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92-0624 Elgin Riverboat ResortC% G RESOLUTION AUTHORIZING EXECUTION OF A DEVELOPMENT AGREEMENT WITH ELGIN RIVERBOAT RESORT BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that George VanDeVoorde, Mayor, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to respectively execute a Development Agreement, substantially as in the form attached hereto, on behalf of the City of Elgin with Elgin Riverboat Resort for the establishment and operation of a riverboat gambling facility within the City of Elgin, a copy of which is attached hereto and made a part hereof by reference. s/ George VanDeVoorde George VanDeVoorde, Mayor Presented: June 24, 1992 Adopted: June 24, 1992 Vote: Yeas 4 Nays 3 Recorded: Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk DEVELOPMENT AGREEMENT THIS AGREEMENT, dated the 24th day of June, 1992, by and between the City of Elgin, a municipal corporation, (hereinafter referred to as the "City"), and Elgin Riverboat Resort, a partnership consisting of M.S.E. Investments,Inc., Last Chance Investments, Inc., Diamond Gold, Inc, and Gold Strike Investments, Inc. (hereinafter referred to as the "Developer "); WHEREAS, the State of Illinois has adopted the Riverboat Gambling Act (Public Act 86 -1029) which, effective as of February 7, 1990, legalized riverboat gambling on navigable waterways in the State of Illinois including the Fox River running through the City of Elgin, Illinois; and WHEREAS, the Riverboat Gambling Act states that the Illinois Gaming Board may issue a license authorizing a riverboat to dock in a municipality only if, prior to the issuance of the license, the governing body of the municipality has by majority vote approved the docking of riverboats in the municipality; and WHEREAS, Messrs. Michael S. Ensign, William A. Richardson, David R. Belding and Peter A. Simon have presented to the City their plan for the establishment of a riverboat gaming facility on the Fox River within the corporate limits of the City of Elgin to be owned and operated by said individuals or by an entity which they will own and control; and WHEREAS, it appears that the establishment of riverboat gambling within the corporate limits of the City of Elgin, Illinois, will generate substantial tax revenues for and increase employment opportunities within the City of Elgin and will otherwise be in the best interests of the City. WHEREAS, the Corporate Authorities of the City have formally endorsed and supported by passage of a resolution on November 13, 1991, the issuance of an owner's license by the Illinois State Gaming Board to the Developer to permit the establishment and operation of a riverboat gambling facility which docks within the City's corporate limits; and WHEREAS, the City in the exercise of its home rule authority and as owners of the real estate described herein desires to facilitate the Developer's gaming operation and the development of the surrounding area; and WHEREAS, the Developer intends to make application to the Illinois Gaming Board for the issuance of a owner's license as provided in Section Six of the Riverboat Gambling Act, Illinois Revised Statutes, Chap. 120, Par. 2401, et. seq; and NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: Definitions: The following items shall have the meaning ascribed when used in this agreement: "Preliminary Approval" -- Illinois Gaming Board reservation of a license in the name of the Developer. 2. "Temporary License" -- Illinois Gaming Board grant of a temporary operational license following a successful operational test cruise. 3. - "Permanent License" -- Illinois Gaming Board issuance of a permanent license. 4. "Improvements" -- All buildings, structures, and improvements hereafter constructed upon the land during the term of the lease or option, and any restoration, addition to, or replacement thereof, but excluding from therefrom the land and Developer's trade fixtures. 5. "Land" -- Real property of the City upon which Developer erects structures or which Developer improves as provided in this Agreement. 2 I. Riverboat, Site & Pavilion A. Riverboat Boat. The Developer shall construct not more than one boat consistent with the Illinois Riverboat Gaming Act, and resembling as closely as practical, the boat shown in the preliminary plan (Exhibit A), at a size not to exceed 100' x 400', capacity of approximately 1200 gaming positions, 1500 passengers plus crew, substantially in accordance with the Illinois Riverboat Gaming Act, to be in operation within one year from the date the Developer obtains a preliminary approval for a State gaming license, or one year from the date which the site is made available by the City, whichever occurs later. 2. Operational Plan. The Developer shall prepare and submit to the City an operational plan for construction of the boats which shall address concerns such as noise, hours of construction, and other related construction activities and provide the City with a schedule identifying staging and completion schedules. The City shall grant such permits necessary or required for construction, upon receipt of applications and fees in compliance with applicable ordinances, statutes and regulations. B. Site. The site for this project is the northeast comer of National Street and the Fox River, and includes property legally described as follows: see attached exhibit B 2. A preliminary site plan including building elevations, riverboat design concept, location of the buildings, access and parking is hereby approved by the City and made a part of this Agreement as "Exhibit A." A detailed design site plan of the total land including parking, the pavilion, and the riverboat, shall be submitted to the City prior to the issuance of the license by the State Gaming Board, together with an application to reclassify the site and for approval of a planned unit development to be filed not later than November 1, 1992, provided that City has obtained the necessary permits and easements from the Kane County Forest Preserve District. City shall pass necessary and appropriate ordinances upon determining that the Developer's application and plans comply with applicable statutes, regulations and ordinances. 3. Environmental Conditions. The City agrees, represents and warrants that as of July 1, 1993: 9 (i) no Hazardous Materials will be located on, in or under the Site; no portion of the Site will currently be in use for the disposal, storage, treatment, processing, or other handling of Hazardous Materials; no underground storage tanks will be located on, in, or under the Site and all underground storage tanks formerly existing on the Site will have been properly removed and /or filled in accordance with all applicable laws and regulations; (iv) no investigation, administrative order, consent order, litigation, settlement or legal action with respect to Hazardous Materials will be pending or, to the City's best knowledge after diligent inquiry, will be threatened, with respect to the Site; (v) the Site will comply, and to the City's best knowledge after diligent inquiry all prior uses of the Site have at all times complied, with all applicable laws and regulations relating to environmental matters or Hazardous Materials. The term "Hazardous Materials" means (i) any "hazardous substance" as defined by the Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et.s . ; (ii) asbestos; (iii) polychlorinated biphenyls; (iv) petroleum, oil, gasoline (refined and unrefined) and their respective byproducts and constituents; and (v) any other substance which by any governmental requirements requires special handling in its use, collection, storage, treatment or disposal. 4. Environmental Audit. Not later than November 1, 1992, the City shall obtain at its own expense and provide to the Developer an environmental audit (phase one, and if required thereafter, phase two and phase three) of the proposed areas which Developer intends to construct buildings on the Site. The audit shall verify the accuracy of the City's representations and warranties and shall disclose , no environmental conditions which might negatively affect the construction or completion of the project. C. Pavilion. The Developer shall construct a pavilion on the site which will be not less than 30,000 square feet,generally consistent with the preliminary site plan, subject to engineering and design modifications.. It shall include a branch Elgin area visitors center of not less than 500 square feet on the main floor, suitable to market Elgin area activities. II. Operations/Hours A. Pavilion. Any liquor activity in the pavilion shall be conducted in accordance with the prevailing City Liquor Ordinance and applicable state law. Use at the Pavilion may include but is not limited to, food and beverage sales, retail restaurant liquor sales, entertainment, and all gaming activities permitted under state law, provided the permitted uses comply with codes and ordinances. B. Riverboat - Closure. The riverboat operations shall be closed for at least four consecutive hours in any 24 -hour period, Monday through Friday, and two consecutive hours in any 24 -hour period on Saturday and Sunday. Cruise Day. For the purposes of this paragraph, the fast cruise day of each week begins Monday at 6:00 a.m., and ends twenty hours later. The last boarding period for cruise days Sunday through Thursday shall not begin later than 1:00 a.m., and for cruise days Friday and Saturday not later than 2:00 a.m.. Notwithstanding the above, the boarding period on a Sunday cruise day shall not begin prior to 9:00 a.m. M. Option & Lease Agreement The City hereby grants to the Developer a two -year option, commencing upon execution of this agreement by Developer and an authorized officer of the City pursuant to authority granted by City's corporate authorities., for the Developer to lease the site as described above. The Developer shall pay $50,000 to the City within thirty days following the execution of this agreement, and an additional $50,000 on the first anniversary date of this Agreement. The Developer may exercise said option by tendering an executed copy of the Lease Agreement to the City, which Lease Agreement is marked as Exhibit 1, attached hereto and incorporated herein. IV.- Successorship A. Developer reserves the right, subject to Illinois and Nevada state law, to transfer the ownership, or a portion thereof, of its entity, to a corporation or joint venture, so long as it maintains not less than a 51 percent controlling ownership interest in the resulting entity. B. During the entire term of this Agreement, and upon the exercise of the lease, including renewals thereof, the option and /or lease, including renewals thereof, if for any reason the Developer desires to cease operations, the Developer shall have the following options: 5 1. Developer may sublease the site and any improvements thereon to a non - gaming operation with the City's approval. 2. Developer may sublease or sell the gaming operation and any improvements to the site to a gaming operation with the City's and State's approval. 3. City shall have the right to exercise its remedies under the performance bond as more fully set forth in paragraph 6B of this Agreement. If the Developer abandons the operation, it may remove all of its personal property (gaming machines, gambling equipment, etc.), and forfeit the lease, bond and any improvements to the site and the boat to the City as liquidated damages and as the City's exclusive remedy for termination of the Development Agreement and Lease. 4. Any reference in this Agreement or Lease to the City's approval shall be construed to mean that the City shall not unreasonably withhold its consent, but shall not otherwise limit the City's discretion. V. Additional Obligations of the City A. The City shall assist and use its best efforts to help the Developer obtain such permits from IDOT, Army Corp of Engineers, Kane County Forest Preserve, or such other governmental agencies necessary for the development of the site for the purposes described. The City shall execute any documents required, apply for permits in the City's name, if necessary, and otherwise cooperate jointly, if necessary, with the Developer in any application for permits required of this project. Developer agrees to pay all fees in connection with any studies or permit applications required by any agency necessary for the development of the site, however Developer shall not be required to reimburse the City for any time or expense incurred by it in connection with its obligation hereunder. In addition, Developer shall provide all required information, including plans, specifications and insurance required by any governmental agency. In the event that Developer is unable to obtain any necessary permits or easements from the Kane County Forest Preserve District by November 1, 1992, Developer shall be entitled to a refund and return of all option monies paid to the City, as well as the release of the bond as described hereinafter. Developer shall be solely responsible for any obligation under any permit or grant of easement and shall indemnify and hold harmless the City against any claim, loss or liability imposed. B. The City shall assist and use its best efforts to work with local, regional, and state authorities to provide appropriate signage along state highways into the Elgin area to promote and recognize the Developer's operation. R C. The City shall use its best efforts to facilitate the development of the project, its support areas, the parking lot, pavilion improvements, including obtaining any third -party approvals from neighboring property owners or users including the Kane County Forest Preserve. With regard to the City's obligation to provide parking, the City shall provide adequate additional parking contiguous to the Site to serve the project. The parking shall be free to Developer's customers and contiguous shall mean adjacent to National St, or Prairie St. or Bluff Trail(Wellington St.) D. The City represents that all off -site water and sewer service has been brought to the land and site within three (3) months of the date the Developer obtains a preliminary approval. F. The City shall support the license application of the Developer to the Illinois Gaming Board for the issuance of the license permitting the Developer to provide riverboat gambling activities on the Fox River in downtown Elgin on the site as defined herein, and shall appear before the board through an appropriate authorized representative. G. The City shall use its best efforts to accomplish its obligations under this Agreement and to facilitate the opening of the project and the parking lot on or before March 1, 1994. VI. Additional Obligations of the Developer A. Guaranly. When an occupancy permit is issued and the Developer obtains its temporary license, commences gaming activities on the riverboat and during the term of the lease, Developer guarantees that the City shall receive the sum of at least $500,000 annually(to be prorated the first year) from one or the combination of the following sources: (1) lease payments; and (2) State admission tax, or its equivalent if replaced. B. - Bond. 1. Developer agrees to provide a $2 million bond for the purpose of guarantying that the project will proceed to operations and to further provide security for the City for improvements which the City is obligated under this Agreement to complete, in one of the following form: (1) letter of credit; (2) commercial security bond; (3) certificate of deposit, or its equivalent; or (4) escrow account with interest paid to Developer. 2. The public improvements on the east and west banks of the Fox River from National Street to Chicago Street pursuant to the Center City Master Plan and soon- to -be- completed E.D.A.W. Plan, excepting that 7 portion of the bank on the Developer's site, shall be constructed by City. 3. The bond shall be posted within 60 days of the Developer's preliminary approval or commencement date of construction of permanent improvements to the Site, whichever shall first occur. The bond shall be released when the City receives $2 million in revenues from gaming tax and admission tax revenues or lease payments as defined therein, or as otherwise provided in this agreement. C. Parkin,g/Traffic. A parking and traffic consultant shall be retained and paid by the Developer to complete a report in support of the land use application for rezoning and special use -- PUD. All improvements on the site shall be paid for by the Developer. D. The Developer shall pay for all necessary improvements of the riverbank on the Developer's site in accordance with the Developer's site plan pursuant to the needs of the project. E. The Developer shall construct and pay for all of the necessary improvements to Grove Avenue from Prairie Street to National Street, provided they are directly related to the project. F. The Developer shall construct and pay for a landscaped green belt adjacent to the northern boundary of the site, to be designed by the Developer's architect and as approved by the City as part of the Developer's land use and zoning application. G. The Developer shall utilize two (2) officers from the Elgin Police Department for security purposes on the land, which obligation shall be reviewed in 36 months to determine the continued need for such employment. The City shall provide said officers at the established contract rate in effect with no overtime billing. The deployment shall be determined by the Developer and the Chief of Police jointly. H. The Developer shall establish and implement an affirmative action plan and program consistent with Federal and State law. The Developer has no obligation with regard to any sub - lessees to monitor and conform their conduct to any Federal or State law, except as required by Federal and State law. 1. The Developer shall not enter into separate agreements with any other governmental agency. J. Upon the issuance of a permanent gaming license to the Developer, the Developer shall not operate a gaming facility at any other location in the State E of Illinois unless the Elgin Riverboat Resort continues its full gaming operation in Elgin, and the individual partners identified herein own a majority interest in the Elgin Riverboat Resort partnership. K. A shuttle bus system similar to a trolley on wheels shall be established and operated between the two public transportation stations and the retail and commercial establishments that lie between the site and the northem -most station during the normal operating hours in these areas. Trolley service shall not be required before 10:00 a.m., and the Developer reserves the right to charge for such service for moving center city consumers throughout the center city area. There shall be no charge for trolley use by customers of Developer. L. The Developer shall provide City with copies of sales, admissions and gaming tax returns within 30 days after filing or payment. M. The Developer shall file an application for rezoning and special use -- P.U.D., on or before November 1, 1992, provided that the City has obtained the necessary permits and easements from the Kane County Forest Preserve District, said application to be in general accordance with the Preliminary Site Plan (Exhibit A) and requirements of applicable ordinances. VII. Joint Obligations of Developer and City A. The Developer and the City shall work jointly with the Kane County Forest Preserve to provide for secured access as shown generally on the Preliminary Site Plan between the pavilion and the riverboat (enclosed loading ramp) for passengers. B. An advisory committee composed of representatives of the Fox River Task Force, Heritage Commission, and Center City Development Corporation shall work with the land planners, architects, the Developer and the City, to implement the theme of the project as presented in Exhibit A. C. The City shall provide the Developer or its representatives with a current set of all applicable ordinances with which the Developer will be required to comply, and support all applications for zoning, licensing and code compliance, it being anticipated and understood that a special use PUD will be required of the Developer. Developer shall also comply with all applicable federal and state laws. Z VIII. Approval. The individual partners of the Developer, Michael S.Ensign, William R. Richardson, David R. Belding and Peter A. Simon, operate gaming establishments in the State of Nevada, and each is licensed by and subject to the jurisdiction of the Nevada State Gaming Control Board and the Nevada Gaming Commission. As a result, this agreement is subject to review by each and conditional upon approval of the Nevada State Gaming Control Board and Nevada Gaming Commission. In the event that approval as required herein is not obtained within 180 days from the date of this Agreement, this Agreement shall be, at the election of either party, considered null and void. IX. Time is of the Essence. Time is of the essence of this Agreement and all provisions relating thereto shall be strictly construed. X. Successors and Assigns. The terms, covenants and conditions hereof shall be binding upon, apply and inure to the benefit of the heirs, executors, administrators, successors in interest and assigns of the parties hereto. No rights, however, shall insure to the benefit of any assignee, sub - lessee, or licensee of the Developer unless such assignment, sub -lease or license has been consented to by the City in writing as provided herein, said consent and approval by the City shall not be unreasonably withheld. XI. Construction and Venue. This Agreement shall be construed in accordance with the law of the State of Illinois, and any action brought to enforce or interpret said Agreement shall be brought in the Circuit Court of Kane County, Geneva, Illinois. 10 IN WITNESS WHEREOF, we have set our hands and seals on the day first above written. Elgin Riverboat Resort,a partnership consisting of M.S.E. Investments, Inc Gold Strike Investments, Inc Each of the individuals hereinafter agree to guarantee all of the obligations of the Elgin Riverboat Resort Michael S. Ensign William A. Ric ardson 11 City of Elgin, a municipal corp., By:/ George V Voorde, Mayor Attest: Dolonna Mecum, City Clerk ay 7Z 46 WOW''I 'N h"J 73 uv- JOE i L7 1 WT-- FF J-1 -T7 It A 011:_/ Legal Description LOTS 2- 141NCLUSIVE,IN BLOCK 358 OF 0. DAVIDSON'S ADDITION TO ELGIN, IN THE CITY OF ELGIN, KANE COUNTY, EL LOTS 1 -28 INCLUSIVE, IN BLOCK 359 OF O. DAVIDSON'S ADDITION TO ELGIN, IN THE CITY OF ELGIN, KANE COUNTY, IL LOTS 1 -12 INCLUSIVE OF DAVIDSON'S GROVE AVE SUB. IN THE CITY OF ELGIN, KANE COUNTY, IL THAT PORTION OF WELLINGTON AVE LYING SOUTH OF THE SOUTHERNMOST PART OF LAKE STREET DESCRIBED AS WELLINGTON ROW BETWEEN LAKE STR_=ET AND NATIONAL STREET IN THE CITY OF ELGIN, KANE COUNTY, IL LOTS 4,5 AND 6 ON BLOCK 379 OF RAILROAD ADDITION TO ELGIN, IN THE CITY OF ELGIN, KANE COUNTY, IL i