12-30 ,
Resolution No. 12-30
RESOLUTION
AUTHORIZING EXECUTION OF AN AGREEMENT
WITH HOSPITALITY AND GAMING SOLUTIONS
FOR CONDUCTING A MARKET DEMAND STUDY REGARDING A
MULTI-PURPOSE FACILITY AND ENTERTAINMENT COMPLEX
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS,
that pursuant to Elgin Municipal Code Section 5.02.020B(9)the City Council hereby finds that
an exception to the requirements of the procurement ordinance is necessary and in the best
interest of the city; and
BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Sean R. Stegall, City Manager, and Kimberly A. Dewis, City Clerk, be and are
hereby authorized and directed to execute an Agreement with Hospitality and Gaming Solutions on
behalf of the City of Elgin for conducting a market demand study regarding a multi-purpose facility
and entertainment complex,a copy of which is attached hereto and made a part hereof by reference.
s/David J. Kaptain
David J. Kaptain, Mayor
Presented: February 8, 2012
Adopted: February 8, 2012
Omnibus Vote: Yeas: 6 Nays: 0
Attest:
s/Kimberly Dewis
Kimberly Dewis, City Clerk
r
AGREEMENT
THIS AGREEMENT is made and entered into this 8th day of February 2012, by and
between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as
"CITY") and Hospitality and Gaming Solutions, a sole proprietorship (hereinafter referred to
as "CONSULTANT').
WHEREAS, the CITY desires to engage the CONSULTANT to furnish certain
professional services in connection with the proposed market demand study for a multi-
purpose facility and entertainment complex (hereinafter referred to as the PROJECT); and
WHEREAS, the CONSULTANT represents that it has the necessary expertise and
experience to furnish such services upon the terms and conditions set forth herein below.
NOW, THEREFORE, it is hereby agreed by and between the CITY and the CONSULTANT
that the CITY does hereby retain the CONSULTANT for and in consideration of the mutual
promises and covenants contained herein, the sufficiency of which is hereby
acknowledged to perform the services relating to the PROJECT as described herein,
subject to the following terms and conditions and stipulations, to-wit:
1. SCOPE OF SERVICES
A. CONSULTANT shall perform the services for the PROJECT as
outlined in CONSULTANTS letter of agreement dated December 27, 2011,
a copy of which is attached hereto as Exhibit 1.
B. All work hereunder shall be performed under the direction of the City
Manager of the CITY, hereinafter referred to as the "DIRECTOR".
2. SCHEDULE
CONSULTANT shall commence with the services to be provided pursuant to this
agreement upon entry into and execution of this agreement and shall complete
such services as soon as is reasonably practicable.
3. WORK PRODUCTS
All work products prepared by the CONSULTANT pursuant hereto including, but
not limited to, reports, plans, designs, calculations, work drawings, studies,
photographs, models and recommendations shall be the property of the CITY and
shall be delivered to the CITY upon request of the DIRECTOR provided, however,
that the CONSULTANT may retain copies of such work products for its records.
Such work products are not intended or represented to be suitable for reuse by the
CITY on any extension to the PROJECT or on any other project, and such reuse
shall be at the sole risk of the CITY without liability or legal exposure to the
CONSULTANT.
' 4. PAYMENTS TO THE CONSULTANT
A. The CONSULTANT shall be paid in accordance with the "Fees and
Schedule" section of Exhibit 1 .
B. The CITY shall make periodic payments to the CONSULTANT based
upon actual progress within thirty (30) days after receipt and approval of
invoice.
5. INVOICES
A. The CONSULTANT shall submit invoices in a format approved by the
CITY. Progress reports will be included with all payment requests.
B. The CONSULTANT shall maintain records showing actual time
devoted and cost incurred. The CONSULTANT shall permit the authorized
representative of the CITY to inspect and audit all data and records of the
CONSULTANT for work done under this Agreement. The CONSULTANT
shall make these records available at reasonable times during the Agreement
period, and for a year after termination of this Agreement.
6. TERMINATION OF AGREEMENT
Notwithstanding any other provision hereof, the CITY may terminate this Agreement
at any time upon fifteen (15) days prior written notice to the CONSULTANT. In the
event that this Agreement is so terminated, the CONSULTANT shall be paid for
services actually performed and reimbursable expenses actually incurred prior to
termination, except that reimbursement shall not exceed the amount set forth under
Paragraph 4 above.
7. TERM
This Agreement shall become effective as of the date the CONSULTANT is given a
notice to proceed and, unless terminated for cause or pursuant to paragraph 6,
shall be deemed concluded on the date the CITY determines that all of the
CONSULTANT'S work under this Agreement is completed. A determination of
completion shall not constitute a waiver of any rights or claims which the CITY may
have or thereafter acquire with respect to any term or provision of the Agreement.
8. NOTICE OF CLAIM
If the CONSULTANT wishes to make a claim for additional compensation as a
result of action taken by the CITY, the CONSULTANT shall give written notice of his
claim within 15 days after occurrence of such action. No claim for additional
compensation shall be valid unless so made. Any changes in the CONSULTANT'S
fee shall be valid only to the extent that such changes are included in writing signed
by the CITY and the CONSULTANT. Regardless of the decision of the DIRECTOR
relative to a claim submitted by the CONSULTANT, all work required under this
Agreement as determined by the DIRECTOR shall proceed without interruption.
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9. BREACH OF CONTRACT
If either party violates or breaches any term of this Agreement, such violation or
breach shall be deemed to constitute a default, and the other party has the right to
seek such administrative, contractual or legal remedies as may be suitable to the
violation or breach; and, in addition, if either party, by reason of any default, fails
within fifteen (15) days after notice thereof by the other party to comply with the
conditions of the Agreement, the other party may terminate this Agreement.
Notwithstanding the foregoing, or anything else to the contrary in this Agreement,
with the sole exception of an action to recover the monies the CITY has agreed to
pay to the CONSULTANT pursuant to paragraph 4 hereof, no action shall be
commenced by the CONSULTANT against the CITY for monetary damages.
10. INDEMNIFICATION
To the fullest extent permitted by law, CONSULTANT agrees to and shall indemnify,
defend and hold harmless the CITY, its officers, employees, agents, boards and
commissions from and against any and all claims, suits, judgments, costs,
attorneys fees, damages or other relief, including but not limited to workers
compensation claims, in any way resulting from or arising out of negligent actions or
omissions of the CONSULTANT in connection herewith, including negligence or
omissions of employees or agents of the CONSULTANT arising out of the
performance of this Agreement. In the event of any action against the CITY, its
officers, employees, agents, boards or commissions, covered by the foregoing duty
to indemnify, defend and hold harmless such action shall be defended by legal
counsel of the CITY'S choosing. The provisions of this paragraph shall survive any
expiration, completion and/or termination of this Agreement.
11. NO PERSONAL LIABILITY
No official, director, officer, agent or employee of the CITY shall be charged
personally or held contractually liable under any term or provision of this Agreement
or because of their execution, approval or attempted execution of this Agreement.
12. INSURANCE
A. Comprehensive Liability. The CONSULTANT shall provide, pay for
and maintain in effect, during the term of this Agreement, a policy of
comprehensive general liability insurance with limits of at least $1,000,000
aggregate for bodily injury and $1,000,000 aggregate for property damage.
The CONSULTANT shall deliver to the DIRECTOR a Certification of
Insurance naming the CITY as additional insured. The policy shall not be
modified or terminated without thirty (30) days prior written notice to the
DIRECTOR.
The Certificate of Insurance which shall include Contractual obligation
assumed by the CONSULTANT under Article 10 entitled "Indemnification"
shall be provided.
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This insurance shall apply as primary insurance with respect to any
other insurance or self-insurance programs afforded to the CITY. There shall
be no endorsement or modification of this insurance to make it excess over
other available insurance, alternatively, if the insurance states that it is excess
or prorated, it shall be endorsed to be primary with respect to the CITY.
B. Comprehensive Automobile Liability. Comprehensive Automobile
Liability Insurance covering all owned, non-owned and hired motor vehicles
with limits of not less than $500,000 per occurrence for damage to property.
C. Combined Single Limit Policy. The requirements for insurance
coverage for the general liability and auto exposures may be met with a
combined single limit of $1,000,000 per occurrence subject to a $1,000,000
aggregate.
D. Professional Liability. The CONSULTANT shall carry
CONSULTANT'S Professional Liability Insurance Covering claims resulting
from error, omissions or negligent acts with a combined single limit of not
less than $1,000,000 per occurrence. A Certificate of Insurance shall be
submitted to the DIRECTOR as evidence of insurance protection. The policy
shall not be modified or terminated without thirty (30) days prior written
notice to the DIRECTOR.
13. NONDISCRIMINATION
In all hiring or employment made possible or resulting from this Agreement, there
shall be no discrimination against any employee or applicant for employment
because of sex, age, race, color, creed, national origin, marital status, of the
presence of any sensory, mental or physical handicap, unless based upon a bona
fide occupational qualification, and this requirement shall apply to, but not be
limited to, the following: employment advertising, layoff or termination, rates of pay
or other forms of compensation and selection for training, including apprenticeship.
No person shall be denied or subjected to discrimination in receipt of the benefit of
any services or activities made possible by or resulting from this Agreement on the
grounds of sex, race, color, creed, national origin, age except minimum age and
retirement provisions, marital status or the presence of any sensory, mental or
physical handicap. Any violation of this provision shall be considered a violation of a
material provision of this Agreement and shall be grounds for cancellation,
termination or suspension, in whole or in part, of the Agreement by the CITY.
14. ASSIGNMENT AND SUCCESSORS
This Agreement and each and every portion thereof shall be binding upon the
successors and the assigns of the parties hereto; provided, however, that no
assignment shall be made without the prior written consent of the CITY.
15. DELEGATIONS AND SUBCONTRACTORS
Any assignment, delegation or subcontracting shall be subject to all the terms,
conditions and other provisions of this Agreement and the CONSULTANT shall
remain liable to the CITY with respect to each and every item, condition and other
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provision hereof to the same extent that the CONSULTANT would have been
obligated if it had done the work itself and no assignment, delegation or
subcontract had been made. Any proposed subcontractor shall require the CITY'S
advanced written approval.
16. NO CO-PARTNERSHIP OR AGENCY
This Agreement shall not be construed so as to create a partnership, joint venture,
employment or other agency relationship between the parties hereto.
17. SEVERABILITY
The parties intend and agreed that, if any paragraph, sub-paragraph, phrase,
clause or other provision of this Agreement, or any portion thereof, shall be held to
be void or otherwise unenforceable, all other portions of this Agreement shall
remain in full force and effect.
18. HEADINGS
The headings of the several paragraphs of this Agreement are inserted only as a
matter of convenience and for reference and in no way are they intended to define,
limit or describe the scope of intent of any provision of this Agreement, nor shall
they be construed to affect in any manner the terms and provisions hereof or the
interpretation or construction thereof.
19. MODIFICATION OR AMENDMENT
This Agreement and its attachments constitutes the entire Agreement of the parties
on the subject matter hereof and may not be changed, modified, discharged or
extended except by written amendment duly executed by the parties. Each party
agrees that no representations or warranties shall be binding upon the other party
unless expressed in writing herein or in a duly executed amendment hereof, or
change order as herein provided.
20. APPLICABLE LAW
This Agreement shall be deemed to have been made in, and shall be construed in
accordance with the laws of the State of Illinois. Venue for the resolution of any
disputes or the enforcement of any rights pursuant to this Agreement shall be in the
Circuit Court of Kane County, Illinois.
21. NEWS RELEASES
The CONSULTANT may not issue any news releases without prior approval from
the DIRECTOR, nor will the CONSULTANT make public proposals developed under
this Agreement without prior written approval from the DIRECTOR prior to said
documentation becoming matters of public record.
22. COOPERATION WITH OTHER CONSULTANTS
The CONSULTANT shall cooperate with any other consultants in the CITY'S
employ or any work associated with the PROJECT.
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• ' 23. INTERFERENCE WITH PUBLIC CONTRACTING
The CONSULTANT certifies hereby that it is not barred from bidding on this
contract as a result of a violation of 720 ILCS 5/33E et seq. or any similar state or
federal statute regarding bid rigging.
24. SEXUAL HARASSMENT
As a condition of this contract, the CONSULTANT shall have written sexual
harassment policies that include, at a minimum, the following information:
A. the illegality of sexual harassment;
B. the definition of sexual harassment under state law;
C. a description of sexual harassment, utilizing examples;
D. the vendor's internal complaint process including penalties;
E. the legal recourse, investigative and complaint process available
through the Illinois Department of Human Rights, and the Illinois Human
Rights Commission;
F. directions on how to contact the department and commission;
G. protection against retaliation as provided by Section 6-101 of the
Human Rights Act.
A copy of the policies shall be provided by CONSULTANT to the Department of
Human Rights upon request 775 ILCS 5/2-105.
25. SUBSTANCE ABUSE PROGRAM. As a condition of this agreement,
CONSULTANT shall have in place a written substance abuse prevention program
which meets or exceeds the program requirements in the Substance Abuse
Prevention Public Works Project Act at 820 ILCS 265/1 et seq. A copy of such
policy shall be provided to the DIRECTOR prior to the entry into and execution of
this agreement.
26. WRITTEN COMMUNICATIONS
All recommendations and other communications by the CONSULTANT to the
DIRECTOR and to other participants which may affect cost or time of completion,
shall be made or confirmed in writing. The DIRECTOR may also require other
recommendations and communications by the CONSULTANT be made or
confirmed in writing.
27. NOTICES
All notices, reports and documents required under this Agreement shall be in
writing and shall be mailed by First Class Mail, postage prepaid, addressed as
follows:
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A. As to CITY:
William A. Cogley
Corporation Counsel
City of Elgin
150 Dexter Court
Elgin, Illinois 60120-5555
B. As to CONSULTANT:
John J. Repa
President
Hospitality and Gaming Solutions
1050 Suntan Lane
Palm Springs, CA 92264
28. COMPLIANCE WITH LAWS
Notwithstanding any other provision of this AGREEMENT it is expressly agreed and
understood that in connection with the performance of this AGREEMENT that the
CONSULTANT shall comply with all applicable Federal, State, City and other
requirements of law, including, but not limited to, any applicable requirements
regarding prevailing wages, minimum wage, workplace safety and legal status of
employees. Without limiting the foregoing, CONSULTANT hereby certifies,
represents and warrants to the CITY that all CONSULTANT'S employees and/or
agents who will be providing products and/or services with respect to this
AGREEMENT shall be legal residents of the United States. CONSULTANT shall
also at its expense secure all permits and licenses, pay all charges and fees and
give all notices necessary and incident to the due and lawful prosecution of the
work, and/or the products and/or services to be provided for in this AGREEMENT.
The CITY shall have the right to audit any records in the possession or control of
the CONSULTANT to determine CONSULTANT'S compliance with the provisions
of this section. In the event the CITY proceeds with such an audit the
CONSULTANT shall make available to the CITY the CONSULTANT'S relevant
records at no cost to the CITY.
IN WITNESS WHEREOF, the parties hereto have entered into and executed this
agreement effective as of the date and year first written above.
FOR THE CITY. FOR THE CONSULTANT:
By / - �.�#4fa.
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CITY OF ELGI
GRAND VICTORIA RIVERB * AT CASINO
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MARKET DEMAND FOR A M. LTI-PURPOSE
FACILITY AND ENTERTAINM : NT COMPLEX
PROPOSAL
DECEMBER 2011
For questions about this proposal, please contact
Real Estate & Hospitality Advisory Services
1050 E. Suntan Lane
Palm Springs, California 92264
Telephone: (760) 992-5349
Fax: (760) 992-5223
Cellular: (612) 251-1343
Entail. • . .....
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December 27, 2011
Mr. Sean Stegall
City 'danger
Cit\ of Elgin
150 Dexter Court
Elgin, Illinois 60120
Dear Mr.Stegall:
Hospitality and Gaming Solutions appreciates the opportunity to propose on performing a
market demand study for a multi-purpose facility and entertainment complex to be located at
the Festival Park site in downtown Elgin, Illinois. Hospitality and Gaming Solutions is
committed to provide both the City of Elgin and Grand Victoria Casino with a highly
qualified professional with the necessary entertainment, hospitality, gaming and financial
analysis experience. We believe that our previous industry experience, specifically as it
pertains to multi-purpose facilities, entertainment centers and gaming will help to ensure that
our services and recommendations are flexible and practical enough to meet your needs and
objectives.
We look forward to working with you. If you have questions about our proposal or need
additional information about our firm, please feel free to contact me directly at either(760)
992-5349 or (612) 251-1343.
1 ours truly,
Hospitality and Gaming Solutions
John J. Repo
Presii1c :t
Exhibit 1
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The City of Elgin currently owns and operates the Hemmens Cultural Center that is a venue
for rental events, including serving as the performance home of the award-winning Elgin
Symphony Orchestra.. The facility also annually serves several community theater groups.
dance recitals and graduation ceremonies. The 1 1,340 square-foot Exhibition 1-tall located in
the lower level of the Hemmens offers a fully equipped banquet kitchen, art gallery and
meeting rooms for wedding receptions, trade shows and exhibits.
The Hemmens Cultural Center is located on Riverwalk and is part of Elgin's growing arts
community. Since its opening in 1969 names as B B. King, Bob Newhart, Phil Vassar, The
Ides of March, Blue Oyster Cult and many more.
The Grand Victoria Casino has been an economic catalyst for the City of Elgin. The
property has recently experienced a decline in revenue. due to the opening of the Rivers
Casino in Des Plaines. Casino management is exploring the viability of building an
entertainment center, which would house Gilley's. Gilley's is a country western
entertainment facility, with locations currently in Dallas and Las Vegas.
The City of Elgin and the Grand Victoria Casino are both seeking market demand studies
regarding the proposed facilities. This would forge another public/private partnership as
the subject facilities would be built in tandem and be immediately adjacent to the Grand
Victoria Casino, to he located at what is now known as Festival Park
The proposed new multi-purpose facility and entertainment center could host a variety of
entertainment activities for community residents and visitors. Potential event activity includes
the Elgin Symphony, other events, concerts/festivals, and other civic events.
Prior to starting this engagement, we would request the following information from the City
of Elgin and Grand Victoria Casino Management:
• Previous market studies performed for the I Iemmens Center:
• Architectural study regarding the Hemmens Center estimate renovation costs;
• Historical financial statement for Hemmens center for 20(18- 201 I:
• Hemmens Center's 2010 and 2011 marketing plans and budgets:
• A list of department heads and management personnel at Hemmens Center:
• A list of recent capital improvements ( 2008 through 201 1) and budgeted capital
expenditures for 2012 and 2013;
• Profit and loss analysis for individual events(i.e. previous headline entertainment); and
• Zip Code analysis for calendar years 2010 and 2011 for the Grand Victoria's player club
data base.
The issues associated with market onnortunities. local and regional competition changing
economics user needs/remrirements dictate an ever-evolving set of onerating conditions and
annroaches_ Our nroiect team utilizes a methodology that Provides ohiective_ research-based
information to assist the City in making an informed decision regarding the nronosed new
facility. We nronose an interactive anproach to our services which nrovides an onnortunity to
engage annronriale stakeholders and obtain their nersnectives on the nronosed new
multi-nurnose facility and entertainment center early in the study process which can he
valuable in building consensus for the project should it be deemed viable from a market
demand perspective.
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' Based on our understanding of the project, we propose the following scope of services to assist
the City and Grand Victoria Casino Management with its evaluation of this important project.
We can refine our scope to ensure that it is fully responsive to your needs.
t' .
it is our understanding that the City and Grand Victoria Casino Management seeks to better
understand the benefits. onnortunities. and challenges nosed by the nronosed new
multi-nurnose facility and entertainment center in Elgin Conducting a market demand analysis
study is an imnortant element in evaluating the merits of the nronosed new multi-purpose
facility and entertainment center. Our work steps are as follows:
We \yill conduct a kickoff meetin,T with the appropriate City representatives and Grand
Victoria management to establish direct lines of communication, develop an understanding of
the background, history and key issues related to the study; confirm the study scope and
objectives: review existing data you have related to the project; discuss the project schedule.
and tour potential site location. During our initial site visit, we also plan to hold meetings with
area stakeholders,
An important. factor in assessing notential market demand is obtaining a thorough
understanding of the market within which the nronosed new multi-nurnose facility and
entertainment comnlex would overate The location of the facility is tonically important in the
decision-making process for both event nroducers and attendees In addition demogranhic and
economic characteristics help identify. in general terms neonle who would attend events at the
proposed new facility. As such, the following characteristics will be analyzed for the region:
• Trends and projections in population, age distribution. and
income
• Lmployntent base
- Accessibility
• f ourism'visitor statistics
A Existing and planned amenities andior development projects that could impact future
demand for the proposed new multi-purpose facility or entertainment center
in this task we will conduct an e‘,ahiation of regional facilities Snecific-aIle• we will
summarize existing and planned facilities in terms of their physical characteristics (e „ size,
specific building components. amenities. narking spaces etc 1. usage characteristics (e.g..
number of events and attendance mix of business- etc 1 and general financial onerations
operating revenues. onerating exnenses etc 1 to assess how the nronosed new facilities could
comnete with or complement these facilities Our recent work on other related studies provides
us with a solid understanding of the industry that will prove beneficial for this task.
An imnortant Hart of the market analysis will he to meet with various stakeholders throughout
the study nrocess to understand their nersnectiyes on the strengths challenges and onnortunities
associated with the nronosed new facilities their- innut can he an important factor in
formulating conclusions and to the nroiect's overall nlannino efforts Stakeholders to he
interviewed include hut are not limited to. representatives from area governments and related
agencies the Elgin Convention and Visitors Bureau_ and potentially other business community
lea leaders identified throughout the study process
a
Input will he received from these moons through direct interviews_ either individually as well
, as from phone or email surveys. Our extensive exnerience with similar Projects will be
beneficial as we have established relationshins with renresentatives of a variety of
raaniz at ions/not en t i a 1 user groans The innut obtained from area stakeholders and other
notential users will help identify market SLIDDOIL refine facility reauirements as well as uuantity
the notential type and number of events and attendance that could potentially occur at the
nronosed new multi-purpose center and entertainment center. Groups to be contacted include,
but are not limited to, representatives from the following:
• Flemmens Center current Management
• Representative from the Elgin Symphony
• Concert promoters
• Family show promoters
• Ctillev's corporate office
• ('laritas Market Research regarding Consumer Behavior Patterns
• Gilley's management in Las Vegas and Dallas
• Others as appropriate
in this task. we will analy7e, data from a select number of comparable facilities to the nronosed
new multi- nurnose facility and entertainment center in similar neer markets to Elgin. Specific
'actors to be analyzed in the comparable facility analysis include:
Market characteristics fe g.. population, income, age, accessibility, location)
• Physical characteristics or the venues (i e . stand-alone versus part ofa complex, seating
capacity, patron amenities, parking and other related infrastructure, etc.)
4 Management approach (e.g , public, private)
• Usage characteristics (e.g.., event mix, number of events and attendance by type)
O Financial operating data (e.g., operating revenues and expenses)
O Specific nuisances and associated costs in connection with a Gilley's franchise
We will seek to obtain the tnaioritv of information through direct interviews with management
at these facilities as well as through other secondary resources including our comprehensive
database of similar venues for both the multi-purnose facility and the entertainment center.
Hosnitalitv and Gaming Solutions currently has active engagements in both Las Vegas and
Dallas. the cities which currently have the Gillev's onerations. It is our intent to make
first-hand observations at both of these facilities. Our comnarable analysis can assist in
identifying the facility program narameters for the nronosed facilities as well as nrovidinu an
understanding of potential performance in terms of patronage levels and financial operations.
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lt is assumed that a primary goal of any new facility is to increase and diversify the event
activity available to both local residents and out-of-town attendees that generate economic
activity to the community. In this task, we will develop an estimate of utilization for the
proposed multi-purpose facility and the entertainment center which will be based on the
research conducted previously as well as the assumptions set forth in the report. The demand
estimate will summarize the number ofevents, average attendance and total attendance by
major type such as:
• Elgin Symphony
• Concerts
Family shows
Community and civic/special events
• Others as appropriate
This estimate of utilization will serve as the basis for the financial pro forma for the
multi-purpose facility as well as the entertainment center.
. .
Based on the research and analysis conducted in previous tasks including, but not limited to,
input from stakeholders. historical operating, information, information on competitive and
comparable facilities, as well as the estimate of potential usage. we will develop a financial pro
forma for the proposed new multi-purpose facility and entertainment center.. The financial pro
forma will be dependent on a number of assumptions regarding. the facility and its operations
which will be discussed in the report. For instance, assumptions will he made regarding
various tiers of ticket Prices depending. upon the event, management approach, staffing
reauirements, rental rates. etc. Facility-related operating. re‘CEILICS and operating expenses to
be forecasted include, but are not limited to, the following.
Operating Revenues Operatin2 Expenses
• Facility rental/admission • Salaries/wages and
• Ticket sales benefits
* Event services • Contracted services
Premium seating fir Utilities
applicable) • Insurance
• Parking * Repairs and maintenance
• Other revenues as • General administrative
appropriate costs
• Marketin.g/promotion
* Capital reserves
• Other expenses as
appropriate
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There will be two operating financial pro formas, one specifically for the multi-purpose facility
and the other for the entertainment center which will provide an estimate of net operating
income for the first five years of operation. Some of the expenses will be common to both pro
formas and these expenses shall be allocated based on utilization of the combined facilities. In
addition, we can provide you with a consolidated pro forma reflecting the revenues and
expenses of the proposed project in a holistic manner as well.
We will the address whether the Hemmens Facility has outlived its useful life as a
multi-purpose facility. We will utilize information and analyses previously performed on the
l-lemmens Center regarding the cost of updating the existing structure. Our comments ‘yill
include existing building infrastructure concerns as well as the advantages and disadvantage of
potentially moving the location to Festival Park
While we understand that the components within the expansion are being considered as a
stand-alone enterprise, we will comment on any potential impact on gaming revenue that may
result at the Grand Victoria Casino in Elgin_ This will be based on our experience in other
jurisdictions_ which have added similar amenities to their existing gaining operations.
Upon completion of all research tasks, we will prepare a draft report which summarizes our
findings and conclusions. Once the appropriate City Elgin and Grand Victoria Casino
representatives have reviewed the dratreport, we will make any appropriate refinements and
issue the final report. We also plan to conduct a work session with the City Elgin and Grand
Victoria Casino as well as others deemed appropriate to discuss the report
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This section addresses the Project Team.
With a commitment to servicing clients throuchout North America, FIGS emphasizes hmxds-on,
client-oriented consulting, based on our firindin principles of integrity, accuracy and respect. My
goal is to provide cost-effective solutions in order to maximize vu|uu, while respecting the individual
cncho�our n� /clients.
needs ofunique � s.
Our comprehensive approach ensures accountability through direc ` absolute and exclusive
involvement in each project, including meetingsmarket research, analysis, report writing and
presentation.
I perform comprehensive marki research as afoundation for all of our feasibility stdk:� focusing oo
he demographic characteristics, tourism patterns, transportation infrastructure and other elements
affecting the ability of a projectmoUroctdrmund. I ork to develop facility recommendations that
match the identified needs of the market and the goals of the project developers.
Due to my extensive experience with a broad array of leisure industry projects, I need not rely solely
on published information in p 'ccting future financial prr6r/nance. My pjections are based upon
}eam of experience working with leisure industry projects of all types and sizes thahas given us
access to operating and market data not available to the general public
HGS emphasizes hands-on, client-oriented consulting, based on our Ibunding principles0[inti y`
accuracy and respect. My comprehensive approach ensures accountability through the direct, absolute
and my exclusive involvement of the principals in each project, including meetings, market research,
analysis report writing and presentation.
Iwill attend not only introductory and sales meetings, but all meetings necessary for the successful
completion of each project. My hands-on, client-oriented practice doesn't stop there. As the President
of HGS, I will remain in constant contact with the City of Elgin and Grand Victoria Casino
management, accessible to answer any questions that may arise during my involvement in the project.
In addition to the initial meeting, I will conduct all site v isits, market research and fieldwork, thus
ensuring a complete understanding of the unique parameters of each project and the competitive
environment in which it will operate.
With over 28 years of experience in the hospitality and gaming industries, I will also conduct all
analyses for each individual project, thrther guaranteeing a comprehensive approach to analytical
process. My analyses are based on, not only published data, hut detailed comparisons to the actual
financial statements of numerous existing hospitality operations throughout the country, which we
have obtained on a confidential and proprietary basis while working directly with the operations.
After thorough analysis, I will prepare a comprehensive written report, suitable for the unique
requirements of each project, whether it he for financing, government submissions and/or public
relations. The final work product is readily accepted by lending institutions, developers and
government agencies, hotel and gaming companies.
Upon completion of each and every project, I am available for, and strongly encourage, a follow up
meeting. to present their findings, recommendations and conclusions for the project and to answer any
questions the client may have. In addition I have attended numerous press conferences, as well as
provided expert witness testimony for a vast array of hospitality-related concerns.
It is our policy to estimate fees that are competitive, yet enable us to provide responsive services of
high quality. With HGS, you can expect superior, on-time service delivery that provides value
beyond the numbers and can lead to assisting in enhancing your overall strategic plan for the City
of Elgin as well as the Grand Victoria Casino.
Upon your authorization to proceed, we will begin the assignment. We anticipate our findings will
be available in 6 to 8 weeks, depending on the level of cooperation with the various data sources.
Our professional fees for this engagement are S45,000.
In addition to our professional fees, we are reimbursed for all travel, accommodations.
stenographic, administrative and such other out-of-pocket expenses incurred in connection with
the engagement. These costs will not exceed 15% of the moressional fees. Progress bills
rendered during the course of our work are due and payable upon your receipt of our invoices. All
outstanding bills must be paid prior to the issuance of our final report.
It is our practice to receive a retainer prior to initiating work on a study. We are prepared to start
work immediately upon receiving your approval of these arrangements and a retainer in the
amount of$15,000.
It is understood in accepting this proposal that neither our fees nor payment thereof is contingent
upon the results of our efforts
These fees represent a significant discount from our standard rates, and we are pleased to extend
this cost-saving feature to you in recognition of the importance of the City of Elgin and the Grand
Victoria Casino as a client of the Firm,
if you require us to attend meetings and make presentations beyond our scope of services, we will
obtain your approval and charge you separately for our actual hours of professional time incurred
in preparing for and attending such meetings. Our professional time will be billed at our standard
hourly rates plus travel and incidental expenses_
1)1
For engagements of this nature there are certain additional limitino, conditions and requirements
promulgated by Industry Standards and our Firm, which are delineated as follows.
Arty reports or analysis prepared by IIGS in connection with this assignment may not he referred
to or quoted, in whole or in part, in any registration statement. prospectus, public tiling, sales and
marketing brochure, loan documents, or any other agreements or documents, without our prior
review and our prior written consent. which will not he unreasonably withheld
Any analysis of financial projections in connection with this assignment will not constitute an
examination or any form of assurance by JIGS, therefore in connection with this assignment we
will not express an opinion or any other form of assurance on the projections and budgets. There
will usually he differences between projected and actual results, because events and circumstances
frequently do not occur as expected, and those differences may be material.
Prior to issuing our report in connection with this assignment, we will require the City of Elgin and
Grand Victoria Casino sign this engagement letter in the space provided below, acknowledging the
terms of our arrangement and their responsibility for payment of our fees.
In the event HGS is requested pursuant to subpoena or other legal process to produce its
documents relating to this engagement tbr the City of Elgin and Grand Victoria Casino or testify in
judicial or administrative proceedings to which HGS is not a party, The City of Elgin and Grand
Victoria Casino shall reimburse HGS at standard billing rates for its professional time and
expenses, including reasonable attorney's fees, incurred in responding to such requests.
All information obtained by FIGS during the course of this engagement shall be used exclusively
for purposes of this engagement.
!Carly person or entity requests or subpoenas any information or materials relating to
this engagement that is in the custody or control of HGS or its agents or representatives, FIGS
shall inform the Client of the request as soon as is practicable. If the Client requires FIGS to take
any legal action to seek protection against the requested disclosure, Client shall either retain
counsel to represent HGS in those proceedings suitable to FIGS, or allow HGS to defend itself, and
shall indemnify FIGS for its reasonable costs and expenses, including attorney's fees, incurred in
the action. Nothing in this Agreement shall prohibit or limit either party's use of information
(including. but not limited to. ideas, concepts, know how. techniques, and methodologies) (a)
previously known to it, (b) independently developed by it, (c) acquired by it from a third party
which was not under any obligation to the Disclosing Party not to disclose such information, or(d)
which is or becomes publicly available through no breach of this Agreement by the Recipient.
We will have no responsibility to update our report for events and circumstances occurring after
the date of our report.
It is understood in accepting this proposal that neither our fees nor payment thereof is contingent
upon the results of the study.
We are enthusiastic about this opportunity to work with you and the other members of your
management team We believe that you are committed to a decision to move the City of Elgin
and Grand Victoria Casino to the next level of growth. Beginning this evolution with a
documented market demand study is a necessary first step to a successful end result and we
commend you on your foresight. We are convinced that this relatively minor investment up front
will more than pay for itself in the long term If you have any questions regarding this
engagement, please contact me directly at either(760) 992-5349 or (612) 251-1343.
Very truly yours,
John 1. Repii
President
Accepted by:
Title:
Date: I
_ _ • _________
. .
it
�
Y ^ ' ' ` �
THE CITY IN THE SUBURBS
AGENDA ITEM: K�
MEETING DATE: January 25, 2012
ITEM:
Grand Victoria Casino Market Demand Study for Multi-Purpose Facility and Entertainment
Complex
(No Direct Cost to the City)
OBJECTIVE:
Hire a consultant to perform a market demand study to determine the feasibility of expanding
the Grand Victoria Casino with a multi-purpose facility and entertainment complex.
RECOMMENDATION:
Approve the professional services agreement with Hospitality and Gaming Solutions to conduct
a market demand study for a multi-purpose facility and entertainment complex at the Grand
Victoria Casino.
BACKGROUND
In the past, the city and the Grand Victoria Casino have separately commissioned market de-
rnand studies for expanding their respective entertainment facilities or creating new facilities.
The opening of the Rivers Casino in Des Plaines has caused the Grand Victoria Casino to experi-
ence a decline in revenue and the casino management is exploring the viability of building a
multi-purpose entertainment facility at the Grand Victoria Casino. The city has previously iden-
tified the need for critical capital improvements at the Hemmens Cultural Center to maintain
that facility's competitiveness in the market but cost constraints have prohibited the city from
fully addressing those needs.
The Grand Victoria Casino has proposed partnering with the city in conducting a market de-
mand analysis to explore the feasibility of constructing a new multi-purpose facility and enter-
tainment center for the Grand Victoria Casino. Potential event activity at this new facility would
include the Elgin Symphony Orchestra, concerts, festivals and civic events.
OPERATIONAL ANALYSIS
The Grand Victoria Casino has identified "Hospitality and Gaming Solutions" as its preferred
consultant to perform the market demand study. Hospitality and Gaming Solutions has exten-
sive
experience pertaining to multi-purpose facilities, entertainment centers and gaming. Hos-
pitality and Gaming Solutions utilizes a methodology that provides objective, research-based
information to assist the city and casino in making an informed decision regarding any pro- '
posed new facility. It is also proposing an interactive approach to its analysis that will provide
an opportunity to engage community stakeholders and obtain their perspectives on the pro-
posed new multi-purpose facility. As part of its market demand analysis, Hospitality and Gam-
ing Solutions will:
• Conduct a kickoff meeting and gather data
• Analyze demographic and economic characteristics
• Analyze existing and planned facilities in the region
• Conduct interviews and surveys with area stakeholders and potential user groups
• Analyze data from comparable facilities
• Develop estimate of the potential usage event activity and capture rates
• Develop a financial pro forma
• Analyze the functional obsolescence of the Hemmens Cultural Center
• Determine the incremental impact on gaming revenue
• Prepare a written report and conduct a work session
The city and the Grand Victoria Casino will then use the information in the Hospitality and Gam-
ing Solutions market demand study to explore viable options for a new multi-purpose facility.
INTERESTED PERSONS CONTACTED
The Grand Victoria Casino was consulted regarding the proposed market demand study.
FINANCIAL ANALYSIS
Hospitality and Gaming Solutions is proposing to perform the market demand study for$45,000
plus travel and out-of-pocket expenses. The Grand Victoria Casino has agreed to reimburse the
city for its costs in hiring Hospitality and Gaming Solutions to conduct the market demand
study. As a result of this reimbursement there will be no net cost to the city to conduct this
study.
BUDGET IMPACT
FUND(S) ACCOUNT(S) PROJECT#(S) AMOUNT AMOUNT
BUDGETED AVAILABLE
General 010-6902-719.30-99 N/A $200,000 $200,000
LEGAL IMPACT
None.
4.4)
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ALTERNATIVES
•
The city may choose not to participate in the market demand study being conducted by Hospi-
tality and Gaming Solutions for the Grand Victoria Casino.
NEXT STEPS
Execute the proposed professional services agreement with Hospitality and Gaming Solutions.
Originators: Richard G. Kozal, Assistant City Manager
Final Review: Colleen Lavery, Chief Financial Officer
William A. Cogley, Corporation Counsel/Chief Development Officer
Richard G. Kozal, Assistant City Manager/Chief Operating Officer
Sean R. Stegall, City Manager
ATTACHMENTS
("14 A: Professional Services Agreement
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AGREEMENT
THIS AGREEMENT is made and entered into this 8th day of February 2012, by and
between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as
"CITY")and Hospitality and Gaming Solutions, a sole proprietorship(hereinafter referred to as
"CONSULTANT").
WHEREAS, the CITY desires to engage the CONSULTANT to furnish certain
professional services in connection with the proposed market demand study for a multi-
purpose facility and entertainment complex (hereinafter referred to as the PROJECT); and
WHEREAS, the CONSULTANT represents that it has the necessary expertise and
experience to furnish such services upon the terms and conditions set forth herein below.
NOW,THEREFORE, it is hereby agreed by and between the CITY and the CONSULTANT that
the CITY does hereby retain the CONSULTANT for and in consideration of the mutual
promises and covenants contained herein,the sufficiency of which is hereby acknowledged to
perform the services relating to the PROJECT as described herein, subject to the following
terms and conditions and stipulations, to-wit:
1. SCOPE OF SERVICES
A. CONSULTANT shall perform the services for the PROJECT as outlined in
CONSULTANT'S letter of agreement dated December 27, 2011, a copy of
which is attached hereto as Exhibit 1.
B. All work hereunder shall be performed under the direction of the City Manager
of the CITY, hereinafter referred to as the "DIRECTOR".
2. SCHEDULE
CONSULTANT shall commence with the services to be provided pursuant to this
agreement upon entry into and execution of this agreement and shall complete such
services as soon as is reasonably practicable.
3. WORK PRODUCTS
All work products prepared by the CONSULTANT pursuant hereto including, but not
limited to, reports, plans, designs, calculations,work drawings, studies, photographs,
models and recommendations shall be the property of the CITY and shall be delivered
to the CITY upon request of the DIRECTOR provided, however, that the
CONSULTANT may retain copies of such work products for its records. Such work
products are not intended or represented to be suitable for reuse by the CITY on any
extension to the PROJECT or on any other project, and such reuse shall be at the sole
risk of the CITY without liability or legal exposure to the CONSULTANT.
4)
4. PAYMENTS TO THE CONSULTANT
A. The CONSULTANT shall be paid in accordance with the "Fees and Schedule"
section of Exhibit 1.
B. The CITY shall make periodic payments to the CONSULTANT based upon
actual progress within thirty (30) days after receipt and approval of invoice.
5. INVOICES
A. The CONSULTANT shall submit invoices in a format approved by the CITY.
Progress reports will be included with all payment requests.
B. The CONSULTANT shall maintain records showing actual time devoted and
cost incurred. The CONSULTANT shall permit the authorized representative of
the CITY to inspect and audit all data and records of the CONSULTANT for
work done under this Agreement. The CONSULTANT shall make these records
available at reasonable times during the Agreement period, and for a year after
termination of this Agreement.
6. TERMINATION OF AGREEMENT
Notwithstanding any other provision hereof, the CITY may terminate this Agreement at
any time upon fifteen (15) days prior written notice to the CONSULTANT. In the event
that this Agreement is so terminated, the CONSULTANT shall be paid for services
actually performed and reimbursable expenses actually incurred prior to termination,
except that reimbursement shall not exceed the amount set forth under Paragraph 4
above.
7. TERM
This Agreement shall become effective as of the date the CONSULTANT is given a
notice to proceed and, unless terminated for cause or pursuant to paragraph 6, shall
be deemed concluded on the date the CITY determines that all of the CONSULTANT'S
work under this Agreement is completed. A determination of completion shall not
constitute a waiver of any rights or claims which the CITY may have or thereafter
acquire with respect to any term or provision of the Agreement.
8. NOTICE OF CLAIM
If the CONSULTANT wishes to make a claim for additional compensation as a result of
action taken by the CITY,the CONSULTANT shall give written notice of his claim within
15 days after occurrence of such action. No claim for additional compensation shall
be valid unless so made. Any changes in the CONSULTANT'S fee shall be valid only
to the extent that such changes are included in writing signed by the CITY and the
CONSULTANT. Regardless of the decision of the DIRECTOR relative to a claim
submitted by the CONSULTANT, all work required under this Agreement as
determined by the DIRECTOR shall proceed without interruption.
(1.4
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9. BREACH OF CONTRACT
If either party violates or breaches any term of this Agreement, such violation or breach
shall be deemed to constitute a default, and the other party has the right to seek such
administrative, contractual or legal remedies as may be suitable to the violation or
breach; and, in addition, if either party, by reason of any default, fails within fifteen (15)
days after notice thereof by the other party to comply with the conditions of the
Agreement, the other party may terminate this Agreement. Notwithstanding the
foregoing, or anything else to the contrary in this Agreement,with the sole exception of
an action to recover the monies the CITY has agreed to pay to the CONSULTANT
pursuant to paragraph 4 hereof, no action shall be commenced by the CONSULTANT
against the CITY for monetary damages.
10. INDEMNIFICATION
To the fullest extent permitted by law, CONSULTANT agrees to and shall indemnify,
defend and hold harmless the CITY, its officers, employees, agents, boards and
commissions from and against any and all claims, suits, judgments, costs, attorneys
fees, damages or other relief, including but not limited to workers compensation
claims, in any way resulting from or arising out of negligent actions or omissions of the
CONSULTANT in connection herewith, including negligence or omissions of
employees or agents of the CONSULTANT arising out of the performance of this
Agreement. In the event of any action against the CITY, its officers, employees,
agents, boards or commissions, covered by the foregoing duty to indemnify, defend
and hold harmless such action shall be defended by legal counsel of the CITY'S
choosing. The provisions of this paragraph shall survive any expiration, completion
and/or termination of this Agreement. 41111)
11. NO PERSONAL LIABILITY
No official, director, officer, agent or employee of the CITY shall be charged personally
or held contractually liable under any term or provision of this Agreement or because of
their execution, approval or attempted execution of this Agreement.
12. INSURANCE
A. Comprehensive Liability. The CONSULTANT shall provide, pay for and maintain
in effect, during the term of this Agreement, a policy of comprehensive general
liability insurance with limits of at least $1,000,000 aggregate for bodily injury
and $1,000,000 aggregate for property damage.
The CONSULTANT shall deliver to the DIRECTOR a Certification of Insurance
naming the CITY as additional insured. The policy shall not be modified or
terminated without thirty (30) days prior written notice to the DIRECTOR.
The Certificate of Insurance which shall include Contractual obligation assumed
by the CONSULTANT under Article 10 entitled "Indemnification" shall be
provided.
This insurance shall apply as primary insurance with respect to any other
insurance or self-insurance programs afforded to the CITY. There shall be no
endorsement or modification of this insurance to make it excess over other
3
available insurance, alternatively, if the insurance states that it is excess or
prorated, it shall be endorsed to be primary with respect to the CITY.
B. Comprehensive Automobile Liability. Comprehensive Automobile Liability
Insurance covering all owned, non-owned and hired motor vehicles with limits
of not less than $500,000 per occurrence for damage to property.
C. Combined Single Limit Policy. The requirements for insurance coverage for the
general liability and auto exposures may be met with a combined single limit of
$1 ,000,000 per occurrence subject to a $1,000,000 aggregate.
D. Professional Liability. The CONSULTANT shall carry CONSULTANT'S
Professional Liability Insurance Covering claims resulting from error, omissions
or negligent acts with a combined single limit of not less than $1 ,000,000 per
occurrence. A Certificate of Insurance shall be submitted to the DIRECTOR as
evidence of insurance protection. The policy shall not be modified or
terminated without thirty (30) days prior written notice to the DIRECTOR.
13. NONDISCRIMINATION
In all hiring or employment made possible or resulting from this Agreement, there shall
be no discrimination against any employee or applicant for employment because of
sex, age, race, color, creed, national origin, marital status, of the presence of any
sensory, mental or physical handicap, unless based upon a bona fide occupational
qualification, and this requirement shall apply to, but not be limited to, the following:
employment advertising, layoff or termination, rates of pay or other forms of
compensation and selection for training, including apprenticeship.
No person shall be denied or subjected to discrimination in receipt of the benefit of any
services or activities made possible by or resulting from this Agreement on the grounds
of sex, race, color, creed, national origin, age except minimum age and retirement
provisions, marital status or the presence of any sensory, mental or physical handicap.
Any violation of this provision shall be considered a violation of a material provision of
this Agreement and shall be grounds for cancellation, termination or suspension, in
whole or in part, of the Agreement by the CITY.
14. ASSIGNMENT AND SUCCESSORS
This Agreement and each and every portion thereof shall be binding upon the
successors and the assigns of the parties hereto; provided, however, that no
assignment shall be made without the prior written consent of the CITY.
15. DELEGATIONS AND SUBCONTRACTORS
Any assignment, delegation or subcontracting shall be subject to all the terms,
conditions and other provisions of this Agreement and the CONSULTANT shall remain
liable to the CITY with respect to each and every item, condition and other provision
hereof to the same extent that the CONSULTANT would have been obligated if it had
done the work itself and no assignment, delegation or subcontract had been made.
Any proposed subcontractor shall require the CITY'S advanced written approval.
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A")16. NO CO-PARTNERSHIP OR AGENCY
This Agreement shall not be construed so as to create a partnership, joint venture,
employment or other agency relationship between the parties hereto.
17. SEVERABILITY
The parties intend and agreed that, if any paragraph, sub-paragraph, phrase,clause or
other provision of this Agreement, or any portion thereof, shall be held to be void or
otherwise unenforceable, all other portions of this Agreement shall remain in full force
and effect.
18. HEADINGS
The headings of the several paragraphs of this Agreement are inserted only as a matter
of convenience and for reference and in no way are they intended to define, limit or
describe the scope of intent of any provision of this Agreement, nor shall they be
construed to affect in any manner the terms and provisions hereof or the interpretation
or construction thereof.
19. MODIFICATION OR AMENDMENT
This Agreement and its attachments constitutes the entire Agreement of the parties on
the subject matter hereof and may not be changed, modified, discharged or extended
except by written amendment duly executed by the parties. Each party agrees that no
representations or warranties shall be binding upon the other party unless expressed in
writing herein or in a duly executed amendment hereof, or change order as herein
provided.
20. APPLICABLE LAW
This Agreement shall be deemed to have been made in, and shall be construed in
accordance with the laws of the State of Illinois. Venue for the resolution of any
disputes or the enforcement of any rights pursuant to this Agreement shall be in the
Circuit Court of Kane County, Illinois.
21. NEWS RELEASES
The CONSULTANT may not issue any news releases without prior approval from the
DIRECTOR, nor will the CONSULTANT make public proposals developed under this
Agreement without prior written approval from the DIRECTOR prior to said
documentation becoming matters of public record.
22. COOPERATION WITH OTHER CONSULTANTS
The CONSULTANT shall cooperate with any other consultants in the CITY'S employ or
any work associated with the PROJECT.
23. INTERFERENCE WITH PUBLIC CONTRACTING
The CONSULTANT certifies hereby that it is not barred from bidding on this contract
as a result of a violation of 720 ILCS 5/33E et seq. or any similar state or federal
statute regarding bid rigging.
5
24. SEXUAL HARASSMENT
As a condition of this contract, the CONSULTANT shall have written sexual
harassment policies that include, at a minimum, the following information:
A. the illegality of sexual harassment;
B. the definition of sexual harassment under state law;
C. a description of sexual harassment, utilizing examples;
D. the vendor's internal complaint process including penalties;
E. the legal recourse, investigative and complaint process available through the
Illinois Department of Human Rights, and the Illinois Human Rights
Commission;
F. directions on how to contact the department and commission;
G. protection against retaliation as provided by Section 6-101 of the Human Rights
Act.
A copy of the policies shall be provided by CONSULTANT to the Department of
Human Rights upon request 775 ILCS 5/2-105.
25. SUBSTANCE ABUSE PROGRAM. As a condition of this agreement, CONSULTANT
shall have in place a written substance abuse prevention program which meets or
exceeds the program requirements in the Substance Abuse Prevention Public Works
Project Act at 820 ILCS 265/1 et seq. A copy of such policy shall be provided to the
DIRECTOR prior to the entry into and execution of this agreement.
26. WRITTEN COMMUNICATIONS
All recommendations and other communications by the CONSULTANT to the
DIRECTOR and to other participants which may affect cost or time of completion, shall
be made or confirmed in writing. The DIRECTOR may also require other
recommendations and communications by the CONSULTANT be made or confirmed
in writing.
27. NOTICES
All notices, reports and documents required under this Agreement shall be in writing
and shall be mailed by First Class Mail, postage prepaid, addressed as follows:
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6
•
41111)
A. As to CITY:
William A. Cogley
Corporation Counsel
City of Elgin
150 Dexter Court
Elgin, Illinois 60120-5555
B. As to CONSULTANT:
John J. Repa
President
Hospitality and Gaming Solutions
1050 Suntan Lane
Palm Springs, CA 92264
28. COMPLIANCE WITH LAWS
Notwithstanding any other provision of this AGREEMENT it is expressly agreed and
understood that in connection with the performance of this AGREEMENT that the
CONSULTANT shall comply with all applicable Federal, State, City and other
requirements of law, including, but not limited to, any applicable requirements
regarding prevailing wages, minimum wage, workplace safety and legal status of
employees. Without limiting the foregoing, CONSULTANT hereby certifies, represents
and warrants to the CITY that all CONSULTANT'S employees and/or agents who will
be providing products and/or services with respect to this AGREEMENT shall be legal
residents of the United States. CONSULTANT shall also at its expense secure all
permits and licenses, pay all charges and fees and give all notices necessary and
incident to the due and lawful prosecution of the work, and/or the products and/or
services to be provided for in this AGREEMENT. The CITY shall have the right to audit
any records in the possession or control of the CONSULTANT to determine
CONSULTANT'S compliance with the provisions of this section. In the event the CITY
proceeds with such an audit the CONSULTANT shall make available to the CITY the
CONSULTANT'S relevant records at no cost to the CITY.
IN WITNESS WHEREOF, the parties hereto have entered into and executed this
agreement effective as of the date and year first written above.
FOR THE CITY: FOR THE CONSULTANT:
By By:
City Manager
Its:
Attest:
City Clerk
4)
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PROPOSAL
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For questions about this proposal, please contact:
John J. Repa
P.resident
Real Estate & Hospitality Advisory Services
HTALTY 41\17 r:iA,MiNiz SOIC )NS
1050 E. Suntan Lane
Palm Springs, Caiifomia 92264
Telephone: (760) 992-5349
Fax: (760) 992-5223
Cellular: (612) 251-1343
Email: iolm741mnitdihandif,ailuTi<2solimons com
December 27, 2011
Mr. Sean Stegall
City Manger
City of EIgin
150 Dexter Court
Elgin, Illinois 60120
Dear Mr. Stegall:
Hospitality and Gaming Solutions appreciates the opportunity to propose on performing a
market demand study for a multi-purpose facility and entertainment complex to be located at
the Festival Park site in downtown Elgin, Illinois. Hospitality and Gaming Solutions is
committed to provide both the City of Elgin and Grand Victoria Casino with a highly
qualified professional with the necessary entertainment,hospitality, gaming and financial
analysis experience. We believe that our previous industry experience,specifically as it
pertains to multi-purpose facilities, entertainment centers and gaming will help to ensure that
our services and recommendations are flexible and practical enough to meet your needs and
objectives.
We look forward to working with you. If you have questions about our proposal or need
additional information about our firm,please feel free to contact me directly at either (760)
992-5349 or(612)251-1343.
Yours truly,
Hospitality and Gaming Solutions
17111L
John J. Repa
President
r
The city of Elgin currently owns and operates the Hemmens Cultural Center that is a venue
for rental events, including serving as the performance home of the award-winning Elgin
Symjhony Orchestra. The facility also annually serves several community theater groups,
dance recitals and graduation ceremonies. The 11,340 square-foot Exhibition Hall located in
the kiwer level of the Hemmens offers a fully equipped banquet kitchen, art gallery and
meeting rooms for wedding receptions, trade shows and exhibits.
The Hemmens Cultural Center is located on Riverwalk and is part of Elgin's growing arts
comMunity. Since its opening in 1969 names as B. B. King, Bob Newhart, Phil Vassar, The
Ides Of March, Blue Oyster Cult and many more.
The Grand Victoria Casino has been an economic catalyst for the City of Elgin. The
Propcim, has recently experienced a decline in revenue, due to the opening of the Rivers
Casino in Des Plaines. Casino management is exploring the viability of building an
entertainment center, which would house Gilley's. Gilley's is a country western
enterainment facility, with locations currently in Dallas and Las Vegas.
The city of Elgin and the Grand Victoria Casino are both seeking market demand studies
regarding the proposed facilities. This would forge another public/private partnership as
the sdbiect facilities would be built in tandem and be immediately adiacent to the Grand
Victoria Casino, to be located at what is now known as Festival Park.
1
The proposed new multi-purpose facility and entertainment center could host a variety of
entertainment activities for community residents and visitors. Potential event activity includes
the Elgin Symphony, other events, concerts/festivals, and other civic events.
Prior io starting this engagement,we would request the following information from the City
of Ellin and Grand Victoria Casino Management:
• Previous market studies performed for the Hemmens Center;
• Architectural study regarding the Hemmens Center estimate renovation costs;
• Historical financial statement for Hemmens center for 2008- 201 1;
• Hemmens Center's 2010 and 2011 marketing plans and budgets;
• A list of department heads and management personnel at Hemmens Center;
• A list of recent capital improvements ( 2008 through 2011) and budgeted capital
expenditures for 2012 and 2013;
• Profit and loss analysis for individual events(i.e. previous headline entertainment); and
• Zip Code analysis for calendar years 2010 and 2011 for the Grand Victoria's player club
data base.
The issues associated with market onnortunities. local and regional comnetition. changing
econoinics user needs/re,ouirements dictate an ever-evolving set of onerating conditions and
annroaches Our nroiect team utilizes a methodology that provides objective. research-based
information to assist the City in making an informed decision regarding the nronosed new
facility. We nronose an interactive annroach to our services which nrovides an onnortunity to
eng.age annronriate stakeholders and obtain their ners-nectives on the nronosed new
multi-pumose facility and entertainment center early in the study nrocess which can he
valual*in building consensus for the project should it be deemed viable from a market
demand perspective.
Based on our understanding of the nrojecn we propose the following scope or services to assist
the City and Grand Victoria Casino Management with its evaluation of this important project.
• We can refine our scope to ensure that it is fully responsive to your needs.
S - V.L,.T ..E_ DE`,_:x" 17:z
Ti is din understanding that the City and Grand Victoria Casino Management seeks to better
undetistand the benefits. onnortunities_ and challenges nosed by the nronosed new
multinurnose facility and entertainment center in Elgin Conducting a market demand analysis
studviis an imnortant element in evaluating the merits of the nronosed new multi-purpose
facilitjy and entertainment center. Our work steps are as follows:
We will conduct a kickoff meeting,with the appropriate City representatives and Grand
Victoria management to establish direct lines of communication; develop an understanding of
the background, history and key issues related to the study; confirm the study scope and
obieccives; review existing data you have related to the project; discuss the project schedule:
and tour potential site location. During our initial site visit,we also plan to hold meetings with
area stakeholders.
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An important factor in assessing not ential market demand is obtaining a thorough
understanding of the market within which the nronosed new multi-nurnose facility and
entertainment comniex would operate. The location of the facility is tonically important in the
decisihn-making nrocess for both event nroducers and attendees in addition demographic and
economic characteristics help identify. in general terms_ neonle who would attend events at the
propotaed new facility_ As such, the following characteristics will be analyzed for the region:
• Trends and projections in population, age distribution, and
ingome
• Eniiplovment base
• Accessibility
• Tottrismlyisitor statistics
• Existing and planned amenities and?'or development projects that could impact future
demand for the proposed new multi-purpose facility or entertainment center
in this task_ we will conduct an evaluation of regional facilities Snecifically_ we will
summarize existing and nlanned facilities in terms of their physical characteristics (e g . size,
snecific building conmonents_ amenities_ narking spaces_ etc 1_ usage characteristics (e.g.
number of events and attendance_ mix of business. etc.) and general financial operations (e g.,
onerat}ng revenues. onerating expenses. etc)to assess how the nronosed new facilities could
compete with or complement these facilities. Our recent work on other related studies provides
us with a solid understanding of the industry that will prove beneficial for this task.
7'a_rol� -.v i%ilc:< !ji'_ "+`.."*i°. .':`w. ,{n. #ice°zi:>tdc .. _..•°i,1
An impI orta.nt nart of the market analysis will be to meet with various stakeholders throughout
the study nrocess to understand their nersnectives on the strengths challenges and onnortunities
rik associated with the proposed new facilities. Their innut can be an important factor in
formuliating conclusions and to the nroiect's overall planning efforts Stakeholders to he
interviewed include. hut are not limited to. representatives from area governments and related
agencies. the Elgin Convention and Visitors Bureau, and potentially other business community
lea leaders identified throughout the study process.
Input will he received from these groups through direct interviews_ either individually as well .
as from phone or email surveys. Our extensive experience with similar nroiects will be
beneficial as we have established relationships with representatives of a variety of
oreanizationst'notential user groups_ The input obtained from area stakeholders and other
noterrtial users will hell) identify market support_ refine facility reauirements as well as ouantify
the Potential type and number of events and attendance that could potentially occur at the
nronosed new multi-nurnose center and entertainment center. Groups to be contacted include,
but are not limited to, representatives from the following:
• Hemmens Center current Management
• Representative from the Elgin Symphony
• Concert promoters
• Family show promoters
• Gilley's corporate office
• Claritas Market Research regarding Consumer Behavior Patterns
1
• Gilley's management in Las Vegas and Dallas
• Others as appropriate
A)
Ti:i l -Analisze Data:ftwin Comparable Facilities
In this task_ we will analyze data from a select number of comnarable facilities to the nronosed
new Multi- nurnose facility and entertainment center in similar neer markets to Elgin. Specific
factors to be analyzed in the comparable facility analysis include:
• Market characteristics (e.g., population, income, age, accessibility, location)
• Physical characteristics of the venues(i.e.. stand-alone versus part of a complex, seating
capacity, patron amenities, parking and other related infrastructure, etc.)
• Management approach (e.g., public, private)
• USage characteristics (e.g., event mix, number of events and attendance by type)
• Financial operating data (e.g., operating revenues and expenses)
• Specific nuisances and associated costs in connection with a Gilley's franchise
We will seek to obtain the majority of information through direct interviews with manaaement
at thee facilities as well as through other secondary resources including our comnrehensive
database of similar venues for both the multi-purpose facility and the entertainment center.
Hospitality and Gaming Solutions currently has active engagements in both Las Vegas and
Dallas the cities which currently have the Gilley's operations. It is our intent to make
first-hand observations at both of these facilities. Our comparable analysis can assist in
identifying the facility program narameters for the nronosed facilities as well as providing an
understanding of potential performance in terms of patronage levels and financial operations.
::'" . ............ .. . ._. _z._ <.ii�.. .... _.. .,
It is assumed that a primary goal of any new facility is to increase and diversify the event
activity available to both local residents and out-of-town attendees that generate economic
activity to the community. In this task. we will develop an estimate of utilization for the
proposed multi-purpose facility and the entertainment center which will be based on the
research conducted previously as well as the assumptions set forth in the report. The demand
estimate will summarize the number of events, average attendance and total attendance by
major type such as:
Elgin Symphony
* Cpncerts
• Family shows
* Community and civic/special events
* Others as appropriate
This estimate of utilization will serve as the basis for the financial pro forma for the
multipurpose facility as well as the entertainment center.
Based on the research and analysis conducted in previous tasks including. but not limited to,
input[from stakeholders. historical operating information. information on competitive and
comparable facilities. as well as the estimate of potential usage. we will develop a financial pro
forma for the proposed new multi-purpose facility and entertainment center.. The financial pro
forma will be dependent on a number of assumptions regarding the facility and its operations
which will be discussed in the report. For instance. assumptions will be made regarding
varioiks tiers of ticket prices depending upon the event, management approach. staffing
reauitements. rental rates. etc. Facility-related operating revenues and operating expenses to
be foriecasted include, but are not limited to,the following:
Operating Revenues Operating Expenses
•
Facility rental/admission • Salaries/wages and
• Tpcket sales benefits
• Eluent services * Contracted services
• Premium seating (if * Utilities
applicable) * Insurance
• Parking • Repairs and maintenance
• Other revenues as • General administrative
appropriate costs
* Marketing/promotion
* Capital reserves
• Other expenses as
appropriate
•
There will be two operating financial pro formas, one specifically for the multi-purpose facility
and the other for the entertainment center which will provide an estimate of net operating
income for the first five years of operation. Some of the expenses will be common to both pro
formas and these expenses shall be allocated based on utilization of the combined facilities. In
additiOn, we can provide you with a consolidated pro forma reflecting the revenues and
expenses of the proposed project in a holistic manner as well.
f'
We will the address whether the Hemmens Facility has outlived its useful life as a
multi-purpose facility. We will utilize infoimation and analyses previously performed on the
Hemnhens Center regarding the cost of updating the existing structure. Our comments will
include existing building infrastructure concerns as well as the advantages and disadvantage of
potentiially moving the location to Festival Park.
TarA, $ -- rernental impact on Gamin° Revvrtue
While we understand that the components within the expansion are being considered as a
stand-alone enterprise, we will comment on any potential impact on gaming revenue that may
result at the Grand Victoria Casino in Elgin. This will be based on our experience in other
jurisdibtions, which have added similar amenities to their existing gaming operations.
Task Prepare a Written Report and Conduct a Work Session
Upon icompletion of all research tasks, we will prepare a draft report which summarizes our
findings.and conclusions. Once the appropriate City Elgin and Grand Victoria Casino
representatives have reviewed the draft report, we will make any appropriate refinements and
issue the final report. We also plan to conduct a work session with the City Elgin and Grand
Victoria Casino as well as others deemed appropriate to discuss the report
_;r
�FUA ��r.E i(.7.;
i S
This section addresses the Project Team.
Pyr fTeam — Repa
With a icommitment to servicing clients throughout North America, HGS emphasizes hands-on,
client-Oriented consulting, based on our founding principles of integrity, accuracy and respect. My
goal is to provide cost-effective solutions in order to maximize value, while respecting the individual
needs Of each of our unique clients.
Our comprehensive approach ensures accountability through direct, absolute and exclusive
involvement in each project, including meetings,market research, analysis, report writing and
presentation.
1 perforim comprehensive market research as a foundation for all of our feasibility studies, focusing on
key demographic characteristics, tourism patterns, transportation infrastructure and other elements
affecting the ability of a project to attract demand. I work to develop facility recommendations that
match the identified needs of the market and the goals of the project developers.
Due to my extensive experience with a broad array of leisure industry projects, I need not rely solely
on published information in projecting future financial performance. My projections are based upon
years of experience working with leisure industry projects of all types and sizes that has given us
access tlo operating and market data not available to the general public.
HGS emphasizes hands-on, client-oriented consulting, based on our founding principles of integrity,
accuracy and respect.My comprehensive approach ensures accountability through the direct, absolute
and my!exclusive involvement of the principals in each project, including meetings, market research,
analysis, report writing and presentation.
•
•
.-
MV P.:ROCESS
I will attend not only introductory and sales meetings, but all meetings necessary for the successful
completion of each project.My hands-on, client-oriented practice doesn't stop there. As the President
of fiG$. I will remain in constant contact with the City of Elgin and Grand Victoria Casino
management, accessible to answer any questions that may arise during my involvement in the project.
arkeji7 Research:
In addition to the initial meeting, I will conduct all site visits, market research and fieldwork. thus
ensuring a complete understanding, of the unique parameters of each project and the competitive
environment in which it will operate.
Analvss:
With oVer 28 years of experience in the hospitality and gaming industries, I will also conduct all
analyses for each individual project, further guaranteeing- a comprehensive approach to analytical
process. My analyses are based on, not only published data, but detailed comparisons to the actual
financial statements of numerous existing hospitality operations throughout the country, which we
have ohtained on a confidential and proprietary basis while working directly with the operations.
Reporti Writinz:
After thorough analysis, I will prepare a comprehensive wiitten report, suitable for the unique
requireMents of each project, whether it be for financing, government submissions and/or public
relatioti. The final work product is readily accepted by lending institutions, developers and
goverment agencies, hotel and gaming companies.
P resentation:
Upon cOmpletion of each and every project, I am available for, and strongly encouraue, a follow up
meeting,to present their findings,recommendations and conclusions for the project and to answer any
questions the client may have. In addition I have attended numerous press conferences, as well as
provided expert witness testimony for a vast array of hospitality-related concerns.
•
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FL'E
4
It is our policy to estimate fees that are competitive, yet enable us to provide responsive services of
high quality. With HGS, you can expect superior, on-time service delivery that provides value
beyond the numbers and can lead to assisting in enhancing your overall strategic plan for the City
of Ei<uib as well as the Grand Victoria Casino.
Upon your authorization to proceed, we will begin the assignment. We anticipate our findings will
be available in 6 to 8 weeks, depending on the level of cooperation with the various data sources.
Our professional fees for this engagement are $45,000.
In addition to our professional fees, we are reimbursed for all travel, accommodations,
stenographic, administrative and such other out-of-pocket expenses incurred in connection with
the engagement. These costs will not exceed 15% of the professional fees. Progress bills
rendered during the course of our work are due and payable upon your receipt of our invoices. All
outstanding bills must be paid prior to the issuance of our final report.
It is out practice to receive a retainer prior to initiating work on a study. We are prepared to start
work immediately upon receiving your approval of these arrangements and a retainer in the
amount;of$15,000.
(111""
It is understood in accepting this proposal that neither our fees nor payment thereof is contingent
upon the results of our efforts.
These fees represent a significant discount from our standard rates, and we are pleased to extend
this cost-saving feature to you in recognition of the importance of the City of Elgin and the Grand
Victoria' Casino as a client of the Firm.
If you require us to attend meetings and make presentations beyond our scope of services, we will
obtain your approval and charge you separately for our actual hours of professional time incurred
in preparing for and attending such meetings. Our professional time will be billed at our standard
hourly rates plus travel and incidental expenses.
CONTRACTUAL C!'ii r IONS
For engagements of this nature there are certain additional limiting conditions and requirements
promulgated by Industry Standards and our Firm, which are delineated as follows.
Any reports or analysis prepared by JIGS in connection with this assignment may not be referred
to or quoted, in whole or in part, in any registration statement, prospectus, public filing, sales and
marketing brochure, loan documents, or any other agreements or documents, without our prior
review and our prior written consent, which will not be unreasonably withheld.
I
•
Any analysis of financial projections in connection with this assignment will not constitute an
examination or any form of assurance by HGS; therefore in connection with this assignment we
will not express an opinion or any other form of assurance on the projections and budgets. There
will usually be differences between projected and actual results, because events and circumstances
frequently do not occur as expected, and those differences may be material.
Prior tO issuing our report in connection with this assignment, we will require the City ofElgin and
Grand Victoria Casino sign this engagement letter in the space provided below, acknowledging the
terms of our arrangement and their responsibility for payment of our fees.
In the event HGS is requested pursuant to subpoena or other legal process to produce its
documents relating to this engagement for the City of Elgin and Grand Victoria Casino or testify in
judicial or administrative proceedings to which HGS is not a party, The City of Elgin and Grand
Victoria Casino shall reimburse HGS at standard billing rates for its professional time and
expenses, including reasonable attorney's fees, incurred in responding to such requests.
All information obtained by HGS during the course of this engagement shall he used exclusively
for purposes of this engagement, and except to the extent that law requires disclosure, shall be kept
confidential. if any person or entity requests or subpoenas any information or materials relating to
4111)
this engagement that is in the custody or control of HGS or its agents or representatives, HGS
shall inform the Client of the request as soon as is practicable. if the Client requires HGS to take
any legal action to seek protection against the requested disclosure, Client shall either retain
counsel to represent HGS in those proceedings suitable to HGS,or allow HGS to defend itself, and
shall indemnify HGS for its reasonable costs and expenses, including attorney's fees, incurred in
the actiOn. Nothing in this Agreement shall prohibit or limit either party's use of information
(including, but not limited to, ideas, concepts, know how, techniques, and methodologies) (a)
previously known to it, (b) independently developed by it, (c) acquired by it from a third party
which Was not under any obligation to the Disclosing Party not to disclose such information, or(d)
which iS or becomes publicly available through no breach of this Agreement by the Recipient.
We will have no responsibility to update our report for events and circumstances occurring after
the date of our report.
It is understood in accepting this proposal that neither our fees nor payment thereof is contingent
upon the results of the study.
•
We are enthusiastic about this opportunity to work with you and the other members of your
management team. We believe that you are committed to a decision to move the City of Elgin
and Grand Victoria Casino to the next level of growth. Beginning this evolution with a
documented market demand study is a necessary first step to a successful end result and we
commend you on your foresight. We are convinced that this relatively minor investment up front
will mere than pay for itself in the long term. If you have any questions regarding this
engagement, please contact me directly at either(760) 992-5349 or (612)251-1343.
Very truly yours.
T1.A IV!) (Ai/NG NOU
• V---cri
v
John I. r?epa
PresidOnt
Accept d by:
Title:
Date:
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