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95-76 -i { Resolution No. 95-76 RESOLUTION - a AUTHORIZING EXECUTION OF AN AGREEMENT WITH ELGIN RIVERBOAT RESORT FOR SHIPYARD RESTORATION 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 execute an agreement on behalf of the City of Elgin with Elgin Riverboat Resort for the removal of the stockpile of soil at 206 South Grove Avenue and for the restoration of a portion of the shipyard site, a copy of which is attached hereto and made a part hereof by reference. s/ George VanDeVoorde George VanDeVoorde, Mayor Presented: March 22, 1995 Adopted: March 22, 1995 Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk �. '. .4 AGREEMENT THIS AGREEMENT is made and entered into as of March 22, 1994 by and between the CITY OF ELGIN, an municipal corporation (hereinafter referred to as the "City") and ELGIN RIVERBOAT RESORT, an Illinois partnership (hereinafter referred to as the "Developer") . R E C I T A L S A. City and Developer have previously 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 (the "Leased Premises") . Said riverboat gaining facility has now been established. The Development Agreement was subsequently amended by (i) a certain Amendment to Development Agreement dated as of June 23, 1993, (ii) a certain Second Amendment to Development Agreement and Ground Lease_ Agreement dated as of January 20, 1994, and (iii) a certain Third Amendment to Development Agreement and Ground Lease dated as of June 9, 1994 (the "Third Amendment") . B. Pursuant to the Third Amendment, Developer and the City have reached certain agreements and understandings with respect to the "West Parcel" and the "East Parcel" as such terms are therein defined. Those agreements and understandings include, inter alia, (i) Developer's agreement to restore the West Parcel and the City's commitment to grant Developer by written instrument running with the West Parcel an option to purchase the West Parcel on the terms and conditions specified in said Third Amendment, (ii) an agreement between the City and Developer to improve the East Parcel as a public parking lot and to lease the same from the City to Developer for said purpose, and (iii) an agreement by the City to grant Developer certain rights to purchase the East Parcel as more fully set forth in said Third Amendment. C. Although the necessary lease and option grant documentation with respect to the West Parcel and East Parcel as contemplated by the Third Amendment have not yet been prepared, the City and Developer now desire to proceed with respect to their respective obligations with respect to the restoration and improvement of the West Parcel as provided under Section 3.02 of the Third Amendment with certain alterations thereto as hereinafter specified. NOW, THEREFORE, in consideration of the foregoing Recitals which are incorporated herein and made a part hereof and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both parties, the parties agree as follows: 1. Words and phrases not defined herein shall have the meanings ascribed to them in the Third Amendment. 2. Developer shall cause the current stockpile of soil located on the West Parcel (also known as 206 South Grove Avenue, Elgin, Illinois) to be transported to and disposed of at a licensed landfill in the most cost effective manner as is reasonably practicable with due regard to all governing laws, rules and regulations applicable thereto. All costs associated with the excavation, transportation and disposal of the soil including, without limitation , any related expenses for soil testing and the preparation and filing of reports with appropriate governmental agencies shall be shared between the City and Developer as follows: City shall bear two-thirds of such costs and Developer shall bear one-third of such costs. Developer shall promptly cause such work to commence within such time frame as is reasonably practicable and shall diligently cause the same to be completed within a reasonable period of time. 3. With respect to the transport and disposal of said soil, City and Developer agree for the purposes of all applicable environmental laws, rules and regulations that the City shall be deemed the "generator" with respect to two-thirds thereof and the Developer shall be deemed the "generator" with respect to the remaining one-third thereof. The parties agree to complete and execute any and all manifests and other documentation legally required or reasonably necessary with respect to the transport and disposal of such soil reflecting the foregoing allocation of "generator" responsibility with respect thereto. Additionally, the parties have agreed to restore the portion of the West Parcel which is west of Grove Avenue to its original use and approximate grade. In order to do so, the parties acknowledge and agree that clean fill material and topsoil must be brought to the site. Such fill material and topsoil shall be suitable for growing grass upon the surface thereof when the work is completed. Developer shall promptly cause such work to commence and shall diligently cause the same to be completed with all costs incurred in connection therewith to be equally shared by the City and Developer. 4. City warrants and represents to Developer that City has approved the budget attached hereto as Exhibit A for the performance of the work contemplated by paragraphs 2 and 3 hereof (the "Budget") and is authorized and empowered to make all payments due in accordance with paragraphs 2 and 3 hereof on demand provided that the total of such costs to be paid by City and Developer do not exceed 110% of the total cost allowance reflected in the Budget (the City's share of such costs being herein referred to as the "Pre-Approved Costs") . The City shall obtain promptly such further approvals and authorizations as may be necessary for it to make full payment of all amounts due Developer in accordance with paragraphs 2 and 3 hereof to the extent the same exceed the Pre- Approved Costs (such excess amounts being referred to herein as the -2- • "Cost-Overrun Payments") . Any and all payment obligations of the City in accordance with the foregoing provisions of Paragraphs 2 and 3 hereof shall be due and payable to Developer immediately on demand by Developer and shall bear interest until paid from the date of demand for payment at nine percent (9%) per annum if not paid (a) within five (5) business days of written demand for payment with respect to the Pre-Approved Costs, and (b) within thirty (30) days of written demand for payment with respect to the Cost-Overrun Payments. Additionally, the City shall pay all attorneys' fees and costs incurred by Developer in connection with Developer's efforts to collect such payments if the same are not paid within the time periods established in the immediately preceding sentence hereof and Developer is the prevailing party in any litigation filed in connection therewith. 5. Except as expressly provided above, this Agreement shall not be deemed to amend or modify the terms and provisions of the Third Amendment. In that regard, the City and Developer agree to proceed promptly with (i) the finalization of an Amended and Restated Lease Agreement with respect to the Leased Premises, and (ii) the preparation and finalization of separate lease and option agreements with respect to the West Parcel and East Parcel; all as contemplated by the Third Amendment. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. CITY OF ELGIN, ELGIN RIVERBOAT RESORT, a municipal corporation an Illinois partnership // By RIG, L.P. By: r/G �,� ���r�2,, one of its general partners Mayor By MCA Corporation, ATTEST: its ge -r al •artner By: k �-�,u By: lL City 1. c. -rd . Schulze L ice Pr=b�dent -3- • -.* EXHIBIT A BUDGET Removal, transport and disposal of topsoil together with associated costs $332,800 Restoration of approximate grade with clean fill material and topsoil 0 120,000 TOTAL $452,800 • • c:i80821111942W 012.B 3/21/95 • • ion Agenda Item No. March 20, 1995 TO: Mayor and Members of the City Council FROM: Richard B. Helwig, City Manager SUBJECT: Remediation Agreement for the West Parcel of the Riverboat Shipyard PURPOSE The purpose of this memorandum is to present to the City Council an agreement dealing with the sharing of costs associ- ated with the removal of contaminated soil and the replace- ment of such soil with clean fill material at the former riverboat shipyard site. BACKGROUND The City of Elgin granted a construction easement to Elgin Riverboat Resort on City property bounded by Lake Street, Wellington Avenue, Prairie Street and the Kane County Forest Preserve property for the purpose of providing space for the construction of the riverboat. To prepare the site for the construction of the ship, soil was removed from City-owned property as well as the Forest Preserve property and stock- piled at 206 South Grove Avenue. It has been determined that contaminants are present in the stockpile and the most efficient means of remediating the site would be to transfer the estimated 12,800 cubic yards of soil to a licensed land fill . Clean fill material would be brought to the site to return the area to its original grades . The parties have agreed to share the remediation costs for the clean-up: for soil removal, two-thirds City and one-third Elgin Riverboat Resort and for fill material, splitting the cost evenly. Removal of the contaminated soil and restoration with clean fill will begin when clearance to transport material to a licensed landfill is received. Remediation/Riverboat Shipyard March 20., 1995 �• Page 2 COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. FINANCIAL IMPACT The estimated cost of the City' s share of the soil removal is $222,000 and the estimated cost to the City for fill material is $60,000. The City' s share is to be funded as outlined in the attached memorandum. LEGAL IMPACT None. RECOMMENDATION Authorize the City Manager to enter into an agreement with Elgin Riverboat Resort, Inc. for the remediation and restora- tion of the west parcel of the former shipyard construction site. Respectfully submitted, Raymond H. Moller, Director Business Services and Properties • Richard B. Helwi�ig I City Manager amp r . • 151' Memorandum , , ‘ • March 10, 1995 TO: Mayor and Members of the City Council FROM: Richard B. Helwig, City Manager SUBJECT: Update on Discussion with Elgin Riverboat Resort The purpose of this memorandum is to provide the City Council with an update on discussions with Elgin Riverboat Resort regarding the following: ( 1) hotel development; (2) park development; and (3) payment responsibilities for outstanding environmental clean-up. Attendees at the meeting held yester- day were Mayor VanDeVoorde, Council Member Yearman, Bob Maim, Ery Jentsch, Ray Moller Jim Nowicki and myself from the City of Elgin, and Dan Azark, Peter Simon and their legal counsel, Irwin Gzesh, representing Elgin Riverboat Resort. Status of Hotel Development We were informed yesterday by Peter Simon that the develop- ment partners now think it is prudent to wait on making a final decision about hotel development in Elgin until the Illinois State Legislature completes its session mid-year. They are very concerned about increased competition, higher taxes and such off-the-wall proposals as all licenses put to bid every three years . They wish to revisit the hotel devel- opment discussion after there is a greater certainty about the political environment in Illinois. In the meantime, they will be surveying customers as to their hotel and length of stay preferences associated with the Grand Victoria. Elgin Riverboat Resort is now prepared to proceed with meet- ing their surface parking lot commitment east of South Grove Avenue between Prairie and Lake Streets . A consensus was reached among City of Elgin representatives at yesterday's meeting that surface parking should be developed over approxi- mately two-thirds of the area commencing south of Prairie Street. Approximately 340-350 parking spaces would be devel- oped in this area with appropriate landscaping and lighting. The remaining one-third of this block, still being held for an eventual hotel development, would be landscaped as grass and the City could, with 90 days ' notice, require the develop- er to convert the grassy area to surface parking space if the • Update on Discussion with Elgin Riverboat Resort March 10, 1995 oek Page 2 City decides it is needed. A total of 517 parking spaces could ultimately cover the entire block, if so desired. Wellington Avenue between Prairie and Lake Streets would remain open until a hotel development would proceed. In summary, the recommendation that will be presented to the City Council at the March 22, 1995 meeting will be to develop the area east of South Grove Avenue between Prairie and Lake Streets with approximately 340-350 surface parking spaces located south of Prairie. The remaining one-third of the site adjacent to Lake Street would be grass . Park Development Elgin Riverboat Resort is prepared to commence immediately with open space restoration west of South Grove Avenue be- tween Prairie and Lake Streets . They will complete the bicy- cle path and also seek to include with a portion of funds designated to go to Kane County later this year from the development, similar historic lighting along the bike path and also .a handicapped fishing area along the river. In order to begin the construction of the bike path, it is neces- sary to resolve several outstanding environmental clean-up issues identified in the next section. Outstanding Environmental Clean-up Issues The City of Elgin representatives at yesterday's meeting reached a consensus that City of Elgin authorization for payment of the following items should be recommended to the City Council at the March 22, 1995 meeting: $272,000 - Pavilion site soil remediation completed by Elgin Riverboat Resort (existing contractual obligation of the City of Elgin) . We will seek LUST Fund reimbursement for $172,446 of this amount. $ 8,349 - City reimbursement for groundwater remediation costs incurred by Elgin Riverboat Resort. $222,000 * - City portion of removal cost of soil stockpile on former ship yard site (i .e. , "Mt. Elgin" ) . $ 60,000 * - City portion of new clean fill and grading of open space west of South Grove between Prairie and Lake Streets. $562,349 - Total eft * Approximations based on Ries Environmental consultations. The first item, amounting to $272,000, is a contractual obli- gation. This obligation was incurred when the footings were . r • Update on Discussion with Elgin Riverboat Resort March 10, 1995 ✓ Page 3 • installed for the pavilion. The second item is self-explana- tory. The third item, amounting to $222,000, represents the suggested City's two-thirds portion of removing the soil stockpile known as "Mt. Elgin" . The other one-third of the removal cost is being borne by the developer because, during the construction of the ship yard, soils were placed on City property from the Kane County bike path for which the develop- ers have assumed responsibility. The fourth item, amounting to $60,000, is the City's suggest- ed 50 percent portion of new clean fill and grading of open space for the park land west of South Grove Avenue between Prairie and Lake Streets . It was the consensus of the City representatives that, because the contaminated soil could not be used to restore the ship yard site, the City has some responsibility in paying for the clean fill . To meet the above recommended payment obligations and expe- dite improvements as the weather breaks (i .e. , completion of the surface parking and green space east of South Grove along with completion of the bike path and green space west of South Grove) , we recommend the total of $562,349 .00 be funded by the General Capital Improvement Fund (Fund #385) . fOk Given the payment obligations described above, it is prudent that the City redeem the Area II Special Assessment Capital Improvement note (see attached voucher) rather than hold it as a long-term investment. The City of Elgin has exercised this early redemption option on other special assessment projects . The value of the voucher is $681,816 .49, plus accrued interest of $30,989 . 97, for a total of $712,806 .46 . After paying the $562, 349 .00 payment obligation, the remain- ing voucher proceeds ($150,457 .46) will be added to the Gener- al Capital Improvement Funds (Fund #385) unencumbered cash balance. Respectfully submitted, Richard B. Helwig City Manager amp c: Loni Mecum Robert 0. Malm Erwin W. Jentsch Raymond H. Moller James Nowicki Martin Gregory