The Chicago Transit Board today approved a five-year $4.2 million contract to outsource certain real estate management responsibilities of CTA properties. Jones Lang LaSalle will focus specifically on three tasks: serving as CTA's real estate broker, securing concessions at CTA stations, and increasing efforts to establish transit-oriented development across the CTA system. The outsourcing of real estate management responsibilities will help to improve operational efficiencies and enhance revenue opportunities for the agency.
"Improving service for our customers goes beyond buying new buses and rail cars. It is also about providing value-added services that make transit a true convenience in every aspect and strengthen CTA's relationships with the communities it serves," said CTA President Ron Huberman. "Rail stations should be more than a place where riders board and exit trains. We want to provide convenient services for riders to access, some place where they can drop off dry cleaning on the way to work and grab a latte as they head in to the office. Transit-oriented development will position CTA as an anchor within communities and help attract further capital improvements through commercial and residential development."
"Aggressively pursuing opportunities to generate additional revenue while enhancing services for riders is the real vision of what this contract is expected to bring to CTA," said Chicago Transit Board Chairman Carole Brown. "We look forward to working with Jones Lang LaSalle to achieve our vision."
Jones Lang LaSalle Americas (Illinois) LP (JLL) – a financial and professional services company specializing in real estate – was awarded the contract for select Management Oversight; Concession Property Management; and Transit-Oriented Development.
The task of managing concession and development opportunities for the second largest transit agency in the country requires a dedicated effort beyond what CTA's internal resources can currently provide. Rather than increase staffing levels, outsourcing these responsibilities to an experienced vendor will allow the agency to maximize potential real estate opportunities.
Jones Lang LaSalle will be responsible for creating an effective transit-oriented development strategy such as grocery stores adjacent to stations, mixed-use development, and hotel and retail outlets. The vendor will also act as broker to buy and sell real estate on behalf of the CTA, review and analyze regulations, develop strategies for underutilized properties, provide general guidance and assistance for the real estate program, and negotiate and manage concession agreements.
Through a key subcontractor, JLL has worked for the past 11 years with the Massachusetts Bay Area Transportation Authority in developing and increasing real estate revenue.
In 2007 CTA generated more than $6.04 million in revenue from CTA-owned property such as retail concessions at rail stations and storefronts located near rail stations, Park & Ride facilities, Under 'L' parking and office space.
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