Village staff to seek tenant notice and options after commercial tenant reports inability to pay rent

Village staff told the board that the tenant at 123 East Cottage Grove Road (tenant name provided to staff in writing but not read into the public record) informed the village it could no longer afford the lease after an internal embezzlement that affected the tenant’s finances. Staff said there is a two-month security deposit on file and that the tenant’s notice to the village had not been provided in the formal lease-required form, so staff asked for direction on next steps.

Staff recommended remarketing the property and attempting to mitigate damages in accordance with the lease and mitigation-of-damages obligations. Staff also said a subtenant occupies a portion of the space and that the village has no agreement with that subtenant; the subtenant reportedly pays $1,800 per month to the primary tenant and staff recommended getting an immediate written lease or vacatur terms for that occupant. Trustees instructed staff to obtain a formal written notice from the tenant specifying intent and vacate date, determine the subtenant’s arrangement and payments, and return to the board with options (including immediate remarketing, short-term leasing options and estimated financial exposure).

Why it matters: under the lease the village must mitigate damages and cannot simply sit on the space; finding an interim tenant or a new long-term tenant will affect the village’s potential financial exposure if the tenant elects to vacate before the lease term ends.

Next steps: staff will request the formal notice required by the lease, seek written lease terms or other documentation for the subtenant, provide a timeline for remarketing and present a recommended approach and estimated loss or recovery at the next board meeting.