.11. Consideration shall be $66,000.00
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Dear Sir:
SPI Petroleum, LLC (SPI) currently occupies the 3.78 acres of District land located at 4801 South Harlem Avenue, north of the Main Channel and east of Harlem Avenue, in Forest View, Illinois (c/k/a Main Channel Atlas Parcel Number 37.11). SPI took possession of the premises after the expiration of a lease issued to Energy Transport, Inc. and has occupied the premises under a permit issued by the Board of Commissioners to allow completion of a statutory lease procedure for a new long-term lease. The annual permit fee is $68,000.00.
At its meeting of August 2007, the Board established the fair market value for the property at $1,100,000.00 and established the minimal annual rental rate of $110,000.00. The bid opening was held on November 6, 2007. However, Energy Transport, the highest bidder and a subsidiary of SPI, has thus far not submitted proper corporate and financial documents to the District that are necessary before staff can recommend the award of the lease to Energy Transport. Consequently, additional time is required to resolve certain pre-leasing issues and to review company financial background information; therefore, a six- (6) month permit extension is recommended to allow SPI to continue to occupy the site until the award of the lease.
It is recommended that the permit fee for continued occupancy of the site be established at $66,000.00, which is equal to the highest bid for the new lease, which was $120,000.00 plus 10% prorated for six months. It is recommended that the 10% surcharge be imposed because there is a corporate relationship between the highest bidder and the current permittee, and neither should be permitted to benefit from the fact that there is a delay in the award of a new lease.
It is requested that the General Superintendent recommend to the Board of Commissioners that it authorize and approve the issuance of a six- (6) month permit to SPI on approximately 3.78 acres of District land located north of the Main Channel and east of Harlem Avenue at 4801 South Harlem Avenue in Forest View, Illinois, Main Channel Atlas Parcel 37.11, for consideration of $66,000.00.
It is further requested that the General Superintendent recommend to the Board of Commissioners that it direct the Chairman of the Committee on Finance and the Clerk to execute the permit extension agreement after it is approved by the Attorney as to form and legality.
Requested, Frederick M. Feldman, Attorney, FMF:CL:JCC:nm
Recommended, Richard Lanyon, General Superintendent
Respectfully Submitted, Terrence J. O’Brien, Chairman Committee on Real Estate Development
ORDERED passed by affirmative roll call vote of a majority of the Commissioners present this March 6, 2008. Approved, President Terrence J. O’Brien
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