BACKGROUND

In late 2020, the Village Board approved a lease agreement with Shree Neelkanth Inc. to independently operate a Gateway Newstands location within the Downtown Metra Station.  This five-year leased commenced on January 1, 2021 and runs through December 31, 2025.  Since that time, the business owner has stated that he has struggled to generate revenue as the Metra UP-Northwest line has only recovered two-thirds of its pre-pandemic ridership.  To assist this business, the Village Board previously approved a lease amendment in October 2023 to allow the owner to lease a vending machine within the station.

Dilip Patel, owner of Shree Neelkanth Inc., has also requested a rent reduction in order to continue the viability of operating Gateway Newstands within the Downtown Metra Station.  The request would immediately reduce the base rent from $450 per month to $350 per month through the remainder of the lease term which expires December 31, 2025.

This reduction will help the business while having limited negative impact on Village revenue.  Should the tenant exercise their option following expiration of the initial lease term, per the existing lease agreement the rent would increase to $472.50 per month on January 1, 2026.  The business owner would be required to continue adhering to the lease terms of opening the Metra station at 5:00am, Monday through Friday, and operating the store until 2:30pm.

Gateway Newstands is a positive amenity benefitting the commuters that access Metra trains via Downtown Arlington Heights.


RECOMMENDATION

It is recommended that the Village Board of Trustees approve an ordinance, and authorize the Village Manager to execute an amendment of the existing lease with Shree Neelkanth Inc. in order to reduce monthly base rent from $450.00 to $350.00 for the remaining lease term that expires December 31, 2025.  This approval is subject to compliance with all Village codes and regulations.