TO: Mayor and City Council
FROM: Dustin Anderson, Director of Community Development
SUBJECT:
title
Resolution Authorizing a Modification of a Lease Agreement of Union Station at 50 W. Jefferson Street with JBM Golf Properties, LLC
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BACKGROUND:
Since February 1, 2017, JBM Golf Properties, LLC., a.k.a Mistwood Golf Club (Mistwood), has leased and operated a premier wedding, banquet, and event venue at The Grand Ballroom Union Station at 50 W. Jefferson Street, which includes approximately 7,600 square feet of the second floor of Union Station and shares 2,750 square feet of common area space on the first floor.
The initial term of the lease was six years with two two-year renewal options. The final two-year extension expires on January 31, 2027. Mistwood currently pays 15% of its monthly gross receipts from the sale of food and beverages, or $5,000/month, whichever is greater. Mistwood has been steadily building its business and has been successful at booking events far in advance. In the last six years, this tenant has generated $327,030.80 in rent for the City of Joliet, plus food and beverage taxes, and starting this year, the tenant will also cover property taxes. For these reasons, Mistwood has requested a modification of the current lease payment structure and a long-term lease extension beyond 2027.
Economic Development staff reviewed the previous lease agreement, the rent collected, researched a similar agreement in the area, and negotiated a modified version of the lease terms with Mistwood, which includes:
- A reduction to 14.525% of the sale of food and beverages backdated to May 2025 through January 2027; and
- The $5,000 minimum fee waived for the month of March 2026, when the building is closed for elevator maintenance.
Additionally, Economic Development staff proposes:
- Extension of the current lease by five years with one five-year renewal option.
- The new lease expiration date would be January 31, 2032 instead of January 31, 2027.
Starting on February 1, 2027, the rent structure would increase to 18% of the food and beverage sales or a fixed fee that would increase by $200 annually, starting at $5,200.
If both the City of Joliet and Mistwood agree to move forward with the additional five-year renewal option (February 1, 2032 to January 31, 2037), the monthly percentage of food and beverage sales collected by the City as rent would increase to 20%, and the fixed fee would continue to increase by $200 annually, starting at $6,200.
The proposed modified rent schedule is reflected below.
Projections for the proposed changes of the current lease:
- Year 2025 – $5,000 or 14.525% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $90,777.
- Year 2026 – $5,000 or 14.525% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $87,090.
- March $5,000 minimum fee waived contingent on the closure of the building for the elevator modernization project
Estimated Total Projected Revenue for the City: $177,867
Projections for the proposed initial five-year extension:
- Year 2027 – $5,200 or 18% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $113,043.
- Year 2028 – $5,400 or 18% of food & beverage sales, whichever is greater
- Projected revenue for the City: $115,592.
- Year 2029 – $5,600 or 18% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $118,180.
- Year 2030 – $5,800 or 18% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $120,808.
- Year 2031 – $6,000 or 18% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $123,476.
Estimated Total Projected Revenue for the City: $591,099
Projections for the five-year option to renew:
- Year 2032 – $6,200 or 20% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $138,140.
- Year 2033 – $6,400 or 20% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $141,130.
- Year 2034 – $6,600 or 20% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $144,169.
- Year 2035 – $6,800 or 20% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $147,256.
- Year 2036 – $7,000 or 20% of food & beverage sales, whichever is greater.
- Projected revenue for the City: $150,393.
Estimated Total Projected Revenue for the City: $721,088
This arrangement would provide the City of Joliet with a steady and reliable tenant that brings visitors to downtown Joliet on weekends, and highlights one of our most iconic historic buildings.
On September 3, 2025, the Land Use & Economic Development Committee voted to recommend approval of the proposed lease modifications by the full City Council.
CONCLUSION:
The modification to the proposed lease extension includes:
- Decreasing the current food and beverage sales percentage from 15% to 14.525% through January 31, 2027.
- Waiving the minimum $5,000 fee in March 2026 due to closure of the building.
- Extending the current lease by an additional five years.
- Starting on February 1, 2027, the monthly rent structure would increase to 18% of food and beverage sales or $5,200/month with an annual increase of $200, whichever is greater.
- A mutually agreed-upon five-year renewal option (February 1, 2032 to January 1, 2037).
- Increase to 20% of food and beverage sales or $6,200/month with an annual increase of $200, whichever is greater.
If the proposed modifications are approved, staff projects to collect approximately $591,099 from 2027 to 2032 or $1.3 million in rent from 2025 to 2037. These projections are based on the rent generated in 2024 and assume a 2% sales growth.
RECOMMENDATION:
recommendation
Based on the above it is recommended that the Mayor and City Council approve a resolution authorizing a modification of a lease agreement of Union Station at 50 W. Jefferson Street with JBM Golf Properties, LLC.
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