Agreement to Generate $8.9 Million in Revenue for CTA
The Chicago Transit Authority is leasing space in its 120 North Racine facility to the City of Chicago. The 10-year lease, approved by the Chicago Transit Board at its monthly meeting today, will generate $8.9 million over the life of the lease.
The City will lease 73,454 square feet - the first two floors and a portion of the building's basement - to house offices for the departments of Public Health, Buildings and/or Human Services.
?The CTA is constantly looking for new revenue streams," said Chicago Transit Board Chairman Carole Brown. ?Renting an existing CTA property to the City is beneficial for both the City and the CTA."
?Revenue generated by renting a portion of our 120 North Racine facility will contribute to our cost efficiency efforts," said CTA President Frank Kruesi. ?In each of the past seven years CTA staff have worked to identify operational changes to help save more than $760 million, as well as to increase revenues."
Last October, CTA departments that had occupied the first and second floors, including transit operations, construction and engineering, were relocated to 567 West Lake Street to enhance efficiency by consolidating a majority of CTA departments under one roof. By owning the 567 West Lake Street facility, the CTA saves $7.7 million compared to its costs to continue to lease.
The building is governed by terms set forth in its structured finance agreement, which requires any lease of the premises to be with a public agency. CTA solicited interest from local public agencies resulting in the lease agreement with the City. Lease price was determined through negotiations between the City and the CTA.
The lease must be approved by the Chicago City Council. It is expected to take effect this fall.
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