TRANSMITTAL LETTER FOR BOARD MEETING OF JULY 11, 2024
COMMITTEE ON REAL ESTATE
Mr. Brian A. Perkovich, Executive Director
Title
Authority to enter into a 39-year lease agreement with Amtrak on 19,584± sq. ft. of District real estate located at 413 West Taylor Street in Chicago, Illinois, known as Main Channel Parcel 45.01 (portion) for storage of railway and track materials. Consideration shall be an initial annual rental fee of $68,500.00
Body
Dear Sir:
Amtrak has requested to lease 19,584± sq. ft. of District real estate located at 413 West Taylor Street in Chicago, Illinois, known as Main Channel Parcel 45.01 (portion) (“MCP 45.01”) for storage of railway and track materials such as spikes, anchors, and other related items. The requested lease term is 39 years.
MCP 45.01, in its entirety, comprises 26,102± sq. ft. The District and the City of Chicago (operating under a permit from the District) use the northern portion of the parcel for offloading debris collected by skimmer boats in the waterway. This northern portion of MCP 45.01 is not included in the lease request to ensure there will be no interference with the debris removal operations.
Due to MCP 45.01’s narrow and limited size, Amtrak is requesting a variance from the 60’ setback requirement under the District’s Waterway Strategy. MCP 45.01 is located along the west bank of the South Branch of the Chicago River and ranges from approximately 40’ to 75’ in width. A variance from this setback requirement is recommended to allow use of the parcel consistent with the lease. No permanent structures will be permitted within the setback area.
The District’s technical departments have reviewed this lease request and have indicated that the subject site is not currently needed for corporate use and that they have no technical objections thereto. The Alderman of the 28th Ward has no objections to the proposed lease of the property.
Pursuant to statute, Amtrak submitted two appraisals and the Law Department obtained a third appraisal, as follows:
Appraiser Value
Appraisal Associates
William J. Enright, MAI $685,000.00
(District’s Appraiser)
Integra Reality Resources
Ron DeVries, MAI $350,000.00
Gregory J. Hatfield & Associates, LLC
Gregory J. Hatfield, MAI $330,000.00
It is District policy to assess the annual rent based on 10% of the site’s highest appraised when leasing District real estate to a governmental entity for public non-recreational purposes. It is therefore recommended that the subject real estate’s fair market value be based upon the highest of the three appraisals and established at $685,000.00, and that the initial annual rent be established at 10% of the property’s fair market value or $68,500.00.
Under 70 ILCS 2605/8c(11), said lease will be terminated upon one year notice if it is determined that the premises become essential to the District’s corporate purposes.
It is requested that the Executive Director recommend to the Board of Commissioners that it authorize a 39-year lease agreement with Amtrak on 19,584± sq. ft. of District real estate located at 413 West Taylor Street in Chicago, Illinois, known as Main Channel Parcel 45.01 (portion) for storage of railway and track materials. Consideration shall be an initial annual rental fee of $68,500.00.
It is further 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 lease agreement after same is approved by the General Counsel as to form and legality.
Requested, Susan T. Morakalis, General Counsel, STM:BJD:NOC:vp
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 July 11, 2024
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