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HomeMy WebLinkAbout94-2 Resolution No. 94-2 RESOLUTION . AUTHORIZING EXECUTION OF AN AGREEMENT WITH • ELGIN RIVERBOAT RESORT REGARDING ETTERS OF CREDIT BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that George VanDeVoorde, Ma or, is authorized to execute on behalf of the City of Elgin, a letter agreement acknowledging receipt of letters of cr-dit and their use by City, a copy of which is attached hereto s/ Geo •e VanDeVoorde George VanDeVoorde, Mayor Presented: January 12, 1994 Adopted: January 12, 1994 Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk Elgin Riverboat Resort December 15 , 1993 CITY OF ELGIN 150 Dexter Court Elgin, IL 60120-5555 ATTENTION: Erwin W. Jentsch, Esq Corporation Counsel RE: Elgin Riverboat Resort Gentlemen: In connection with that certain Development Agreem- t dated June 24, 1992, between the City of Elgin ("City") and the predecessor in intere.t to Elgin Riverboat Resort, an Illinois partnership ("ERR"), ERR is obligated to deli er to City a bond in the amount of $2,000,000 in the form provided in the Develop ent Agreement as security for certain obligations of ERR arising under the Develo o ment Agreement. ERR is delivering herewith two (2) irrevocable lett-rs of credit, in the amount of $1,000,000 each, in satisfaction of ERR's requirem:nts under Section VI.B. of the Development Agreement. By its acceptance of this letter and the letters of credit, City hereby agrees and acknowledges that its receipt •f the letters of credit delivered herewith satisfies the obligations of ERR arisin_ under Section VI.B. of the Development Agreement. City also agrees that, in the event either or both o the letters of credit delivered herewith are not renewed while the obligations se red by the letters of credit in accordance with the Development Agreement remai outstanding, City may make a draw on the letter(s) of credit not so renewed. The -upon, City shall hold the funds received in lieu of the letters of credit as security fo the obligations of ERR arising under the Development Agreement as if City held t e security referred to in Section VI.B. of the Development Agreement. City coven. is and agrees that, whether it holds letter(s) of credit or cash pursuant to Secton VI.B. of the Development Agreement, it shall deliver to ERR whatever securi City holds upon fulfillment of the provisions of Section VI.B.3. of the Developme t Agreement (together with any interest earned on cash held as security). CITY OF ELGIN Page 2 December , 1993 Kindly indicate City's acceptance of the provisions oft is letter agreement by causing this letter to be executed on behalf lof the City where indicated below and returning two (2) executed copies to Michael C. Shindler, Hyatt 0 evelopment Corporation, Vice President and General Counsel, 200 West Madison S greet, Chicago, IL 60606. Thank you. Very truly yours, ELGIN RIVERBOAT RESORT By: RBG, L.P., one of its partners By: HCCA Co ' f •:ti •, its general partner /.� / p By: , Richar i I Schulze Vice '''resident Agreed and Accepted and Receipt Acknowledged: CITY OF IN By: ,d(AA ,V;-• Name: 6E 6I G E 1/13 A,' OE Veo DE Title: / "? f y0 rL TELEPHONE 708/931-6100 El 111 FAX 708/931-5610 FOR HEARING IMPAIRED y or ei�� TDD 708/931-5616 i - CITY OF ELGIN 150 DEXTER COURT ELGIN, ILLINOIS 60120-5555 Alt 4,1)1 F E0 January 14, 1994 Hyatt Development Corporation 200 West Madison Avenue Chicago, IL 60606 Attn: Michael C. Shindler, Esq. RE: Elgin Riverboat Resort Dear Michael : Enclosed please find two executed copies of the letter agreement concerning the Letters of Credit. Very truly yours, Erwin W. Jentsch Corporation Counsel EWJ/nr ,cc: City Clerk (i) Printed on recycled paper January 1 , 1994 MEMORANDUM TO: James Nowicki, Finance Direct.r FROM: Erwin W. Jentsch, Corporation Counsel SUBJECT: Elgin Riverboat Resort Letter of Credit Attached for safekeeping are the Letters of Credit delivered by the Elgin Riverboat Resort. EWJ nr Attachment mac: City Clerk • Interstate Irrevocable Letter of Credit Ba k Flat Ineentalm Bank d Nrdsds.NA International Banking OFFICE December 06, 19 93 do First Interstate Bank Of AriTAria AU.DRAFTS DRAWN MUST BEAR THIS NUMBER Phoenix,AZ NO. SB1991 City of Elgin,Illinois Page 1 of 2. 150 Dexter Court Elgin,IL 60120 Gentlemen: We hereby establish our Irrevocable Standby Letter of Credit ' your favorfor the account of Nevada Landing Partnership, an Illinois general partnership, as a partner in Ell Riverboat Resorts, 107 South Grove Avenue, Elgin, Illinois 60120, for a sum not to exceed the aggregate of SD1,000,000.00 (One Million and 00/100 U.S. Dollars),available by your draft at sight on us,accompanied by ' - following as per"Exhibit A." Each draft so drawn must be marked "Drawn under First Inde • • Bank of Nevada, N.A. Letter of Credit No. SB 1991 and be presented with this original Letter of Credit and Exhibit A?thereof. It is a condition of this Letter of Credit that it is deemed to be , tomatically extended without amendment for one year from the expiration date hereof or any future expiration date, unless at least thirty (30) days prior to any expiration date, we notify you by courier to the above address • • we elect not to consider this Letter of Credit renewed for any such additional period. We hereby agree that your draft(s) so drawn under and in co fiance with the terms of this credit will be duly honored if drawn and presented for payment at ourcounters at our International Banking Department, do First Interstate Bank of Arizona, Department.806 100 W. Washin .n, Phoenix, Az. 85003 on or before December 6, 1994. Except so far as expressly stated, this credit is subject to the Uniform Customs and Practice for Documentary Credits 1983 revision, International Chamber of Commerce Pub 'cation No. 400. Very truly yours, First Interstate Bank of Nevada, N.A. In S44,614.1- : ; By: Au .rized Si I,.• re Authorized Signature MIS-1073(7-92) Page 2/2 This page forms an integral part of Letter of redit No. SB 1991 Exhibit A 1. Elgin Riverboat Resort, an Illinois venture, has aban••. • the construction and development of its riverboat gaming casino proposed to have been built in the City of Elgin and has not diligently and continuously prosecuted same to completion for a peri• of thirty (30) days prior to the date of the certificate,and EITHER OF THE FOLLOWING: A. Elgin Riverboat Resort has not notified the City of an ent such as an act of God, casualty, or other occurrence beyond the control of Elgin Riverboat Reso ' which has prevented Elgin Riverboat Resort from completing the construction and development of its 'verboat gaming casino, or B. Notwithstanding that Elgin Riverboat Resort has notifi- the City of an event such as an act of God, casualty, or other occurtence beyond the control of El . Riverboat Resort which has prevented Elgin Riverboat Resort from completing the construction and - elopment of its riverboat gaming casino, a period of six(6) months has elapsed from the date of su h notice, and Elgin Riverboat Resort has not commenced the construction and development of its riv ••- gaming casino since that date. or C. Elgin Riverboat Resort, an Illinois venture, has compl: .. the development of its riverboat gaming casino in the City of Elgin but has discontinued operati• of the casino with the result that the City of Elgin has received less than $2 million in the aggrega in revenues from gaming taxes, admission taxes, and rent payable to the City of Elgin in accor•. 'ce with the Ground Lease Agreement to be executed pursuant to the Development Agreement dated June 24, 1992 between the City of Elgin and Elgin Riverboat Resort. Provided,however,in the event of a draft accompanied b► the certification in(C),the amount drawn on this letter of credit shall be equal to fifty percent(50%) •f the amount by which$2 million exceeds the actual amounts received by the City in the aggregate. and 2. The City of Elgin has drawn from the letter of credit deli ered to the City by RBG,L.P. an amount equal to the amount drawn on this letter of credit. • MIS-1073(7-92) • Continental Bank"A CABLE ADDRESS:Conil Bank Telex 02-5233• SWIFT ADDRESS:CNTLUS44•TELEFAX NUMBER:987-6828 PAGE: 1 DATE: NOVEMBER 29, 1993 IRREVOCABLE DOCUMENTARY CREDIT NUMBER: C7235132 BENEFICIARY APPLIC T CITY OF ELGIN RBG, L.P. 150 DEXTER COURT 200 WEST • 'ISON STREET ELGIN, ILLINOIS 60120 CHICAGO, IL 60606 AMOUNT USD 1,000,010.00 ONE MILLION AND 00/100 'S US DOLLARS EXPIRY NOVEMBER 24, 1994 AT OUR COUNTERS WE HEREBY ESTABLISH IN YOUR FAVOR OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER C7235132 WHICH IS AVAILABLE WITH U' BY SIGHT PAYMENT(S) AGAINST PRESENTATION OF THE ORIGINAL OF THIS LETTER OF CREDIT AND YOUR DRAFT(S) "AT SIGHT" DRAWN ON US, BEARING THD CLAUSE "DRAWN UNDER CONTINENTAL BANK, N.A. , CHICAGO, ILLINOIS LETTER OF CREDIT NUMBER C7235132" AND ACCOMPANIED BY: A WRITTEN CERTIFICATE MADE BY A DULY AUTHORIZED •FFICIAL OF THE CITY OF ELGIN CERTIFYING TO THE ISSUER THAT: A(1) ELGIN RIVERBOAT RESORT, AN ILLINOIS VENTURE HAS ABANDONED THE CONSTRUCTION AND DEVELOPMENT OF ITS RIVERBOAT G. ING CASINO PROPOSED TO HAVE BEEN BUILT IN THE CITY OF ELGIN AND HAS OT DILIGENTLY AND CONTINUOUSLY PROSECUTED SAME TO COMPLETION FOR A PERIOD OF THIRTY (30) DAYS PRIOR TO THE DATE OF THE CERTIFICATE, D EITHER OF THE FOLLOWING: Y) ELGIN RIVERBOAT RESORT HAS NOT NOTIFIED THE CITY OF AN EVENT SUCH AS AND ACT OF GOD, CASUALTY, OR OTHER OCCURRENCE BEYOND THE CONTROL OF ELGIN RIVERBOAT RESORT WHICH HAS PREVENTED E eIN RIVERBOAT RESORT FROM COMPLETING THE CONSTRUCTION AND DEVELOPMENT OF ITS RIVERBOAT GAMING CASINO. OR Z) NOTWITHSTANDING THAT ELGIN RIVERBOAT RESORT S NOTIFIED THE CITY OF AN EVENT SUCH AS AN ACT OF GOD,. CASUALTY, OR •THER OCCURRENCE BEYOND THE CONTROL OF ELGIN RIVERBOAT RESORT WHIIH HAS PREVENTED ELGIN RIVERBOAT RESORT FROM COMPLETING THE CONST`UCTION AND DEVELOPMENT OF ITS RIVERBOAT GAMING CASINO, A PE'IOD OF SIX (6) MONTHS HAS ELAPSED FROM THE DATE OF SUCH NOTICE, AND ELGIN RIVERBOAT RESORT HAS NOT COMMENCED THE CONSTRUCTION AND DE ELOPMENT OF ITS . RIVERBOAT GAMING CASINO SINCE THAT DATE. OR A(2) ELGIN RIVERBOAT RESORT, AN ILLINOIS VENTURE HAS COMPLETED THE DEVELOPMENT OF ITS RIVERBOAT GAMING CASINO IN TH: CITY OF ELGIN BUT HAS DISCONTINUED OPERATIONS OF THE CASINO WITH T E RESULT THAT THE CITY OF ELGIN HAS RECEIVED LESS THAN $2 MILLION N THE AGGREGATE IN REVENUES FROM GAMING TAXES, ADMISSIONTAXES, AND RENT PAYABLE TO THE CITY OF ELGIN. IN ACCORDANCE WITH THE _GROUND LEAS: AGREEMENT DATED JUNE 24, 1992 BETWEEN THE CITY OF ELGIN AND ELGI ' RIVERBOAT RESORT. ORIGINAL JJ PLEASE ADDRESS ALL CORRESPONDENCE TO: Continental Bank N.A. • Letters of Credit-1580•231 South LaSalle Street,Ch'cago, Illinois 60697 Eli "Ili r Agenda Item No. A ( 3) , ,..,,,4 e ..D�g72D F`g1 January 5, 1994 TO: Mayor and Members of the City Council FROM: Robert 0. Malm, Interim City Manager SUBJECT: Letters of Credit from Elgin Riverboat Resort PURPOSE The purpose of this memorandum is to present for your review and approval a proposed letter agreement concerning letters of credit received to guarantee the developer's obligations. BACKGROUND The development agreement requires the developer to provide a two million dollar bond or similar security instrument to guarantee developer's performance. The security is to be released when the city receives two million dollars in revenue. Each of the partners in the project has submitted a letter of credit in the amount of one million dollars. They have also submitted a proposed letter agreement, a copy of which is attached, which provides that if either or both of the letters of credit are not renewed the city will draw on the letter and hold the funds received as security pursuant to the terms of the development agreement. FINANCIAL IMPACT None. RECOMMENDATION It is recommended that execution of the letter agreement be authorized. Rob r . Ma m City, I C y Manager EWJ/nr eik Attachment Elgin ,,, Riverboat Resort December i 5 , 1993 CITY OF ELGIN 150 Dexter Court Elgin, IL 60120-5555 ATTENTION: Erwin W. Jentsch, Esq Corporation Counsel RE: F1gin Riverboat Resort Gentlemen: In connection with that certain Development Agreemen dated June 24, 1992,between rk the City of Elgin ("City") and the predecessor in interes to Elgin Riverboat Resort, an Illinois partnership ("ERR"), ERR is obligated to delive to City a bond in the amount of $2,000,000 in the form provided in the Developm:nt Agreement as security for certain obligations of ERR arising under the Develop ent Agreement. ERR is delivering herewith two (2) irrevocable lette . of credit, in the amount of $1,000,000 each, in satisfaction of ERR's requiremen under Section VI.B. of the Development Agreement. By its acceptance of this 1.tter and the letters of credit, City hereby agrees and acknowledges that its receipt o' the letters of credit delivered herewith satisfies the obligations of ERR arising nder Section VI.B. of the Development Agreement. City also agrees that, in the event either or both of I e letters of credit delivered herewith are not renewed while the obligations secur d by the letters of credit in accordance with the Development Agreement remain •utstanding, City may make a draw on the letter(s) of credit not so renewed. There pon, City shall hold the funds received in lieu of the letters of credit as security for t•e obligations of ERR arising under the Development Agreement as if City held the security referred to in Section VLB. of the Development Agreement. City covenan and agrees that, whether it holds letter(s) of credit or cash pursuant to Sectio s VI.B. of the Development Agreement, it shall deliver to ERR whatever security 'ty holds upon fulfillment of the provisions of Section VI.B.3. of the Development • . eement (together with any interest earned on cash held as security). r CITY OF ELGIN Page 2 December , 1993 Kindly indicate City's acceptance of the provisions of s' letter agreement by causing this letter to be executed on behalf lof the City where dicated below and returning two (2) executed copies to Michael C. Shindler,Hyatt I evelopment Corporation, Vice President and General Counsel, 200 West Madison S et, Chicago, IL 60606. Thank you. Very truly yours, ELGIN RIVERBOAT RESORT By: RBG, L.P., one of its partners By: HCCA Co s . :t n, ' ;general partner/ By: a► ' 1 'chard I Schulze Vice Pr-sident Agreed and Accepted and Receipt Acknowledged CITY OF ELGIN By: Name: Title: