99-0908 GVC Ground Lease Amendment IC' •
FIRST AMENDMENT TO AMENDED AND RESTATED
GROUND LEASE AGREEMENT
THIS AGREEMENT is made and en ered into this 8th
day of September , 1999, by and between the CITY OF
ELGIN, Illinois, an Illinois mu icipal corporation
(hereinafter referred to as the "La dlord" ) , and ELGIN
RIVERBOAT RESORT, an Illinois joint vesture consisting of
Nevada Landing Partnership and RBG, L. P. , as its joint venture
partners (hereinafter referred to as the " tenant" ) ;
WHEREAS, Landlord and Tenant ha e heretofore entered
into a certain Amended and Restated Ground Lease Agreement
dated December 2 , 1998 (hereinafter referred to as the
"Amended and Restated Ground Lease Agreemelt" ) ; and
WHEREAS, Landlord and Tenant ha e determined that it
is to their mutual benefit to amend cert-in provisions within
said Amended and Restated Ground Lease Asreement relating to
the hours of operation of the subjecu facility and the
operation of a shuttle bus system.
NOW, THEREFORE, for and in consideration of the
mutual promises and undertakings contain:d herein, and other
good and valuable consideration, the rec ipt and sufficiency
of which is hereby acknowledged, the paries hereto agree as
follows :
1 . That Section 3B (ii) of the Amended and Restated
Ground Lease Agreement entitled "Riverbo-t - Closure" be and
is hereby amended to read as follows :
•
" (ii) Riverboat Operations . Tenant shall have
the right to operate the Riverboat continuously
through the entirety of each day. "
2 . That Section 3C of the Amended and Restated
Ground Lease Agreement is hereby amended to read as follows :
"In conjunction with its use of the Demised
Premises, a shuttle bus system similar to a trolley
on wheels shall be established and operated either
by Tenant, an independent contractor selected and
retained by Tenant, or by the PACE system if
arrangements suitable to Tenant can be made with
Pace . Any such shuttle bus system shall be
conducted in accordance with all requirements of
applicable law. "
3 . That except as modified hereby the Amended and
Restated Ground Lease Agreement shall remain in full force and
effect .
IN WITNESS WHEREOF, the parties have caused this
agreement to be executed on the date and year first written
above .
CITY OF ELGIN, a municipal ELGIN RIVERBOAT RESORT, an
corporation Illinois partnership
BY � � . - By RBG, L. P. ,
Mayor One of its general partners
By HCCA i, fpor tion,
Attest : Its ga -ra partner
01
Ei):14-- �'i1e.ct L By ►♦
City Clerk Ric ';rd L. chulze
RAGRE/RIVERBT.A#1
-2-
OF r/.
f Aid!•
City of Elgin Agenda Item No.
°RATEDw'
August 10 , 1999
TO: Mayor and Members of the City Council
FROM: Joyce A. Parker, City Manager
SUBJECT: Requested Changes by Elgin Riverooat Resort
Regarding Operations at the Gran* Victoria Casino
PURPOSE
To submit for City Council consideration . request from Elgin
Riverboat Resort regarding proposed chang-s in operations at
the Grand Victoria Casino.
BACKGROUND
Representatives of the Elgin Riverboat Resort have been
discussing with city staff several poss 'ble changes in the
operations of the Grand Victoria Casino . Attached is a
recent communication received from Mr. Ricard Schulze regard-
ing various proposals for changes to the operations of the
Grand Victoria Casino.
Several of the proposed changes would reouire action by the
City Council to amend the agreements bet een Elgin Riverboat
Resort and the City. These changes are as follows :
1 . Elgin Riverboat Resort is requesting that it be permit-
ted to operate 24 hours versus the current 22 hours a
day. The Amended and Restated Gro nd Lease Agreement
between the City of Elgin and Elgin Riverboat Resort of
December 2 , 1998 , currently provides under
Section 3B (ii) that the riverboat operations shall be
closed for at least two consecutive lours in any 24 hour
period. Section 3B (ii) would the. efore need to be
amended to allow for the 24 hour oper_tions .
2 . Elgin Riverboat Resort is requesting a change to the
current requirements regarding the operation of a shut-
tle bus system. The Amended and R_stated Ground Lease
Agreement between the City and Elgin Riverboat Resort
currently provides under Section 3C hat Elgin Riverboat
Resort operate such a shuttle bus -ystem with a route
through downtown connecting each of the Metra sta-
tions. Section 3C would need to b- revised to delete
the requirement for a specified rout- and that the Metra
stations be required stops for such - system.
Grand Victoria Casino
August 10 , 1999
' Pdge 2
3 . Elgin Riverboat Resort is suggestins that the current
land options be terminated at this time and in lieu
thereof (1) Elgin Riverboat Resort .e permitted to use
the east or west lots for promotional events prior to
redevelopment thereof and (2) Elgin riverboat Resort be
given the "right of first offer" on the east lot if it
should be sold or redeveloped.
The land options being referred to relate to the west
and east parcels north of the main leased premises . A
map depicting the main leased premi .es leased to Elgin
Riverboat Resort pursuant to the A ended and Restated
Ground Lease and the west and east parcels is- attached
hereto.
The City and Elgin Riverboat Resort have entered into a
Ground Lease and Option Agreement for the west and east
parcels . The terms of the Groun• Lease and Option
Agreement with respect to the east .nd west parcels may
be summarized as follows :
A. The City will lease the east pa cel to Elgin River-
boat Resort for a period of f 've years commencing
as of January 1, 1995 and ending on December 31,
1999 . Annual rent is $1 . 00 per ' ear.
B. Section 25 of the agreement provides that during
the five year period ending December 31, 1999,
Elgin Riverboat Resort shall have the right to
submit to the City a plan for edevelopment of the
east parcel together with the edevelopment of the
west parcel and, if accepted, .he City shall agree
to sell both the east and we..t parcels to Elgin
Riverboat Resort at a price o be agreed upon.
While the City has no obliga• ion to approve any
such redevelopment proposal -ubmitted by Elgin
Riverboat Resort, the City shall consider in good
faith all such proposals actually submitted. The
City further agrees that it ill not develop or
approve any development of the east parcel , other
than for public parking p rposes, prior to
December 31, 1999, without the prior written con-
sent of Elgin Riverboat Resort .
C. Section 32 provides that no •evelopment will be
permitted on the west parcel and that the west
parcel shall remain in its state as restored and
improved by Elgin Riverboat Resort until
December 31, 1999, unless th= City obtains the
prior written consent of Elgin Riverboat Resort .
Elgin Riverboat Resort must maintain the west
parcel in a neat and orderly condition at its sole
cost and expense through Decemb:r 31 , 1999 .
• Grand Victoria Casino
August 10, 1999
Page 3
em. D. Sections 33 and 34 provide Elg ' n Riverboat Resort
the option to purchase the eat and west parcels
through December 31, 1999 . To exercise its option
to purchase the east and west sarcels Elgin River-
boat Resort must simultaneousl, exercise its op-
tions to purchase both parcels . The purchase price
for the east and west parcels would be determined
by a jointly approved MAI appraiser. Title to the
east and west parcels would re ert to the City in
the event Elgin Riverboat Reso t did not commence
construction of a 150 guest roo hotel within three
years and complete same within f 've years .
E. Section 33 further provides that if the City propos-
es to construct, or approves t. be constructed any
building or improvement on the ast parcel prior to
December 31, 2004 , the City shall first notify
Elgin Riverboat Resort thereof in writing setting
forth the nature of the propose• development . Upon
receiving such notice Elgin Ri erboat Resort shall
have thirty (30) days in which the notify the City
in writing of its intention to purchase that por-
tion of the east parcel which ' he City proposes to
develop. The purchase price fog the property would
be determined by a jointly app oved MAI appraiser.
If Elgin Riverboat Resort fails to exercise its
option to purchase the east .arcel the City may
develop the east parcel as proposed free of any
remaining rights of Elgin Ri erboat Resort with
respect to the east parcel .
F. Section 34 further provides that if the City propos-
es to construct, or approves t• be constructed any
building or improvement on the est parcel prior to
December 31, 1999, the City shall first notify
Elgin Riverboat Resort thereof in writing setting
forth the nature of the propose. development . Upon
receiving such notice Elgin Ri erboat Resort shall
have thirty (30) days in which to notify the City
in writing of its intention to purchase the entire
west parcel . The purchase pr ' ce for the property
would be determined by a j .intly approved MAI
appraiser. If Elgin Riverbo.:t Resort fails to
exercise its right to purchase the west parcel the
City may develop the west par.el as proposed free
of any remaining rights of El.in Riverboat Resort
with respect to the west parcel .
With the exception of a right of first refusal on the
east parcel which continues throug December 31, 2004 ,
all of Elgin Riverboat Resort ' s rigl ts to the east and
west parcels expire as of December 31, 1999 . The cur-
rent proposal by Elgin Riverboat Re-ort would therefore
not appear to be a significant change to the current
rights and obligations of the parties with respect to
• Grand Victoria Casino
August 10, 1999
Page 4
the east and west parcels . Further discussions should
be conducted with Elgin Riverboat 'resort to ascertain
more details regarding its proposal o this issue .
In the event the City Council agrees to t e proposed 24 hour
operation, or the proposed 4 : 00 a.m. liquor license which is
the subject of a separate City Council agenda item, it is the
intention of city staff and the police department to monitor
activities at the pavilion over the next year and to report
back to the City Council regarding any -dverse impact as a
result of the change in such operations .
The attached communication from Elgin Ri erboat Resort dis-
cusses several other possible changes i the operations of
the Grand Victoria Casino which will not require amendments
to the agreements between Elgin Riverboat Resort and the
City. Although the movie theater was ncluded within the
development at the request of the city t ere is no require-
ment in any of the agreements between he City and Elgin
Riverboat Resort which requires that th- movie theater be
maintained on the subject property. Any change in the loca-
tion of liquor sales on the premises w; 11 require further
City Council action in the form of amend ents to the Class N
and Class N-1 liquor licenses as such l ' censes specifically
designate the location within the subject property where the
sale of alcohol is permitted.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
Elgin Riverboat Resort and the police department .
FINANCIAL IMPACT
None .
LEGAL IMPACT
Amendments to the Amended and Restated Grund Lease Agreement
and to the Ground Lease and Option Agreement would be re-
quired.
ALTERNATIVES
1 . Approval of the amendments relati g to the 24 hour
operation and shuttle bus system a d continued discus-
sions with Elgin Riverboat Resort regarding the land
options and the use of the east and est parcels .
2 . Rejection of the proposed amendments .
RECOMMENDATION
It is recommended that the City Council .pprove amendments to
the agreements between the City and Elgi Riverboat Resort to
allow for a 24 hour operation and to pro ide for the request-
Grand Victoria Casino
• August 10, 1999
Page 5
red changes to the shuttle bus system operations . It is
further recommended that staff conduct Further discussions
with Elgin Riverboat Resort regarding any changes to the land
options and the use of the east and west p.:rcels .Alo
ectf lly/subm tt- d,
/ ) ,
Jore I. Parker
City Man:ger
WAC/nr
Attachment
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• Aug-10-99 12:51pm From-HYATT DEVELOPMENT 3127508b84 T-895 P.02/03 F-980
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r Grand Victoria Casino: Topics for Ci Council Meeting
The Grand Victoria Casino is anticipating new competiti n and is preparing agressively
to protect and enhance its market. Several examples folio :
1. Increase the entertainment options availahle in the pavilion, making the
experiences at the Grand Victoria more appealing to a wider customer
base.
a. Convert the Fox & Hours. Sports Bar to another
food/entertainment outlet.
b. Exercise the buyout option of th= movie theater, rnakin this an
additional food outlet with en •'. •em.
2, increase sales efforts in the banquet burin:ss_
a. Upgrade the Fox River room.
b. Major redecorating projects in .e pavilion, (the gift shop, the
boat's lower level cage, and the pl. ers club).
r3. Increase Player Development programs i an effort to attract moire of the
high-end type of player.
a. For example, there will be more vents such as boxing 'matches,
golf tournaments, and player parti= are all showing greater player
participation and revenue.
4. We have contracted with a profession• survey company to help us
determine what our customers want to see in the way of additional
amenities at the Grand Victoria.
Needed cooperation and assistance from the City of Elgin Requests from the City to
help us compete with the facility at Rosemont are listed:
a. Operating twenty-four hours (24) versus the current twenty-two
(22).
b. A four a.m. (4a.m.) liquor license far the pavilion outlets.
(i) Our staff of one hundred (100) security personnel:directed
by a retired state police • :ent insures the preseice of a
trained security staff preset'.e twenty-four(24)hours a day.
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. Aug-10=99 12:52pm From-HYATT DEVELOPMENT 3127508004 T-895 P.O3/O3 F-980
. l I
1
rThis insures that no additional city resources .need be
expended on police staffing for the 4a.m. liquor license.
c. Use the shuttle bus described in the prior city agreement for other
business uses such as runs to ilocal area hotels. Drop the
requirement of picking up passengers at specified locations in the
city.
(i) Previously, use of the shu 'c was viewed as transportation
for patrons arriving by tr.' or bus; this has of been
realized and is a waste of resources. The passe ger total
for the last two (2) quarte was sixty (60) passengers, or
ten (10) passengers a mo e, several of them en ployees.
The number of passengers ;wed above is concis ent with
its utilization for the last fiv. (5)years_ '
The land options will not be exercised, however we wo d like to enter into diticussions
with the City for an agreement allowing us to use the lots for promotional even-4 prior to
their redevelopment, and giving us the "right of first offe r" on the East lot if it should be
sold or redeveloped.
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