TRANSMITTAL LETTER FOR BOARD MEETING OF JANUARY 19, 2012
COMMITTEE ON REAL ESTATE
Mr. David St. Pierre, Executive Director
Title
Authority to issue a 90-day permit to NuStar Energy to continue to use 0.50 acres of District real estate located near 131st Street and Kedzie Avenue in Blue Island and known as Cal-Sag Channel Parcel 13.02 to operate a barge dock and ancillary pipelines. Consideration shall be a lump sum payment of $77,000.00 and a permit fee of $7,000.00. (Deferred from the December 15, 2011 and January 5, 2012, Board Meetings) (As Amended)
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Dear Sir:
Martin Oil Service, Inc. ("Martin Oil") previously leased approximately 0.50 acres of District land located near 131st Street and Kedzie Avenue in Blue Island, Illinois, and c/k/a as Cal -Sag Parcel 13.02 to operate a barge dock and ancillary pipelines in connection with its adjacent oil terminal on non-District owned land. The Martin OiI lease, as amended, commenced in 1950 and expired in 2000. The annual rent for the subject property was $7,000.00. The operations on Parcel 13.02 were unmanned.
Upon expiration of its lease Martin Oil had no further need for the land it formerly leased. However, since the lease expiration a successor entity of Martin Oil has continued to use the site for the afore-stated purposes. At some point, NuStar became the owner of the dock and pipelines located on the subject land.
NuStar has requested to continue to use the barge dock and the ancillary pipelines for transporting petroleum to its adjacent property. This permit is being recommended to allow NuStar continued use of the premises during the statutory leasing procedures and to conduct environmental assessments and any required remediation. The permit will also be conditioned upon NuStar paying a lump sum payment of $77,000.00 to cover the period since the lease expired through 2011. The lump sum payment was calculated based upon the annual rent in effect at the time the Martin Oil lease expired.
The permit fee of $7,000.00 is recommended to achieve a rental equal to the previous rent since available comparable values indicate that assessing the customary 10% multiplier of the fair market value would yield $3,100.00 annually.
It is requested that the Executive Director recommend to the Board of Commissioners that it issue orders authorizing the issuance of a 90-day permit to NuStar Energy to continue to use 0.50 acres of District real estate located near 131st Street and Kedzie Avenue in Blue Island and known as Cal-Sag Channel Parcel 13.02 to operate a barge dock and ancillary pipelines. Consideration shall be a lump sum payment of $77,000.00 and a permit fee of $7,000.00.
It is also requested that the Executive Director recommend that the Board of Commissioners authorize and direct the Chairman of the Committee on Finance and the Clerk to execute the permit agreement after it is approved by the General Counsel as to form and legality.
Requested, Ronald M. Hill, General Counsel, RMH:STM:rg
Recommended, David St. Pierre, Executive Director
Respectfully Submitted, Terrence J. O'Brien, 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 January 19, 2012
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