HomeMy WebLinkAbout2013-10-28 13-355 ORDERCOUNCIL ACTION
Item No. 13-355
Date: October 28, 2013
Item/Subject: ORDER, Authorizing Execution of Second Amended and Restated Indenture of
Lease - Bangor Historic Track, Inc.
Responsible Department: Legal
Commentary: This Order, if approved, will authorize the execution of a Second Amended and Restated
Indenture of Lease between the City and Bangor Historic Track, Inc. The City and Bangor Historic Track,
Inc. (BHT) are parties to a 2006 lease wherein BHT leases real estate from the City to operate a gaming
and harness racing facility. BHTs parent company, Penn National Gaming, Inc. (PNG) has approached
the City for a technical amendment to the lease. The reason is that PNG is separating its real estate
holdings from its gaming operations in connection with the creation of a Real Estate Investment Trust
(REIT). The effect of this is that Penn essentially becomes two publicly traded companies, a gaming
company and a real estate company.
In order to do this the lease between the City and BHT would need to be amended because it does not
make any distinction between the rights and obligations of a gaming entity and those of a real estate
entity as currently BHT is essentially both. If approved, the amendment to the lease will not place the
City in a lesser position than now and will not result in any change in the day to day operations of the
facility.
However, there are provisions under the current lease that are of interest to both parties to negotiate.
Under the terms of the 2006 lease, PNG is required to negotiate table game revenues to be paid to the
City, which is currently a statutory 2%. Further, PNG wishes to decrease the number of table games at
the facility from 1,000 to 900. The proposed amended lease provides that these two issues (the
percentage of net table game and the total number of slot machines) will be negotiated by the parties by
July 1, 2014. This item was reviewed in executive session on October 21, 2013.
Department Head
Manager's Comments: Cid Vh - ( & Q)
City Manager
Associated Information: Council Resolve
Budget Approval:
Legal Approval:
Introduced for
_
Passage- Consent
First Reading
Referral to Government Operations Committee
Page _of_
Finance Director
City Solicitor
13-355
OCTOBER 28, 2013
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�N� s, _ Assigned to Councilor Nealley
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(TITLE.) ORDER, Authorizing Execution of Second Amended and Restated Indenture of
Lease - Bangor Historic Track, Inc.
WHEREAS, the City and Bangor Historic Track, Inc. are parties to an Indenture of Lease dated
June 24, 2006 for the operation of a gaming and harness racing facility; and
WHEREAS, the parent company of Bangor Historic Track, Inc., Penn National Gaming, Inc., is
contemplating a transaction which will separate its owned and leased real estate from its
operating assets (Separation Transaction); and
WHEREAS, as part of the Separation Transaction Bangor Historic Track, Inc. will merge into the
newly formed Bangor Historic Track, LLC and assign the lease to GLP Capital LP, the real
estate company; and
WHEREAS, Bangor Historic Track, LLC will continue to operate the gaming and harness racing
operations; and
WHEREAS, an amendment to the 2006 Indenture of Lease between the City of Bangor and
Bangor Historic Track, Inc. is necessary to accomplish this matter.
By Me Oty Council of the Oty of Bangor.
ORDERED, That Catherine M. Conlow, City Manager is hereby authorized to execute a
Second Amendment and Restated Indenture of Lease between the City of Bangor and Bangor
Historic Track, Inc. Said lease shall be substantially the same for as attached hereto and in a
final form as approved by the City Solicitor of Assistant City Solicitor.
IN CITY COUNCIL
October 28, 2013
Motion made and seconded for Passage
Pas d
CITY &ERK