TRANSMITTAL LETTER FOR BOARD MEETING OF DECEMBER 19, 2019
COMMITTEE ON REAL ESTATE
Mr. Brian A. Perkovich, Executive Director
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Consent to sub-sublease between Matt Rogatz and Chicago CRED, Inc. on an approximately 4,500 sq. ft. portion of the leasehold at 3350 S. Kedzie Avenue in Chicago, Illinois; Main Channel Parcel 41.03. Consideration shall be an initial annual fee of $24,311.42
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Dear Sir:
Midway Broadcasting Company (“Midway”) and Migala Communications Corporation (“Migala”) lease 6.2 acres of District real estate located at 3350 S. Kedzie Avenue in Chicago, Illinois and known as Main Channel Parcel 41.03 under a lease that commenced July 15, 1951, and expires July 14, 2050 (“Lease”) The tenants operate two radio stations. The leasehold is improved with an office building, a parking lot and a radio transmission tower. The current annual rent is $22,214.40. The District’s consent is required for subleasing or assignments.
On December 28, 2005, the District consented to a sublease from Midway to Matt Matt Rogatz (“Rogatz”). Under the sublease agreement, Rogatz uses a portion of the office building to operate an industrial real estate business. The Rogatz sublease comprises approximately 21,700 sq. ft.which includes the parking lot adjacent to the office building. Rogatz pays 8% of the total rent due under the Lease which is $1,777.16.
Rogatz has requested to sub-sublease a 4,500 sq. ft. portion of the office building to Chicago CRED, Inc. (“CRED”) along with the parking lot for five (5) years. CRED proposes to use the building for job training. CRED prepares young adult men for entry level jobs in the private sector. Such use is in conformity with the permitted uses under the Lease. Rogatz has obtained the written consent of both Midway and Migala. The District’s technical departments have reviewed this request and have no objections thereto.
The proposed rent under the sub-sublease is $50,400.00 for the first year with 3% increases each year thereafter. Pursuant to District policy on subleases, the District is entitled to 50% of the increment or value received by the tenant from any sublease in excess of what the tenant is paying with respect to its rent for the sublease area. In the first year of the sub-sublease, CRED will pay Rogatz $50,400.00. Therefore, Rogatz will owe the District additional rent of $24,311.42 or 50% of the difference between $50,400.00 and $1,777.16 ($48,622.84).
It is recommended that the Executive Director recommend to the Board of Commissioners that it consent to the sub-sublease between Matt Rogatz and Chicago CRED, Inc. on an approximately 4,500 sq. ft. portion of the leasehold at 3350 S. Kedzie Avenue in Chicago, Illinois; Main Channel Parcel 41.03. Consideration shall be an initial annual fee of $24,311.42.
It is also requested that the Executive Director recommend to the Board of Commissioners that the Chairman of the Committee on Finance and the Clerk be authorized and directed to execute the Consent to Sub-Sublease Agreement on behalf of the District after it is approved by the General Counsel as to form and legality.
Requested, Susan T. Morakalis, General Counsel, STM:EMA:npe
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 December 19, 2019
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