94-162 Resolution No. 94-162
RESOLUTION
AUTHORIZING EXECUTION OF A THIRD AMENDMENT TO
DEVELOPMENT AGREEMENT AND GROUND LEASE
WITH ELGIN RIVERBOAT RESORT
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that George VanDeVoorde, Mayor, be and is hereby
authorized and directed to execute a Third Amendment to
Development Agreement and Ground Lease on behalf of the City
of Elgin with Elgin Riverboat Resort for the 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 8, 1994
Adopted: June 8, 1994
Vote: Yeas 6 Nays 1
Attest:
.ter
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
July 5, 1994
MEMORANDUM
TO: Loni Mecum, City Clerk
FROM: Erwin W. Jentsch, Corporation Counsel
SUBJECT: Third Amendment to Development Agreement and Ground
Lease with Elgin Riverboat Resort
Attached for your files is the original executed Third
Amendment to Development Agreement and Ground Lease with Elgin
Riverboat Resort.
416 EW
nr
Attachment
THIRD AMENDMENT
TO
DEVELOPMENT AGREEMENT AND GROUND LEASE
THIS AGREEMENT is made and entered into as of June 9, 1994 by
and between CITY OF ELGIN, a municipal corporation (hereinafter
referred to as the "City") , and ELGIN RIVERBOAT RESORT, an Illinois
partnership (hereinafter referred to as the "Developer") .
RECITALS
A. City and Developer have heretofore entered into a certain
Development Agreement dated as of June 24, 1992 contemplating the
establishment of a riverboat gaming facility along the Fox River on
property owned by the City and legally described therein
(hereinafter referred to as the "Leased Premises") . The
Development Agreement has heretofore been amended by a certain
Amendment to Development Agreement dated as of June 23, 1993 and a
certain Second Amendment to Development Agreement and Ground Lease
Agreement dated as of January 20, 1994 . For purposes hereof, the
Development Agreement, as so amended, will be hereinafter
collectively referred to as the "Development Agreement".
B. Pursuant to the provisions of the Development Agreement,
the City, as Landlord, and Developer, as Tenant, have heretofore
entered into the Ground Lease Agreement referred to in the
Development Agreement as of January 20, 1994 (the Ground Lease
Agreement, together with relevant provisions of the Development
Agreement amending the same, being herein referred to as the
"Lease") .
C. The Developer has commenced construction of its proposed
riverboat on property adjacent to the Leased Premises and described
below as the "East Parcel" and the "West Parcel" and will, when the
riverboat is completed, move the same to a dockside location
adjacent to the Leased Premises.
D. City and Developer have now agreed that Developer will
provide financial support and expertise to the City for certain
additional public improvement projects and City and Developer have
agreed to make certain amendments to the Development Agreement and
the Lease, all as more fully hereinafter set forth.
NOW, THEREFORE, it is hereby agreed, by and between the
parties hereto, as follows:
ARTICLE I
SOUTH GROVE STREET PROJECT
1.01 Statement of Intent. The City has heretofore closed a
portion of South Grove Street in the City, extending from Chicago
Avenue to Spring Street, to vehicular traffic and has created a
pedestrian mall. The City Council has heretofore approved a design
concept for restoration of vehicular traffic entitled "Conceptual
Option 2 (Medium Quality) ", contemplating the removal of the
existing pedestrian mall, the re-opening of that portion of South
Grove Street to vehicular traffic and the construction and
installation of certain related landscaping features and other
public improvements. Developer has determined that the re-opening
of South Grove Street to continuous and uninterrupted vehicular
traffic will benefit its riverboat project and, accordingly,
Developer has agreed to provide certain financial and other support
to the South Grove Street project. Whenever in this Article I
there is reference to the "South Grove Street Project" or the
"Project" the same shall mean the removal of the existing
pedestrian mall, the construction of a new street and sidewalk to
permit both vehicular and pedestrian traffic, and the other
landscaping and public improvements contemplated by the City
Council, or so much thereof as may be completed prior to the date
referred to in Section 1. 06 (B) .
1.02 Planning. The City has heretofore retained design
professionals to prepare plans and specifications for the Project.
To the extent additional design professionals are required,
Developer will consult with the City regarding the same and will
assist the City in the selection process. In addition, if
requested by the City, the Developer will review contracts with
design professionals and advise the City on terms to be
incorporated therein.
In connection with the design process, Developer will work
with the City and its design professionals to prepare detailed
plans and specifications embodying the design heretofore approved
by the City Council and will consult on means and methods of
preparing design packages for bidding purposes so as to permit
expeditious construction of the Project and efficient budget
controls. It is currently contemplated that plans and
specifications will be prepared so as to divide the Project, to the
extent feasible, into three (3) segments consisting of (i)
demolition; that is the removal of the existing pavement and
landscaping features; (ii) street construction necessary to bring
the Project to "functional completion"; and (iii) final completion,
consisting of construction necessary to bring the Project to full
and final completion. For purposes hereof, the term "functional
completion" includes all work associated with the Project as
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described on Annex 1 hereto other than those portions of the
Project designated as Streetscape Furnishings (bid items 12.01
through 12 .07) , Streetscape Amenities (bid items 13 .01 through
13. 08) , and special fountain lighting (bid item 9.01) . The
construction items excluded from the definition of "functional
completion" will be herein referred to as the "finish items". No
plans and specifications shall be deemed complete until approved by
the City, it being understood and agreed that the City may elect to
approve plans and specifications separately for each segment of the
Project in order to permit a more expeditious process of bidding,
contract letting and commencement of work in the most expeditious
manner.
1. 03 Construction Process.
(A) Attached hereto as Annex 1 is a description of the
various items to be included in the Project as well as preliminary
estimates of cost. Annex 1 is being attached hereto in order to
better define the Project although, it is understood, that the
detailed plans and specifications may vary from the description in
Annex 1, and actual costs will vary as well. Developer agrees that
it will, from time to time, as plans and specifications are
prepared and cost estimates are refined, update the information
contained in Annex 1.
(B) Developer will, after approval of plans and
specifications for the South Grove Street Project contemplated by
Section 1.02, cause construction of the same to be effected as
expeditiously as possible, all in accordance with the plans and
specifications as theretofore approved by the City. In connection
with foregoing, the Developer will enter into one or more
construction contracts, supply or purchase contracts, and other
related contracts and agreements (which shall include, without
limitation, contracts with inspecting engineers and construction
managers) , with contractors, suppliers and materialmen, as
necessary to cause completion of the South Grove Street Project as
herein contemplated; provided, however, no contract shall be
entered into by Developer without the written approval of the City.
In connection with the letting of contracts, the Developer shall
select the process which it deems most reasonable in order to
effect completion of the South Grove Street Project in the most
expeditious manner possible and may elect, at its discretion,
either to employ a method of competitive bidding or to let
contracts without competitive bidding, as it shall determine;
provided, however, (i) Developer will consult with the City
regarding all aspects of the bidding and contract letting process;
(ii) all contracts shall require contractors to comply with
prevailing wage rate requirements applicable to contracts made
directly with the City; (iii) all contracts will provide that any
warranties, express or implied, applicable thereto shall be for the
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benefit of the City; and (iv) will require the contractors to carry
builders risk and other insurance satisfactory to City and
Developer naming City and Developer as additional insureds.
(C) Contracts will be let for demolition and construction up
to the items of construction necessary to achieve functional
completion. No contracts will be let for any finish items unless
Developer and City agree that, after letting any such contracts,
the total cost of the Project will not exceed Two Million Four
Hundred Thousand Dollars ($2,400, 000) . If either Developer or the
City are of the opinion that any contract for finish work, or the
sum of anticipated costs for all contracts for finish work, would
cause the total cost of the Project to exceed $2,400, 000, no
contract shall be let until measures are taken to the reasonable
satisfaction of both City and Developer to effect a cost reduction
sufficient to enable total costs to be equal to or less than
$2,400, 000, such measures to include, without limitation, redesign
of the Project with respect to the finish items to eliminate
certain aesthetic or other design features such as pavers,
landscaping, fountain lighting and other items. The items to be
eliminated, and the method of achieving cost savings, shall be
within the discretion of the City, it being understood and agreed,
however, Developer shall have no obligation to let any contracts
for finish items, or to incur any obligations with respect thereto,
unless (i) Developer determines, in its reasonable discretion, that
the total cost of completing the finish work as revised by the City
will cause total Project costs to be equal to or less than
$2,400, 000; or (ii) by appropriate action of the City Council, the
City shall have agreed to pay that portion of the costs of
completion of finish work which would cause total Project costs to
exceed $2, 400, 000.
(D) During the course of construction, Developer will
supervise all contractors, materialmen and suppliers and provide
any necessary coordination among the contractors. Developer will
also review all requests for payment, and all contractor affidavits
and lien waivers, will provide copies thereof (or such thereof as
the City may request) to the City and will recommend the amounts to
be paid periodically and from time to time during the course of
construction; provided, however, no payments shall be made to any
contractor, materialmen or supplier without the written approval of
the City. The City agrees that it will review all requests for
payment, and will not unreasonably withhold or delay its approval
thereto. If, for any reason, the City disapproves any requested
payment which has been recommended by Developer, it shall set
forth, in writing, its reasons therefor, and the amount, if any, it
would be willing to approve for payment at that time.
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(E) Developer, in consultation with contractors, will prepare
and deliver to the City schedules for completion of the work and
will update such schedules from time to time as Developer deems
necessary.
(F) Developer will prepare or review punch lists prepared
from time to time by the specialists retained by the City, and will
supervise the completion of all checklist items and will advise the
City from time to time (in writing if requested by the City) as to
the status of completion of all such items. In addition, from time
to time during the course of construction, Developer will report to
the City (in writing if requested by the City) as to the overall
progress of the Project, and the performance by each of the
contractors, materialmen and suppliers. If deemed necessary, from
time to time, Developer will advise the City as to any enforcement
actions which might be necessary against any of the contractors,
materialmen and suppliers and will take such action as it deems
reasonably necessary, so long as any such action instituted by the
Developer shall have been approved in writing by the City.
1.04 Waiver of Developer Liability. In the performance of its
duties hereunder, it is understood and agreed that Developer is
acting solely as advisor and consultant to the City and not as a
designer, architect, engineer, contractor, materialman or supplier.
Accordingly, Developer shall have no liability to the City, or any
other third party, for (i) any defect or deficiency in any plans or
specifications, (ii) any defect in workmanship or materials; (iii)
any delays in completion of the work; or (iv) any deviation from
the approved plans and specifications. Without limiting the
generality of the foregoing, Developer shall have no liability in
the event any plans and specifications are not in compliance with
applicable provisions of law, for any structural defects in the
construction or in any of the materials or supplies incorporated
therein or used in connection therewith, for the acts or omissions
of any specialist, contractor, materialman or supplier during the
course of construction or in connection with any related work, and
the City shall indemnify, defend and hold Developer (and its
partners, agents and employees) completely free and harmless
therefrom. In any contracts let with respect to the Project, the
contractor will be required to maintain in effect adequate builders
risk or similar insurance naming the City and Developer as
additional insureds.
1.05 Compensation. Developer agrees to perform its services
hereunder without any fee or other compensation, but shall be
entitled to reimbursement, as a Project cost, for its actual and
reasonable out-of-pocket costs incurred in connection therewith,
such cost and expenses to exclude, however, Developer's corporate
overhead and the salary and benefits of any of its regular
employees.
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1.06 Financial Contribution.
(A) Developer agrees to pay the costs and expenses incurred
in connection with the South Grove Street Project, including all
construction, construction management and inspection costs and
expenses (but excluding design costs) , which amount shall be
disbursed by Developer, from time to time, as the same become due
and payable (such payments to be made, however, subject to the
approval process set forth above) ; provided, however, in no event
shall Developer be obligated to expend in excess of Two Million
Four Hundred Thousand Dollars ($2,400,000) in connection therewith.
In the event the costs of the South Grove Street Project exceed
$2,400,000, the City shall be responsible for the payment thereof
and shall indemnify, defend and hold Developer (its partners and
agents) completely free and harmless therefrom. The provisions of
this Section 1.06 are for the sole benefit of (and may be enforced
solely by) the City, and are not intended for the benefit of (and
may not be enforced by) any third party such as any design
specialist, contractor, materialman or supplier.
(B) In the event, for any reason, the South Grove Street
Project has not been completed, or in the event, for any reason,
additional funds remain to be expended in connection therewith, at
December 31, 1994, Developer will deposit the amount, if any, by
which Two Million Four Hundred Thousand Dollars ($2,400,000)
exceeds the amounts theretofore expended by Developer in connection
with the Project, in a joint order escrow with a third party
mutually satisfactory to City and Developer who shall be instructed
to hold such funds and disburse them, from time to time, upon the
joint order of City and Developer, for the payment of Project
expenses theretofore unpaid. Funds in escrow shall be invested
from time to time in short term United States Treasury obligations
with the interest earnings thereon to be for the sole benefit of
Developer. Interest earned from time to time shall be disbursed to
Developer as soon as possible after receipt thereof by the
escrowee. Upon completion of the Project (as certified by the
supervising architect or engineer) , and upon payment of all costs
and expenses in connection therewith, any funds remaining in the
escrow shall be refunded to Developer. In the event, at such time,
there are any disputes with contractors, materialmen, suppliers or
specialists, funds sufficient to pay any amounts claimed to be due
by any such parties (up to the limit of the amounts then in the
escrow) shall be retained in escrow until such disputes are finally
and conclusively resolved.
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ARTICLE II
East Parcel Project
2.01 Statement of Intent. The East Parcel (legally described
on Exhibit A hereto) , is currently owned by the City and is subject
to a temporary construction access agreement in favor of Developer
for use of the East Parcel (together with the West Parcel) for the
construction of Developer' s riverboat. Following construction of
the riverboat, the City and Developer desire to improve the East
Parcel as a public parking lot, and to lease the same from the City
to Developer for said purpose, and also to acquire certain rights
to purchase the East Parcel as more fully hereinafter set forth.
2. 02 Lease of East Parcel. As expeditiously as possible after
the execution and delivery hereof, City and Developer will enter
into a lease (the "East Parcel Lease") with respect to the East
Parcel, on a form mutually satisfactory to City and Developer,
which shall contain the following material terms and provisions:
(a) Following expiration or earlier termination of the
temporary construction access agreement from City to Developer
of the East Parcel, and following completion of construction
of Developer' s riverboat, Developer will, at its sole cost and
expense, construct on the East Parcel a parking lot in
accordance with applicable legal standards. Construction will
include asphalt re-surfacing and striping, landscaping and the
installation of lighting and railings.
(b) The Developer will operate the parking lot on the
East Parcel, at its sole cost and expense, continuously
throughout the term of the East Parcel Lease, as a public
parking facility available for use, on a non-discriminatory
basis, by all members of the public.
(c) Operating policies with respect to the parking lot
shall be determined solely by Developer, including, without
limitation, hours of operation, provided, however, (i) in no
event shall any person be charged for the normal use of the
lot for vehicle parking; and (ii) the parking lot shall
maintain minimum hours of operation between 7: 00 a.m. and 6: 00
p.m. of each day (subject to closure for repair and
maintenance purposes) , but may, at Developer' s discretion, be
open at other hours as well.
(d) The term of the lease shall be five (5) years.
(e) Rental shall be One Dollar ($1. 00) per annum.
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(f) The City will indemnify, defend and hold Developer
(and its partners and agents) completely free and harmless of
and from any and all environmental liabilities, costs or
expenses relating to the East Parcel, including, without
limitation, the cost of hauling and disposing of contaminated
soils which may be excavated in connection with the parking
lot construction; provided, however, if the cost of disposing
of contaminated soils exceeds the cost of disposition of non-
contaminated soils, the difference shall be paid by the City.
If the City fails or refuses to make any payments herein
required, Developer may, in addition to any other rights or
remedies it may have, suspend construction of the improvements
until payment is made.
(g) During the term of the East Parcel Lease, the
Developer shall have the right to submit to the City a plan
for redevelopment of the East Parcel, together with the
redevelopment of the West Parcel and, if accepted, the City
shall agree to sell both parcels to the Developer at a price
to be agreed upon. While the City will have no obligation to
approve any such redevelopment proposal submitted by
Developer, it shall nevertheless consider, in good faith, all
such proposals actually submitted to it. City will agree (as
a covenant which will survive any earlier termination of the
Lease) that during the five (5) year period commencing on
commencement of the Lease, City will not develop or propose
any development of or on the East Parcel (other than for
public parking purposes) without the written consent of
Developer.
(h) For a period of five (5) years from the commencement
of the parking lease, Developer shall have the right to
purchase the East Parcel upon the following terms and
conditions: (1) Developer shall have concurrently exercised
its rights to purchase the West Parcel; (2) the purchase price
shall be fair market value for the East Parcel as determined
by an appraisal procedure to be set forth in the East Parcel
Lease; and (3) the deed of conveyance shall contain a reverter
in favor of the City whereby the East Parcel will revert to
the City, without additional consideration or payment to
Developer, in the event (a) on or prior to a date which not
sooner than three (3) years after the date of the deed
(subject to force majeure provisions) Developer shall have
failed to commence construction, or within five (5) years
after the date of the deed (subject to force majeure
provisions) shall have failed to complete construction, either
on the West Parcel, the East Parcel or the Leased Premises a
hotel, having not less than one hundred fifty (150) guest
rooms and suites, of a quality equal to or exceeding the
standard of quality currently applicable to the Nevada hotel
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properties owned by an affiliate of Nevada Landing, Inc. (an
affiliate of one of the partners of Developer) ; or (b)
Developer (or any successor owner of the East Parcel) shall
fail to maintain free public parking on the East Parcel
sufficient to accommodate the number of vehicles accommodated
on the East Parcel prior to the purchase thereof by Developer
except during such period of time as use for such purpose by
reason of force majeure or by reason of construction of an
improvement on the East Parcel. In its plans for the proposed
hotel, Developer will seek to provide a product of the highest
quality deemed appropriate by Developer given the anticipated
use of the hotel and the prevailing market conditions,
including consideration of an executive wing or floor.
(i) Notwithstanding the provisions of subparagraph (h)
above, if, prior to the purchase of the East Parcel by
Developer pursuant to the exercise of its option, but within
five (5) years after expiration of the five (5) year option
period referred to in subparagraph (h) above, the City
proposes to construct, or permit to be constructed, any
building or other improvement on the East Parcel, or any
portion thereof, the City shall first notify Developer thereof
in writing setting forth the nature of the proposed
development, and the portion of the East Parcel to be so
developed. Upon receiving such notice, the Developer shall
have thirty (30) days in which to notify the City in writing
of its intention to purchase that portion of the East Parcel
which the City proposes to develop, and, if Developer elects
its right to purchase as herein provided, the delivery of its
said notice shall constitute a binding contract between the
City and Developer for the purchase of the East Parcel at a
price equal to fair market value to be determined in
accordance with the appraisal procedures applicable to the
option referred to above and subject to the reverter
provisions set forth above. If Developer fails to exercise
its right to purchase as herein provided, the City may develop
that portion of the East Parcel which it had originally
proposed to develop free of any remaining rights of Developer
with respect thereto (including any rights under the options
set forth in subparagraph (g) above) .
2.03 Restoration of Lake Street. As soon as reasonably
practicable after Developer' s completion of construction of its
riverboat, and in any event concurrently with the construction of
the parking lot on the East Parcel, Developer will, at its sole
cost and expense, restore that portion of Lake Street running from
South Grove Street to Wellington Avenue (consisting of new curbs
and sidewalks, asphalt resurfacing, lighting and any restoration of
the base of the street necessary as a result of damage resulting
from Developer' s construction activities) to the standard of
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construction applicable to the portion of South Grove Street
running through the Leased Premises. Developer will retain all
design and construction contractors necessary for the prosecution
of such work, will submit its plans and specifications to the City
for approval (which approval shall not be unreasonably withheld or
delayed) and will commence and complete construction as
expeditiously as possible.
ARTICLE III
West Parcel Project
3 .01 Statement of Intent. The West Parcel (legally described
on Exhibit B hereto) , is currently owned by the City and is subject
to a temporary construction access agreement in favor of the
Developer for use of the West Parcel (together with the East
Parcel) for the construction of Developer' s riverboat. Following
construction of the riverboat, Developer has agreed to restore and
improve the West Parcel in consideration of the granting of certain
rights to purchase the West Parcel as more fully hereinafter set
forth.
3.02 Restoration and Improvement of West Parcel.
(A) As expeditiously as possible after expiration of the
temporary construction access agreement currently in effect between
the City and Developer, Developer will restore the West Parcel to
an open space which will include a restoration of the former
bicycle path on property adjacent to the West Parcel (representing
a continuation of the bicycle path on adjacent property) , and a
landscaped green space for the remainder of the West Parcel. The
plans will contemplate use of the West Parcel solely for passive
recreational use by the public without facilities for active use
such as sports or other activities. All costs and expenses
incurred in connection with the foregoing shall be borne and paid
for by Developer. Developer, however, will have the right, without
fee or compensation to the City, to use the West Parcel for events
or activities incident to its riverboat operations.
(B) Prior to commencing restoration of the West Parcel,
Developer will submit conceptual plans therefor to the City for its
approval, which approval shall not be unreasonably withheld or
delayed. Approval by the City shall relate solely to engineering
matters and compliance with legal requirements, and determining
that the plans and specifications contemplate restoration of the
West Parcel as herein described. Developer will consult with the
City regarding plans and specifications for the restoration of the
West Parcel, and will consider in good faith all suggestions made
by the City, but shall have no obligation to incorporate any design
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or construction changes which, in the reasonable opinion of
Developer, would materially increase the cost of the restoration
project.
(C) The City will indemnify, defend and hold Developer (and
its partners and agents) completely free and harmless of and from
any and all environmental liabilities, costs and expenses relating
to the West Parcel, including, without limitation, the cost of
hauling and disposing of contaminated soils which may be excavated
in connection with the foregoing. If the City fails or refuses to
make any payments herein required, Developer may, in addition to
any other rights or remedies it may have, suspend construction of
the improvements until payment is made.
3. 03 West Parcel Development Rights. In connection with the
foregoing, and as soon as reasonably practicable after the
execution and delivery hereof, City and Developer will jointly
cause to be prepared, and will execute and deliver, appropriate
legal instruments to the following effect:
(a) The City will agree, as a covenant running with the
West Parcel, that no development will be permitted on the West
Parcel, and it shall remain in its state as improved by the
Developer as contemplated by Section 3 . 02 above, for a period
of not less than five (5) years following execution and
delivery of the said agreement, without the written consent of
Developer.
(b) The Developer will agree that during the above
referred five (5) year period, the Developer will maintain the
West Parcel in a neat and orderly condition at its sole cost
and expense consistent with its original design and intended
use.
(c) The City will grant to the Developer, by written
instrument running with the West Parcel, an option to purchase
the West Parcel at any time during the five (5) period
referred to in subparagraph (a) above, upon the following
terms and conditions: (1) Developer shall have concurrently
exercised its rights to purchase the East Parcel; (2) the
purchase price shall be fair market value for the West Parcel
as determined by an appraisal procedure to be set forth in the
said instrument; and (3) the deed of conveyance shall contain
a reverter in favor of the City whereby the West Parcel will
revert to the City, without additional consideration or
payment to Developer, in the event, on or prior to a date
which not sooner than three (3) years after the date of the
deed (subject to force majeure provisions) Developer shall
have failed to commence construction, or within five (5) years
after the date of the deed (subject to force majeure
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provisions) shall have failed to complete construction, either
on the West Parcel, the East Parcel or the Leased Premises a
hotel, having not less than one hundred fifty (150) guest
rooms and suites, of a quality equal to or exceeding the
standard of quality contemplated by Section 2 . 02 (h) .
(d) Notwithstanding the provisions of subparagraph (c)
above, if, prior to the expiration of the five (5) year
periods referred to in subparagraphs (a) and (c) above, the
City proposes to construct, or permit to be constructed, any
building or other improvement on the West Parcel, or any
portion thereof, the City shall first notify Developer thereof
in writing setting forth the nature of the proposed
development, and the portion of the West Parcel to be so
developed. Upon receiving such notice, the Developer shall
have thirty (30) days in which to notify the City in writing
of its intention to purchase the West Parcel, and if Developer
elects its right to purchase as herein provided, the delivery
of its said notice shall constitute a binding contract between
the City and Developer for the purchase of such part of the
property as shall be identified to Developer in the original
notice from the City to Developer at a price equal to fair
market value to be determined in accordance with the appraisal
procedures applicable to the option referred to above and
subject to the reverter provisions set forth above. If
Developer fails to exercise its right to purchase as herein
provided, the City may develop that portion of the West Parcel
which it had originally proposed to develop free of any
remaining rights of Developer with respect thereto (including
any rights under the options set forth in subparagraph (c)
above) .
ARTICLE IV
Revisions to Development Agreement and Lease
4.01 Statement of Intent. The City and the Developer have
agreed that, in consideration of the mutual agreements of the
parties herein contained, and in order to further clarify certain
provisions of the Lease, the Lease will be amended as expeditiously
as possible as more fully hereinafter set forth.
4.02 Revised Lease Document. The parties hereto hereby
acknowledge that they have agreed that amendments to the Lease will
be entered into both for the purpose of altering certain of the
terms and provisions thereof, and also for the purpose of
clarifying the terms and provisions of the Lease. It is the
intention of the parties that the Development Agreement will only
contain terms and provisions applicable during the process of
development and construction of the Leased Premises and that all
terms and provisions applicable to the operation of the Leased
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Premises, and, to the extent applicable, Developer' s riverboat
gaming business, shall be set forth in a restated and amended Lease
Agreement. It is acknowledged, however, that the process of
revising, approving, executing and delivering both the Development
Agreement and the Lease will be time consuming. Accordingly, and
in order not to unduly delay the commencement and completion of
construction of the South Grove Street Project, the City and
Developer hereby agree, as a binding and enforceable agreement of
the parties effective immediately upon the execution and delivery
hereof, that they will enter into one or more written instruments
revising and restating both the Development Agreement and the Lease
in a manner consistent with the terms and provisions of this
Agreement and containing terms and provisions identical to those
currently contained in the Development Agreement and the Lease,
subject however to amendment and revision to incorporate the
following covenants and agreements of the parties hereto:
(a) The City acknowledges satisfactory completion of the
following covenants and obligations of the Developer under the
Development Agreement and the Lease and the following
approvals having heretofore been granted by the City:
(1) The City acknowledges that Developer has
submitted to the City detailed and final plans and
specifications for Developer' s riverboat, and for the
pavilion to be constructed on the Leased Premises and
acknowledges and agrees that, any provision of the
Development Agreement or the Lease to the contrary
notwithstanding, the riverboat and pavilion, if built
substantially in accordance with the plans and
specifications, will be in full compliance with the
provisions of the Development Agreement and Lease.
(2) The City has approved the Developer' s
operational plan for construction of the riverboat.
(3) The City has approved Developer' s planned unit
development for the Leased Premises and its plans and
specifications for the buildings and improvements to be
constructed, and now under construction, thereon.
(4) The City acknowledges receipt of all option
payments required to be paid (subject to the provisions
of Section 4. 02 (b) below) .
(5) The City acknowledges that receipt of the Two
Million Dollar ($2, 000, 000) bond required to be posted by
Developer in accordance with the provisions of the
13
Development Agreement and acknowledges that the bonds are
in full compliance with the requirements of the
Development Agreement.
(6) The provisions of Article VII of the
Development Agreement have all been completed and are
hereby deleted.
(7) The City acknowledges that Developer has not as
yet received its Temporary License or its Permanent
License (as said terms are defined in the Development
Agreement) any provision or reference in the Ground Lease
to the contrary notwithstanding.
(8) The City acknowledges and agrees that
Developer, Elgin Riverboat Resort, is a joint venture
consisting of Nevada Landing Partnership and RBG, L.P. ,
as its joint venture partners, and City hereby approves
the current ownership of the joint venture interests.
(b) Developer hereby agrees that it shall, concurrently
with the execution and delivery of the amended and restated
Development Agreement and Lease, pay to the City an additional
option payment of Fifty Thousand Dollars ($50,000) .
(c) All provisions of Article II of the Development
Agreement shall be incorporated in the restated and amended
Lease; provided, however, Article II(B) shall be revised and
superseded in its entirety to provide that Developer may
operate the riverboat continuously throughout the entirety of
each day and shall be obligated to close down operations only
for two (2) hours during any twenty-four (24) hour period,
selection of the two hour period of shutdown for each and
every day to be at the discretion of Developer.
(d) The City acknowledges that all of the obligations of
the Developer under Article V(C) and Article VI (F) and (I) of
the Development Agreement have either been completed or are no
longer applicable, and are hereby deleted. In addition, the
obligation of Developer under Article VI (L) of the Development
Agreement, to the extent the same requires delivery of copies
of sales tax returns to the City, is likewise hereby deleted
although Developer shall continue to provide copies of
admissions and gaming tax returns as currently required.
Developer shall also provide the City with its state sales tax
number and the sales tax numbers of its subtenants and
concessionaires.
14
(e) In lieu of the provisions of Article VI(G) of the
Development Agreement, Developer agrees that it shall,
commencing October 1, 1994 and for a period of five (5) years
thereafter, pay to the City an amount equal to Three Hundred
Fifty Thousand Dollars ($350, 000) per year, in equal monthly
installments due on the first day of each month, to be used by
the City to defray law enforcement costs which may be incurred
by the City, such obligation to terminate upon expiration of
the aforesaid five (5) year period, or, if earlier, upon
termination of the Lease.
(f) The City agrees that the shuttle bus system referred
to in Article VI (K) of the Development Agreement may be
operated either by Developer, by an independent contractor
selected and retained by the Developer, or by the PACE system
if arrangements suitable to Developer can be worked out with
PACE, so long as the shuttle bus system follows a route
through downtown Elgin and connects with each of the existing
METRA stations. At Developer' s option, charges, on a non-
discriminatory basis, can be made to any of the users of the
system in amounts determined from time to time by Developer.
The actual hours of operation of the shuttle bus system shall
be developed and determined by Developer.
(g) Any provision of the Development Agreement or Lease
requiring that the riverboat or pavilion or both be open for
business by a particular date are hereby deleted.
(h) The option to purchase the Leased Premises currently
contained in the Lease will be revised to be consistent with
the purchase options to be set forth in the written agreements
to be entered into with respect to the East Parcel and the
West Parcel as above provided, except that the term of the
option as contained in the Lease shall continue throughout the
Lease Term. The purchase price shall be fair market value
based on the value of the anticipated rental income stream to
the City.
(i) In Section 2 (A) (i) of the Lease, which defines the
term "Total Investment Costs", the reference to Forty Million
Dollars ($40, 000, 000) is hereby changed to read "Seventy-Five
Million Dollars ($75, 000, 000) " . It is understood that among
the costs to be included in determining the amount of Total
Investment Costs shall be the cost of temporary shipyard
construction facilities, the cost of dredging in the Fox
River, licensing costs, rental and option payments, and the
cost of constructing the improvements on the East Parcel and
the West Parcel.
15
. ,
(j) The term "Net After Tax Cash Flow" as defined in the
Lease was intended to provide for determination of the
relevant amount after the payment by the Developer of all
federal, state and local income tax returns. However, since
Developer is a partnership which is not subject to federal or
Illinois income taxes (all such taxes being the direct
obligation of the partners) the definition of said term shall
be revised to insert a formula which will deduct an amount
equal to the amount of income taxes which would have been
payable had Developer been an individual resident in the State
of Illinois and thereby required to pay federal, state and (if
applicable) local income taxes.
(k) Anything in the Lease to the contrary
notwithstanding, Developer shall be entitled to a credit
against that portion of its rent measured by its Net Operating
Income in order to enable Developer to recover any costs
incurred by Developer in connection with the South Grove
Street Project as contemplated by Article II above. Payment
of the component of Developer' s rent obligation measured by
Net Operating Income shall be made on an annual basis and such
annual credit shall be equal in amount to the lesser of: (i)
one-third (1/3rd) of the costs incurred by Developer in
connection with the South Grove Street Project (without
interest) ; or (ii) fifty percent (50%) of Developer' s rent
obligation to the extent such obligation is measured by
Developer' s Net Operating Income; provided, however, in no
event shall the total amount of all credits granted to
Developer pursuant hereto exceed the costs incurred by
Developer in connection with the South Grove Street Project
(without interest) .
(1) The City grants to Developer an easement over that
portion of South Grove Street which runs through the Leased
Premises for the purpose of constructing, maintaining and
operating a pedestrian bridge, over South Grove Street
connecting the parking garage and other parking areas with the
pavilion to be constructed on the Leased Premises.
(m) City and Developer acknowledges there are various
ambiguities in the Lease and other provisions of the Lease
which require clarification, all of which will be incorporated
in the restated Lease Agreement herein contemplated; provided,
however, no substantive changes shall be made in the terms and
provisions of the Lease not otherwise herein in this Agreement
contemplated, any such amendments to be solely for the purpose
of clarifying and making more certain the existing terms and
provisions thereof.
16
ARTICLE V
General
5.01 City Approvals. Except as to any provision herein
specifically requiring approval by the City Council, wherever in
this Agreement there is reference to approval by the City, or
consultation with the City, the same shall mean approval by, or
consultation with, the City Manager, or any person designated by
the City Manager in writing for purpose of granting such approvals
or for the purpose of engaging in any contemplated consultation, it
being understood and agreed that Developer may rely, and shall be
fully protected in relying, on any approval granted hereunder by
the City Manager or his designee, and shall have fully performed
its consultation and other duties by consulting with the City
Manager or his designee.
5.02 Effective Date. This Agreement shall be effective as of
the date hereof provided the execution and delivery hereof shall
have heretofore been approved by the City Council of the City.
5.03 Miscellaneous. Notices required or delivered hereunder
shall be in writing and shall be deemed duly delivered upon
compliance with the notice provisions currently in effect with
respect to the Development Agreement and the Lease. This Agreement
shall be governed by the laws of the State of Illinois, and shall
be fully binding upon the parties hereto, and their respective
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on their behalf as of the day and
year first above written.
CITY OF ELGIN, a municipal
corporat%•n
By:
Mayor
ELGIN R VERBOAT RESORT, an Illinois
limite, O=rt ership
/
By: V1446 use.
tailtrAUBTO
OTMMUMMMU
17
EXHIBIT A
Legal Description
(East Parcel)
That part of the Southwest Quarter of Section
13, Township 41 North, Range 8 East of the Third
Principal Meridian described as follows:
Lots 3 through 18 in Block 1 of 0. Davidson's
Addition to Elgin.
Also
Block A in Davidson's Grove Avenue Subdivision.
EXHIBIT B
Legal Description
(West Parcel)
That part of James T. Gifford's Addition and
Block B of Davidson' s Grove Avenue Subdivision and
Block 4 of 0. Davidson' s Addition to Elgin and lying
South of a line drawn parallel to the Southeasterly
line of said James T. Gifford's Addition, said line
passes through a point being 85 . 0 feet Southeasterly
(as measured along the West line of Grove Avenue) of
the South line of Prairie Street.
T X NNY
FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-MEDIUM QUALITY
Bid Item Description of Item Estimated Pay Unit Cost Iteirn Cost
Quantity Unit (Dollars) (Dollars)
SITE CLEARING AND DEMOLITION
1.01 Concrete Planters Removal & Disposal 27 Each 250.00- 6,750.00
1.02 Brick Paver& Base Removal &Disposal 3,500 CuYd 50.00 175,000.00
1.03 Concrete Sidewalk Removal &Disposal 100 CuYd 55.00 5,500.00
1.04 Conc. Curb&Gutter Removal & Disposal 620 L.Ft. 5.00 3,100.00
1.05 Tree Removal &Disposal 46 Each 300.00 13,800.00
1.06 Tree Grate&Found. Removal &Disposal 16 Each 100.00 1,600.00
1.07 Fountain &Piping Removal& Disposal 1 LSum 20,000.00 20,000.00
1.08 Centrum, Kiosks, &Clock Rem. & Disp. 1 LSum 25,000.00 25,000.00
1.09 Streetlights&Misc. Rem. &Disp. 1 LSum 10,000.00 10,000.00
1.1 Storm Structure Removal &Disposal 18 Each 300.00 5,400.00
1.11 Storm Sewer Pipe Removal& Disposal 1,300 LFt. 10.00 11,300.00
1.12 Bituminous Pavement Removal &Disposal 100 CuYd 50.00 5,000.00
Category Subtotal 282,450.00
SIDEWALK VAULT ABANDONMENT
2.01 Reinforced Masonry Block Wall 1,040 SqFt 6.00 0.00
2.02 Select Granular Fill for Vaults 380 CuYd 30.00 0.00
2.03 Relocate Gas Service&Meter(allow) 1 Each 1,500.00 0.00
2.04 Relocate Telephone Service 1 Each 2,000.00 0.00
2.05 Relocate Electric Service& Panels(allow) 1 Each 2,500.00 0.00
2.06 Relocate Water Service&Meter(allow) 1 Each 2,500.00 0.00
2.07 Relocate Air Handling Sys. in Vault(allow) 1 Each 10,000.00 0.00
2.08 Abandon Vault Utilities 2 Each 500.00 0.00
Category Subtotal 0.00
PAVEMENT
3.01 B-6.18 Curb and Gutter 1,700 L.Ft. 11.00 18,700.00
3.02 _ 4"Aggregate Leveling Course-Roadway 3,700 SqYd 3.00 11,100.00
3.03 8.5"BAM Base Course • 3,400 SqYd 12.00 40,800.00
3.04 2" Bit. Conc. Class I Binder w/Prime Coat 3,400 SqYd 3.00 10,200.00
3.05 1.5"Bit. Conc. Class I Surface w/Tack Coat 4,735 SqYd 2.50 11,837.00
3.06 Concrete Sidewalk 100 SqFt 2.50 250.00
3.07 4'Temporary Plywood Sidewalk 7,000 SqFt 3.50 24,500.00
3.08 6"Agg. Leveling Course-Unit Pavers 1,600 SqYd 4.50 7,200.00
3.09 6"Concrete Base Course-Unit Pavers 1,600 SqYd 15.00 24,000.00
3.10 10"Agg. Leveling Course 1,600 SqYd 7.20 11,520.00
3.11 4"Scored Concrete Walk 2,000 SqYd 30.00 60,000.00
Category Subtotal 220,107.00
Page 1 •
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FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-MEDIUM QUALITY
ti
Bid Item Description of Item Estimated Pay Unit Cost ltrem Cost
Quantity Unit (Dollars) (Dollars)
WATER MAIN DISTRIBUTION SYSTEM
4.01 Remove and Replace Water Hydrant 4 Each 2,000.00 8,000.00
4.02 Valve Vault Adjustments 15 Each 250.00 3,750.00
4.03 . 6"Ductile Iron Water Fire Hydrant Extension 80 LFt 25.00 2,000.00
4.04 Select Granular Trench Backfill 500 CuYd 25.00 12,500.00
4.05 4" Ductile Iron Water Service 760 LFt 22.00 16,720.00
4.06 4"Valve &Valve Box&Pressure Tap 23 Each 2,500.00 57,500.00
Category Subtotal 100,470.00
STORM SEWER SYSTEM
5.01 12" Reinforced Concrete Pipe Installation 370 LFt 18.00 6,660.00
5.02 15" Reinforced Concrete Pipe Installation 230 LFt • 20.00 4,600.00
5.03 21" Reinforced Concrete Pipe Installation 450 LFt 25.00 11,250.00
5.04 24" Reinforced Concrete Pipe Installation 300 Lft 30.00 9,000.00
5.05 4'Dia. Manhole w/Frame &Grate 7 Each 1,300.00 9,100.00
5.06 4'Diam. Catch Basin w/Frame&Grate 11 Each 1,300.00 14,300.00
5.07 Structure Frame Adjustments 15 Each 250.00 3,750.00
5.08 Partial Manhole Reconstruction 4 Each 1,500.00 6,000.00
5.09 Internal Television Inspection 1 LSum 2,000.00 2,000.00 .
5.10 Select Granular Backfill 1400 CuYd 27.00 37,800.00
Category Subtotal 104,460.00
SANITARY SEWER SYSTEM
6.01 Manhole Frame Adjustments 8 Each 250.00 2,000.00
6.02 Partial Manhole Reconstruction 3 Each 1,500.00 4,500.00
6.03 Internal Television Inspection 1 LSum 2,500.00 2,500.00
Category Subtotal 9,000.00
PEDESTRIAN LIGHTING
8.01 Twin Acorns on 12'Pole-70W 50 Each 4,500.00 225,000.00
8.02 Single Acorn on 12' Pole- 100W 4 Each 3,500.00 14,000.00
8.03 Single Acorn-Special Mount- 100W • 0 Each 2,000.00 0.00
8.04 Quad Acorns-Special-70W 0 Each 2,500.00 0.00
8.05 Bollard Lighting- 50W • •
50 Each 1,000.00 0.00
Category Subtotal 239,000.00
SPECIAL LIGHTING
9.01 Fountain Lighting 1 Each 15,000.00 15,000.00
9.02 Kiosk Lighting 0 Each 5,000.00 0.00
9.03 Stage Up- Lighting 1 Each 10,000.00 0.00
9.04 Roadway Up- Lighting 1 Each 15,000.00 0.00
Page 2
FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-MEDIUM QUALITY
Bid Item Description of Item Estimated Pay Unit Cost Item Cost
Quantity Unit (Dollars) (Dollars)
9.05 Control Panel (Lights, Fountain, etc.) 1 Each 25,000.00 25,000.00
Category Subtotal 40,000.00
•
ELECTRICAL WIRING
10.01 Conduit&Cable in Trench (6c) 1500 Lin. Ft. 20.00 30,000.00
10.02 Conduit&Cable in Trench (12c) 250 Lin. Ft. 30.00 7,500.00
10.03 Conduit& Cable in Trench (12s) 500 Lin. Ft. 40.00 20,000.00
10.04 Conduit&Cable in Trench (12s+) 500 Lin. Ft. 50.00 25,000.00
Category Subtotal 82,500.00
WALKWAY PAVING
11.01 Special Paving 17500 SF 15.00 262,500.00
Category Subtotal 262,500.00
STREETSCAPE FURNISHINGS
12.01 Tree Grates/Pits 19 Each 4,800.00 91,200.00
12.02 Benches 15 Each 1,700.00 25,500.00
12.03 Waste Receptacles 10 Each 1,300.00 13,000.00
12.04 Bollards 60 Each 1,000.00 60,000.00
12.05 Regulatory Signage 40 Each 250.00 10,000.00
12.06 Bicycle Racks 3 Each 2,000.00 6,0.00.00
12.07 Newspaper Rack Enclosures 0 Each 10,000.00 0.00
Category Subtotal 205,700.00
STREETSCAPE AMENITIES
13.01 Fountain/Clock Tower Footing 1 , LS $175,000 100,000.00
13.02 DuPage Fountain 0 LS $90,000 0.00
13.03 Stage in Water Feature 0 LS $100,000 0.00
13.04 Tensile Covering 1 LS $100,000 0.00
13.05 Kiosks with Sculpture 3 Each $25,000 75,000.00
13.06 Light Bases at Entries(footing only) 2 Each $2,000 4,000.00
13.07 Banners 60 Each $500 30,000.00
13.08 Artwork 1 Allow $100,000 50,000.00
Category Subtotal 259,000.00
PLANT MATERIAL - •
14.01 5"- Street Trees 19 Each 1,000.00 19,000.00
14.02 Seasonal Flowers/Fountain LS 2,500.00
14.03 Irrigation 19 Each 1,600.00 30,400.00
Category Subtotal 51,900.00
Page 3
' ,y
•
FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-MEDIUM QUALITY
Bid Item Description of Item Estimated Pay Unit Cost Item Cost
Quantity Unit (Dollars) (Dollars)
15.01 Crane operation to plant trees if necessary 19 Each 250.00 0.00
Category Subtotal 0.00
TRAFFIC CONTROL
17.01 Intersection Signalization LS 25,000.00
17.02 Traffic Control Signals LS • 5,000.00
Category Subtotal 30,000.00
Total Phase I Estimate Total $1,887,087
Contingency $188,708
Total Project Estimate including Contingency $2,075,795
•
•
Page 4
•
n
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r
Agenda Item No. --q)
o•P!!D F l 1
June 2, 1994
TO: Mayor and Members of the City Council
FROM: Richard B. Helwig, City Manager
SUBJECT: Elgin Riverboat Agreement - Third Amendment
PURPOSE
The purpose of this memorandum is to forward to the Mayor and
City Council an amendment to the Development Agreement with
Elgin Riverboat Resort.
BACKGROUND
elk At a special meeting on May 4, the City Council reviewed
design alternatives for the reopening of Fountain Square
Plaza and selected Option 2 . The City Council also discussed
and approved the attached nine-point program to accomplish.
the mall reopening in 1994 and to resolve other issues regard-
ing the Riverboat Development Agreement. Staff was directed
to incorporate the above understandings into an agreement
with the riverboat developer.
Attached is a summary prepared by the Corporation Counsel of
the provisions included in what is proposed to be the third
amendment to the Development Agreement. The substantive
provisions of the amendment include: The reopening of Foun-
tain Square Plaza with the developer constructing and financ-
ing the improvements (items 1-9 and 28) ; the construction of
a public parking lot by the developer on the East Parcel
north of Lake Street between Grove Avenue and Wellington
(item 10) ; the restoration and resurfacing of Lake Street by
the developer (item 14) ; landscaping improvements to the West
Parcel, north of the pavilion between Grove Avenue and the
river and its maintenance for five years (item 15 and 17) ;
options for the developer to acquire the East and West Par-
cels (items 11, 12, 13, 16 and 18) ; a $50,000 payment to the
City in lieu of rent (item 20) ; flexibility in hours of opera-
tion for the riverboat (item 21) ; a payment of $350,000 for
five years to the City for law enforcement purposes (item
23) ; increasin the total investment cost limit from $40
million to $7'O'million (item 26) , and changing the definition
of "net after tax cash flow" to reflect the parties ' original
understandings (item 27) .
The agreement also acknowledges that a future amendment will
be required to the lease agreement involving non-substantive
editorial changes (item 30) . These changes were postponed at
this time as not to unduly delay the reopening of the mall .
As of this writing, the 17-page amendment is undergoing final
review by Ery Jentsch and the Developer's attorney. As soon
as the document is finalized, it will be furnished to the
City Council .
FINANCIAL IMPACT
The direct financial impacts of the third amendment are out-
lined in items 1, 8, 20, 23, 26 and 28.
LEGAL IMPACT
The third amendment is being reviewed by the Legal Department.
RECOMMENDATION
The recommendation is for the City Council to approve the
third amendment to the Development Agreement and authorize
its execution by the City Manager.
Respectfully submitted,
Richard B. Helwig
City Manager
amp
r
• .
. •
flak
SUMMARY OF THIRD AMENDMENT TO DEVELOPMENT AGREEMENT
AND GROUND LEASE FOR ELGIN RIVERBOAT
1. City to cause design of South Grove reopening
improvements. ( 1.01)
2. Developer to advise and consult regarding design. ( 1.02)
3. Project divided into three phases. ( 1.02)
i) Demolition (removal of pavement and landscaping;
ii) Street construction;
iii) Final completion.
4. Developer to construct street with contracts approved by
City. (1.03(B) )
5. Contracts for demolition and construction may be let, not
to exceed $2,400,000. ( 1.03 (C) )
eft6. No contract for finish work shall be let which will
increase total project cost to exceed $2,400,000; if
necessary redesign or deletion of features as determined
by City shall be employed to reduce total cost of project
to $2,400,000 unless city council authorizes expenditure
of additional funds. (1.03 (C) )
7. City to approve all disbursements of payments for work
done. ( 1.03 (D) )
8. Developer to pay costs and expenses not to exceed
$2,400,000; City liable for any additional costs. ( 1.06
(A) )
9. After December 31, 1994, if project not completed,
Developer to deposit any remaining funds in escrow for
payment of project. Any funds remaining after completion
of project to be returned to Developer. ( 1.06 (B) )
10. Developer to construct public parking lot on East Parcel
and to lease same for five years for rental of $1.00 per
annum; no charge for use of parking lot by public; City
to indemnify Developer for removal of contaminated soil.
(2.02(a) and (f) )
11. During term of lease of East Parcel, Developer may
propose development; City may not develop without
Developer's approval. (202(g) )
.Summary of Third Amendment to Development Agreement
and Ground Lease for Elgin Riverboat
Page 2
12 . During term of lease Developer may purchase East and West
Parcel with property reverting to City if 150 room hotel
construction not commenced within three years and
completed within five years. (2 .02(h) )
13. Developer has right of first refusal after five years to
purchase East Parcel for hotel construction with
reversion to City. (2 .02(1) )
14 . Developer to restore Lake Street from South Grove to
Wellington. (2 .03)
15. West Parcel to be restored after completion of
construction for purpose of passive recreation; City to
review plans and specifications and hold Developer
harmless for cost of removing contaminated soil . (3. 02
(A) . (B) . (C) )
16 . No development on West Parcel for five years without
Developer's consent. (3.03 (A) )
17. Developer to maintain West Parcel for five years. (3.03
ri (B) )
18. Developer has same right to purchase West Parcel for
hotel on same terms and conditions as East Parcel. (3 .03
(C) , (D) )
19. Parties agree that:
A. Plans and specifications for riverboat and pavilion
furnished. (4 .02(a) ( 1) )
B. Operational plans approved. (402(a) (2) )
C. PUD approved. (402(a) (3) )
D. Option payments made. (4 .02(a) (4) )
E. Performance bond posted. (4 .02(a) (5) )
F. Joint obligations of City and Developer completed.
Art. VII of Development Agreement. (4 .02(a) (6) )
G. Developer has not received temporary or permanent
license. (4 .02(a) (7) )
H. Approval by City of Elgin Riverboat Resort as
r Developer. (4 .02(a) (8) )
• Summary of Third Amendment to Development Agreement
and Ground Lease for Elgin Riverboat
Page 3
20. Developer to pay additional $50,000 upon execution of
third amendment. (4.02(b) )
21. Hours of operation at Developer's discretion but required
to close for two hours in each 24 hour period. (4.02(c) )
22. Developer to provide merchant's sales tax numbers instead
of sales tax return. (4 .02(d) )
23. Developer to pay $350,000 per year for five years to
defray law enforcement costs. (4 .02(e) )
24 . Shuttle bus may be operated by Developer, independent
contractor or Pace; charges and hours in Developer's
discretion. (4 .02 (f) )
25. Deletion of opening date. (4 .02(g) )
26. Total investment cost increased to $75,000,000. (4 .02(i) )
27. Definition of "net after tax cash flow" amended to impute
payment of income taxes, federal and state. (4 . 02(j ) )
28. Rent credit for South Grove costs. (4. 02(k) )
29. Easement for pedestrian bridge over South Grove. (4 .02(1) )
30. Agreement to make non-substantive editorial changes in
lease. (4 .02(m) )
31. Developer may rely on approvals by city manager, unless
specific approval by city council required. (5 . 01)
• . . y
SUMMARY: A WAY TO REOPEN THE MALL IN 1994
r"` AND RESOLVE OTHER ISSUES REGARDING
RIVERBOAT DEVELOPMENT AGREEMENT
1. Reopening the Mall in 1994 :
a) City has budgeted $275,000 in 1994 for • the
design and engineering costs of this project.
City agrees to pay for the design, engineer-
ing, and, if necessary, any redesign of this
project.
b) Elgin Riverboat Resort will construct the
road, per whatever specifications the City
Council adopts at their May 4 work session.
Using Option 2 (medium quality) as an example,
Elgin Riverboat Resort will build the road at
a cost not to exceed $2 . 1 million for construc-
tion and $250,000 for inspection, with a total
cost not to exceed $2 .35 million. The actual
final cost could be less.
c) Elgin Riverboat Resort will recover the actual
road cost (not to exceed $2 . 35 million using
the above Option 2 example) as a rent credit
over a three-year period. The rent credit
shall begin when the Elgin Riverboat Resort
begins to pay the percentage rent to the City
(i .e. probably year four but could be soon-
er) . The formula for cost recovery shall be
monthly, i.e. 1/36th ofthe total cost of the
road not to exceed 50% of the percentage rent
in any given month. In essence, this repay-
ment is a non-cash plan for the City of Elgin
deferred for probably three years after the
road is completed. Otherwise, the road, if
done by the City of Elgin, would not be com-
pleted until Fall, 1995 and would have to be
financed by the City of Elgin.
2. The investment cap shall be raised from $40 million to
$75 million.
3. The cruise schedule will provide that Elgin Riverboat
Resort will close down for a two-hour period in any
24-hour period. They can select the two-hour period.
4 . Parking Lot (East of South Grove, North of Parking Ga-
rage) and Open Space (West of South Grove, North of
Pavilion) :
a) Elgin Riverboat Resort will construct a public
parking lot consistent with City standards on
the area bordered by Lake, Grove, Prairie and
Wellington. Elgin Riverboat Resort will be
indemnified for costs and liabilities associat-
ed with contaminated soils or other environmen-
• Summary
June 2, 1994
Page 2
tal issues. Elgin Riverboat Resort will re-
store Lake Street from South Grove up to Wel-
lington in accordance with the standards used
for South Grove (i.e. new curb and sidewalk,
asphalt resurfacing, lighting and any base
failure or any other damage directly related
to construction activities) .
b) Elgin Riverboat Resort will restore the bike
path in the area bordered by Lake, Grove,
Prairie and the river in accordance with the
landscaping to be installed behind the pavil-
ion along the bike path. The remainder of the
lot will become an open planted grass field.
It is contemplated that this area will be used
for compensatory storage for the construction
outlined in Item 4a. Elgin Riverboat Resort
will be indemnified for costs and liabilities
associated with contaminated soils or other
environmental issues.
c) During the five-year period commencing with
the opening of the project, Elgin Riverboat
Resort shall have the right to petition the
City to approve a development plan for both
the parking lot and the park. The City is not
obligated to approve the plan. In addition,
Elgin Riverboat Resort shall have the right to
purchase the property as outlined in Item 4d
below. No development will be allowed in the
areas described in Items 4a and 4b above,
without the mutual consent of the City of
Elgin and the Elgin Riverboat Resort.
d) In addition to the initial five-year period
specified above, for a second five-year peri-
od, Elgin Riverboat Resort shall have the
right to purchase both the parking lot and the
park for its fair market value. This right
can only be exercised if Elgin Riverboat Re-
sort agrees to build a hotel with a minimum of
150 rooms. The hotel shall be constructed to
a high quality standard.
5. The trolley on wheels system can be operated by Elgin
Riverboat Resort, an independent contractor or the PACE
system, as long as it follows a route through downtown
and each of the METRA stations. All customers can be
charged for this service.
6 . Opening Day: All parties shall use their best efforts
to open the pavilion and boat prior to October 15, 1994 .
7 . The City of Elgin approves the riverboat as currently
configured at 100' by 400 ' at the water line.
Summary
June 2, 1994 '
Page 3
8. In order to provide security for the riverboat site as
well as neighborhoods near the Center City, Elgin River-
boat Resort has agreed to contribute to the City
$350,000 a year for five years for law enforcement pur-
poses . The monthly payments from the Elgin Riverboat
Resort will begin on October 1, 1994 . The funds. will be
used for community policing programs, including addition-
al resident officers.
9 . In recognition of an opening date beyond the expiration
date of option, Elgin Riverboat Resort will pay an addi-
tional $50, 000 to the City on approval of this modifica-
tion to the Development Agreement by the City Council.
Respectfully submitted,
Richard B. Helwig
City Manager
amp
c: Loni Mecum
Robert O. Malm
Erwin W. Jentsch