New Concessions Will Bring Value-Added Services to CTA Customers

May 12, 2004

Board Approves Contracts for New Concession Areas on Blue and Red Lines

Four new businesses are on their way to the Red and Blue Lines, bringing new services to Chicago Transit Authority customers and an additional $444,900 in rent and capital improvements for the CTA over the next five years. The new long-term lease agreements, approved today by the Chicago Transit Board, bring the total number of new concession agreements this year to 32.

The CTA will lease the concession spaces to Project Management Advisors, Inc. of Chicago; Kedzie 'L' Newsstand of Skokie; and AM Howard "L," Inc. of Lincolnwood. In return, the companies will provide rent and infrastructure upgrades to improve the appearance of the spaces involved. The approved contractors will construct and operate high quality businesses in areas that were previously either vacant or being leased on a month-to-month basis. In return for the added security of long-term leases, vendors will make capital improvements to the property. The leases were competitively bid.

"These lease agreements are structured to increase revenues for the CTA and provide the vendors with a greater sense of ownership of their space," said Chicago Transit Board Chairman Carole Brown. "With the addition of higher quality vendors, our customers and the communities we serve will benefit as well."

"Quality concession areas help to anchor CTA stations in the surrounding neighborhoods," said CTA President Frank Kruesi. "By providing convenient amenities, these new agreements will help make the transit experience more enjoyable for our customers."

CTA concession stands offer customers a variety of products and services that include, but are not limited to, newspapers and magazines, film processing, express mail service, shoe repair, gifts, sundries and notions, and photocopy and fax services.

As part of its agreement with the CTA, Project Management Advisors, Inc. will lease, operate and make capital upgrades on a 350-square foot concession space located inside the Red Line Chicago/State station, and on an 80-square foot space at the Blue Line-O'Hare/Damen 'L' stop. The vendor has proposed operating gourmet coffee and specialty beverage concession stands inside the stations. Both concession spaces were previously vacant.

Kedzie 'L' Newsstand and AM Howard "L," Inc. will operate convenience stores at the Blue Line Logan Square and Red Line Howard stations, respectively. Kedzie 'L' Newsstand will lease a 250-square foot space for five years, and AM Howard "L," Inc. will lease a 146-square foot space for a period of two years, or until station renovations begin at the Howard station.

The CTA's Concession Redevelopment Program implements uniform lease terms that include longer lease periods, as well as, provisions for controlled merchandising and guidelines for improved presentation and appearance. Under this program, 59 CTA concession spaces throughout the CTA rail system have received or are on schedule to receive capital upgrades totaling $5.3 million.

Capital improvements at the concession spaces typically consist of electrical, plumbing, heating and air conditioning improvements, as well as, new windows, counter tops, shelving, flooring and ceilings.

The CTA's competitive bid process evaluates bids for the concession spaces based on the vendor's proposed rent and capital improvement expenditure, financial background, experience with concession stands and design of the concession space.

Total contract value is a combination of the bid rent and the amount of capital improvement to the concession proposed by the bidder.

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