TRANSMITTAL LETTER FOR BOARD MEETING OF AUGUST 10, 2023
COMMITTEE ON REAL ESTATE
Mr. Brian A. Perkovich, Executive Director
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Authorization to: (1) declare as surplus and not required for corporate purposes, and to sell to the City of Chicago, 10.7± acres of District real estate located west of the North Shore Channel between Foster Avenue and Bryn Mawr Avenue in Chicago, Illinois, known as North Shore Channel Parcels 9.09, 9.14, 9.16, and 9.17, and (2) enter into a two-month lease agreement with the City of Chicago for the subject real estate until the sale is consummated. Consideration shall be $1,500,000.00
Body
Dear Sir:
The City of Chicago (“City”) has requested to purchase 10.7± acres of District real estate located west of the North Shore Channel between Foster Avenue and Bryn Mawr Avenue in Chicago, Illinois, known as North Shore Channel (“NSC”) Parcels 9.09, 9.14, 9.16, and 9.17 (“Subject Property”). The City is interested in the Subject Property for several potential governmental uses, including housing, forestry, and related public purposes.
NSC Parcels 9.09 and 9.14 are currently leased to the U.S. Marine Corps under a lease that commenced July 1, 2014, and expires June 30, 2053. Authority to terminate this lease is being requested simultaneously in a separate transmittal letter. NSC Parcel 9.16 is under an easement to the City to maintain the channel bank and NSC Parcel 9.17 is currently vacant.
The District’s technical departments have reviewed this request and have no objections thereto because the Subject Property is not required for corporate use. As a condition of the sale, the District will reserve any easements that may be necessary to operate and maintain District infrastructure in the area.
The proposed sale is consistent with past District property sales in the vicinity to public entities for fair market value, including the Chicago Transit Authority and the Chicago Board of Education. The District’s appraiser, William Enright, MAI, determined the fair market value of the Subject Property to be $1,500,000.00, based upon the City’s proposed use.
The estimated timeframe to complete the sale to the City is two to four months. However, the City has requested to lease the subject property in the interim to provide emergency housing to asylum-seeking families and individuals arriving in Chicago. As a result, the requested lease term will be for two months, with an option to extend for an additional two months if the parties need additional time finalize the sale. The City will pay a monthly rental fee of $12,500.00, representing 10% of the fair market value, which will be credited to the City at closing toward the purchase price.
It is requested that the Executive Director recommend to the Board of Commissioners that it pass the following orders:
1. That the subject 10.7± acres of District real estate located west of the North Shore Channel between Foster Avenue and Bryn Mawr Avenue in Chicago, Illinois, known as North Shore Channel Parcels 9.09, 9.14, 9.16, and 9.17, be declared surplus and not needed for corporate purposes, and to be sold to the City of Chicago for public governmental purposes;
2. That the fair market value of said property be established at $1,500,000.00;
3. That it authorize the District to enter into a Purchase and Sale of Real Estate Agreement with the City of Chicago to effectuate the sale of the above-mentioned District real estate, embodying the customary terms and conditions set forth above;
4. That it authorize the District to enter into a Lease Agreement with the City of Chicago to lease the subject real estate for two months, with an option to extend for an additional two months if the parties need additional time to finalize the sale, subject to a monthly rental fee of $12,500.00, to be credited toward the purchase price at closing;
5. That the Chairman of the Committee on Finance and the Clerk be authorized and directed to execute said Purchase and Sale of Real Estate Agreement, the deed, the Lease Agreement, and any other documents necessary in effecting the aforesaid sale and lease after same have been approved by the General Counsel as to form and legality; and
6. That the General Counsel be authorized and directed to execute and deliver all other documents necessary to effectuate these transactions.
Requested, Susan T. Morakalis, General Counsel, STM:BJD: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 August 10, 2023
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