TRANSMITTAL LETTER FOR BOARD MEETING OF MARCH 16, 2023
COMMITTEE ON REAL ESTATE
Mr. Brian A. Perkovich, Executive Director
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Authorization to: (1) amend the lease agreement with Skokie Motor Sales, Inc, and (2) consent to a sublease between Skokie Motor Sales, Inc and Meade, Inc. for a 2.5± acre portion of District real estate located at 3615 Oakton Street in Skokie, Illinois, known as North Shore Channel Parcels 5.02 and 5.03. Consideration shall be a document preparation fee of $5,000.00
Body
Dear Sir:
On October 20, 2016, the Board of Commissioners authorized a 10-year lease (“Lease”) to Skokie Motor Sales, Inc (“Skokie Motor”) on 6.6± acres of District real estate located at 3615 Oakton Street in Skokie, Illinois, known as North Shore Channel Parcels 5.01, 5.02, and 5.03. The Lease commenced November 8, 2016, and expires November 7, 2026. Skokie Motor uses the site to park cars in conjunction with its nearby car dealership. Skokie Motor’s current annual rent is $413,704.38. The District’s consent is required before Skokie Motor may sublease any portion of the leasehold to another entity.
Skokie Motor has requested the District's consent to sublease a 2.5± acre portion of the leasehold on Parcels 5.02 and 5.03 to Meade, Inc ("Meade") for the purpose of general office space, storage, light fabrication of electrical products, and parking of company vehicles. The term of the sublease is 12 months. Upon expiration of the initial term, Meade will have the option to renew the sublease for up to 12 months in two separate 6-month renewal options. Because the permitted use under Skokie Motor’s lease is to park vehicles only, an amendment to the Lease is necessary to allow for the additional uses under the sublease such as office space use and light fabrication of electrical products.
The proposed annual sublease rent from Meade is $144,000.00. Under the Lease, the District is entitled to fifty percent (50%) of all value the tenant receives from its sublessee for the use and occupancy of the site as a result of the sublease in excess of the cash rent which lessee, Skokie Motor, is currently paying with respect to the subleased portion of the leasehold. Proportionately, Skokie Motor is currently paying $156,706.20 for the subleased area. Because Meade’s annual sublease fee does not exceed Skokie Motor’s current proportional annual rent, the District’s standard document preparation fee of $5,000.00 will be assessed.
The District’s technical departments have reviewed the request and have no objections thereto.
It is requested that the Executive Director recommend to the Board of Commissioners that it authorize: (1) an amendment to the lease agreement with Skokie Motor Sales, Inc, and (2) consent to a sublease between Skokie Motor Sales, Inc and Meade, Inc. for a 2.5± acre portion of District real estate located at 3615 Oakton Street in Skokie, Illinois, known as North Shore Channel Parcels 5.02 and 5.03. Consideration shall be a document preparation fee of $5,000.00.
It is also requested that the Executive Director recommend to the Board of Commissioners that it authorize and direct the Chairman of the Committee on Finance and the Clerk to execute said Amendment to Lease Agreement and Consent to Sublease approval by the General Counsel as to form and legality.
Requested, Susan T. Morakalis, General Counsel, STM:MTC:NOC:nl
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 March 16, 2023
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