TRANSMITTAL LETTER FOR BOARD MEETING OF JUNE 5, 2008
COMMITTEE ON REAL ESTATE
Mr. Richard Lanyon, General Superintendent
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Authority to consent to District lessee, PDV Midwest Refining, LLC, sublease to Chicago Carbon Company a portion of its leasehold located near New Avenue and 135th Street in Lemont, Will County, Illinois, Main Channel Atlas Index Parcel 19.08 subject to terms and conditions stated herein. Consideration shall be a lump sum payment of $35,000.00 and an initial annual fee of $7,375.00
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Dear Sir:
PDV Midwest Refining, LLC (PDV) is a lessee of the District pursuant to a 39-year lease dated December 15, 2005. The lease commenced January 1, 2006, and expires December 31, 2044. The leasehold comprises 3.63 acres and is located near New Avenue and 135th Street in Lemont, Will County, Illinois, and known as Main Channel Atlas Parcel 19.08. The property is used for barge loading and unloading of petroleum coke products and in conjunction with PDV’s adjacent refinery site. The current annual rental under the lease is $73,750.00.
PDV has requested the District’s consent to a sublease with Chicago Carbon Company (CCC) on a non-exclusive 20% portion of its leasehold premises. CCC operates barge loading and unloading of the petroleum coke products on the site. District policy requires that the District be paid 50% of the sublease rental that exceeds the base rent for the subleased portion of the lease. Because the tenant continues to use the entire leasehold, the District would be entitled to 50% of the entire sublease rental. However, because PDV’s request for the District’s consent was received almost two years after the commencement date of the sublease, the District’s policy of recovering 100% of any unauthorized sublease fees collected by a non-compliant tenant shall be applied for the period prior to the District’s consent. The sublease fee for the period thereafter shall be 50% of the sublease fee paid to PDV by CCC.
The fee of $35,000.00 is therefore due and owing to the District by PDV which represents 100% of all sublease fees received by or owing to PDV from CCC from January 1, 2006, to May 15, 2008. After May 15, 2008, the initial annual sublease fee shall be $7,375.00.
It is requested that the General Superintendent recommend to the Board of Commissioners that it approve and authorize the subject consent to sublease by PDV Midwest Refining, LLC to Chicago Carbon Company as described above. Consideration shall be a lump sum payment of $35,000.00 and an initial annual fee of $7,375.00.
It is further requested that the General Superintendent recommend to the Board of Commissioners that it authorize and direct the Chairman of its Committee on Finance and its Clerk to execute a form of consent agreement after it is approved the Attorney as to form and legality.
Requested, Frederick M. Feldman, Attorney, FMF:CL:STM: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 June 5, 2008. Approved, President Terrence J. O’Brien
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