TRANSMITTAL LETTER FOR BOARD MEETING OF OCTOBER 2, 2025
COMMITTEE ON REAL ESTATE
Mr. John P. Murray, Acting Executive Director
Title
Consent to assignment of lease agreement dated October 24, 1940, between the District and Ergon Asphalt Partners, LP, on 6.25 acres of District real estate located south of the Chicago Sanitary and Ship Canal and east of Cicero Avenue in Cook County, Illinois, known as Main Channel Parcel 39.08 to Heritage Asphalt, LLC. Consideration shall be a document preparation fee of $5,000.00
Body
Dear Sir:
Ergon Asphalt Partners, LP (“Ergon”) leases approximately 6.25 acres of District real located south of the Chicago Sanitary and Ship Canal and east of Cicero Avenue in Cook County, Illinois for the operation and maintenance of an asphalt terminal. The lease commenced November 1, 1940, and expires October 31, 2039. Ergon’s annual rent is $2,156.00. Ergon is permitted to assign the lease subject to the District’s consent.
Ergon will be selling a portion of its business and seeks to assign the lease to Heritage Asphalt, LLC (“Heritage”) for the same purposes as authorized under the lease. In accordance with the terms of the lease, Ergon requests the District’s consent to assign the lease to Heritage.
Pursuant to statute, the leasehold was reappraised to redetermine the annual rental rate. Heritage submitted two appraisals and the Law Department obtained a third review appraisal as follows:
Appraiser Value
CohnReznick $4,080,000.00
Sonia Singh, MAI
(District’s Review Appraisal)
The Gorman Group, Ltd. $2,000,000.00
Robert C. Gorman, MAI
Renzi & Associates, Inc. $1,470,000.00
Neil J. Renzi, MAI
The subject real estate’s fair market value was based upon the highest of the three appraisals and established at $4,080,000.00. The new annual rental rate will be established at 10% of the property’s fair market value, which is $408,000.00.
The District’s Finance Department and Law Department have reviewed Heritage’s company background and financial history and determined that Heritage demonstrates the ability to meet its financial obligations under the lease.
It is requested that the Acting Executive Director recommend to the Board of Commissioners that it consent to the assignment of lease agreement dated October 24, 1940, between the District and Ergon Asphalt Partners, LP, on 6.25 acres of District real estate located south of the Chicago Sanitary and Ship Canal and east of Cicero Avenue in Cook County, Illinois, known as Main Channel Parcel 39.08 to Heritage Asphalt, LLC. Consideration shall be a document preparation fee of $5,000.00.
It is also requested that the Acting 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 Consent to Assignment of Lease Agreement after it is approved by the General Counsel as to form and legality.
Requested, Susan T. Morakalis, General Counsel, STM:BJD:KHY:vp
Recommended, John P. Murray, Acting Executive Director
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for October 2, 2025
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