CTA making some progress on leasing rail properties

The CTA is reporting some progress on leasing long-vacant storefronts and other station properties. But some locations that have been vacant for years are still proving to be hard sells.

At its board meeting earlier this month, the CTA approved eight new concession leases at rail stations on the Brown, Green, Red, Orange, Purple and Blue lines, including a new, locally owned eatery at the Green Line Halsted station.

The Halsted station will house the locally owned Praise Chicago Restaurant, which will hire local youth and teach them skills to pursue careers in the culinary arts. Praise Restaurant founder Darryl Fuery said he and his fellow owners, all local professional chefs, will provide hands-on training in the restaurant business. Praise Chicago will sell fresh food from 6 a.m. through 7 p.m., including omelets, pancakes, sandwiches and other healthy, freshly prepared meal items.

The other new concession leases include new Dunkin’ Donut outlets at Chicago, Davis, and Western on the Red, Purple and Brown Lines. The Blue Line will see several new shops, including a convenience store at Harlem, a newsstand at Washington and a Greyhound ticket booth at Cumberland. The Kedzie Orange Line will have a newsstand.

The CTA reports the total revenue from the new leases is estimated at $1.8 million. In the past three years, the CTA has added 52 new retail concession spaces.

Meanwhile, on the Far North Side, storefronts vacant for almost 20 years in some cases remain dormant, despite rehabs in 2012 as part of the Red Line North station upgrade project. But now there is some interest in at least three of them.

DNAinfo Chicago is reporting that "the CTA is reviewing bids for leases at three of the vacant CTA retail spaces at Morse and Granville stations that were renovated in 2012." No further details were available.

There currently are 18 vacant CTA-owned locations listed for rent, including five spaces at Morse and Loyola stations.
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  • CTA often highlights these total lease amounts in press releases but downplays the lease duration. The "million dollar" PR figures often turn out to be <$3K per month income per station (when rented). Does this amount even cover the costs of rehabilitating these spaces? The dollars used to renovate stations were also paid by taxpayers -- something CTA never mentions -- usually in the form of state and federal grants. How much did it cost to remodel that Morse space? Does the projected lease cover the cost of renovations? CTA has a "federal/state money=free money" mindset. They gladly spend millions in capital grant money to renovate station spaces and then lease that space for a few thousand dollars a month in operating revenue. If CTA were a private retail developer, they would be bankrupt.

  • In reply to josephm:

    I guess the question on this one was whether the main intent of the project was to keep the Red Line from collapsing for a couple of more years or to renovate storefronts. Probably the latter was only a tertiary result of the former.

  • In reply to josephm:

    Where do you get your numbers from? If you have 8 leases for a total of $1.8M, even if the leases are 5 years, they still average out to $3750/month.

    How much do you think they spent on rehabbing the storefronts (while subtracting out the amount required for station rehab)?

  • In reply to chris:

    An earlier CTA Tattler report listed CTA lease terms of 10 years at Jefferson Park and Roosevelt with "annual rent of $2,583 per month and $3,041 per month" respectively. I used that report as a template for guessing at other lease term details.

    I don't have figures for the cost of rehabbing the storefronts. The cost of the Red North Interim Station Improvements was $86M across 7 stations. CTA doesn't break down station costs in detail in easily available public documents. If you roughly estimate 1-2% of Red North Interim work was for retail station improvements that is anywhere from $860K to $1.7M.

  • In reply to josephm:

    I would imagine that the Jefferson Park and Roosevelt leases are in much different/bigger and busier locations that might garner a better tenant and a longer term lease. Most of these locations are smaller and have less traffic. I'm not sure you can use those numbers across all tenant locations.

    So, at $860K to $1.7M, if they lease them out they will pay for themselves given these going rates. The red line retail is at least above ground so will get pedestrian traffic, thus presumably more valuable.

  • As far as I recall, the Western Brown station already has a Dunkin Donuts and the Cumberland Blue station already has a Greyhound agent, so those wouldn't be new but merely renewed leases.

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