TRANSMITTAL LETTER FOR BOARD MEETING OF APRIL 7, 2016
COMMITTEE ON REAL ESTATE
David St. Pierre, Executive Director
Title
Authority to commence statutory procedures to lease portions of the ground floor and outdoor plaza of the 101-111 East Erie Street building in Chicago, Illinois
Body
Dear Sir:
GIC 101 Erie LLC (“GIC”) owns floors 8 through 20 in the 101-111 East Erie building (“Building”) in Chicago, Illinois, with the District owning all of the floors beneath them, as well as the outdoor plaza (“Plaza”) surrounding the Building. GIC also holds certain easement rights to use portions of the Building owned by the District. This includes exclusive rights to use the 101 East Erie ground floor lobby (“101 Lobby”) and a ground floor storage room on the 111 East Erie side of the Building (“Storage Room”). GIC also has non-exclusive easement rights to use the Plaza.
Presently, GIC is in the process of converting the portion of the Building that it owns into a hotel. GIC has indicated that its site development plans include the establishment of a ground floor restaurant where alcohol will be delivered, sold, and consumed. The Illinois Liquor Control Act generally prohibits the sale or delivery of alcohol on District property. To be in compliance with the Act, the land must be leased for a period of at least 20 years or it must be sold, upon approval by the District’s Board of Commissioners. GIC’s easement therefore does not allow for this proposed use. Accordingly, GIC has requested to lease the 101 Lobby, the Storage Room, and the Plaza to the extent it surrounds the 101 Lobby. The requested duration of the lease is 39 years.
The District’s technical departments have reviewed this request and have no objections. Under the lease, the District will retain all necessary easement rights to the land that it leases, including use of the land for emergency exit purposes.
Before advertising the property for lease, the Board will be provided with the appraised value of the property for the purpose of establishing the minimum acceptable annual rental bid for leasing the areas herein requested.
It is requested that the Executive Director recommend to the Board of Commissioners that it authorize and direct the General Counsel to commence statutory procedures to lease portions of the ground floor and outdoor plaza of the 101-111 East Erie Street building in Chicago, Illinois, upon the terms and conditions set forth herein.
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 April 7, 2016
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