HomeMy WebLinkAbout2006-05-22 06-195 ORDERItem No, OB 195
Date: 5-22-06
Item/Subject Order, Authorizing the City Manager to Uecute a Second Amendment to a
Development Agreement with Bangor Historic Track
Responsible Department: City Manager/Legal
Commentary:
Fur some time, staff has been working with Penn National toward locating the permanent gaming
facility on Main Street between Dutton and Lincoln, rather than in Bass Park. Progress has been
made toward this end. However, relocating the permanent facility required certain Oianges and
amendments to the ewstirg development agreement between the City and Bangor Historic Track.
This has required lengthy negoWnlons, and the Council has been regularly advised of their status.
We are now at the point where an amended agreement can be approved by the Council. This
approval is subjectW Bill acquisition of the privately owned parcels located on Main Street within
the so-called Riverside Block on or before December 31, 2006.
Among the charges are: an Increase in Ne level of inwounent to be made by Bangor Historic Track
from a minimum of $30 million to minimum of $70 million; elimination ofthe requirement that BHT
provide conference and meeting space; revising the language relating to the hotel from a
requirement once certaln conditions are met Wan allowance for negotiations regarding a hotel once
certain conditions are met; a requirement that BHT confer with the City regarding one exterior
design of their facilities; the potential to speed the estimated schedule for construction of the
permanent fatuity with demolition to begin within 24 months and construction within 24 months of
the start of demolition; and an agreement to jolntly develop a long range plan forthe harness racing
barns.
At this point, we would recommend that the Council approve Nis Amended Development
Agreement. � nnnn
L�III(.GMaudlin—
Department Head
City Manager
Assodatad Information:
Budget Approval: AAU�7
Finance Director
Legal Approval:
Soliciror
Introduced for
_ passage
_ First Reading page _ of _
Referral
06 195
Anipedm Cauncilm F=ivgtw May 22, 20106
CITY OF BANGOR
(MILE.) ORDER, Authorizing the City Manager to Execute a Second Amendment to a
Development Agreement with Bangor Historic Track, Inc.
WHEREAS, the City and the predecessor to Bangor Historic Track, Inc. (BHT) entered into a
Development Agreement dated October 31, 2003 under which BHT is required to
develop a portion of Bass Park; and
WHEREAS, this agreement was subsequently amended on July 5, 2005 W authorize BHT to
establish a temporary gaming facility, and to adjust certain dates and other
requirements of the original agreement; and
WHEREAS, under existing agreements, BHT has an obligation to develop a permanent gaming
facility at Bass Park; and
WHEREAS, the City has identified a number of concerns regarding locating the Permanent
facility in Bass Park including the potential necessity of relocating the Bangor State
Fair, a negative impact on parking availability for visitors to events at the Bangor
Auditorium anti CNk Center the potential elimination of Bass Park as a possible
location for a new arena; and possible traffic impacts; and
WHEREAS, as a result of these considerations, the City has worked with BHT to investigate
other possible locations near Bass Park for the construction of the Permanent
Gaming Faculty; and
WHEREAS, BIR has proposed locating this facility on Main Street between Lincoln and Dutton
Streets, the Riverside Block so-called; and
WHEREAS, the parties agree that this location would avoid the potential negative impacts
associated with constructing this facility at Bass Park; and
WHEREAS, it is the intention of BHT to move forward with the acquisition of the altemate site
on Main Street subject to amending various agreements with the Gty to allow this
alternative to proceed; and
WHEREAS, the Oty has determined that deaelopment on the Rmerade Block is in the best
interests of the citizens of Bangor;
NOW, THEREFORE, BE TT ORDERED BY THE CITY COUNCEL OF THE CITY OF BANGOR
THAT
The City Manager is hereby authorized to execute, in a form substantially the same as is
attached hereto, a Second Amendment to the Development Agreement with Bangor Historic
06 195
Thick, Inc. subject to and conditioned upon the acquisition by Oangor Historic Tack, Inc. on or
before December 31, 2006, of the privately owned parcels located within the Riverside Block,
i.e., the area hounded by Main, untold, and Dutton Streets.
The Second Amendment to the Development Agreement shall be in a final form as approved by
the City Solicitor or Assistant City Solicitor.
06-064o, 4M eriq
Assigned to Councilor
CITY OF BANGOR
(I'll ORDER, Authorizing the City Manager to Execute a Second Amendment to a
Development Agreement with Bangor Historic Track, Inc.
WHEREAS, the City and the predecessor M Bangor Historic Track, Inc. (BHT) entered into a
Development Agreement dated October 31, 2003 under which BHI" is required to
develop a portion of Bass Park; and
WHEREAS, this agreement was subsequently amended on My 5, 2005 to authorize BHT to
establish a temporary gaming facility and to adjust certain dates and other
requirements of the original agreement; and
WHEREAS, under existing agreements, BHT has an obligation to develop a permanent gaming
facility at Bass Park; and
WHEREAS, the City has identifed a number of concerns regarding locating the permanent
facility In Bass Park including the potential necessity of relocating the Bangor State
Fair, a negative impact on parking availability for visitors to events at the Bangor
Auditorium and Civic Center; the potential elimination of Bass Para as a possible
location for a new arena; and possible traffic impacts; and
WHEREAS, as a result of these considerations, the City has worked with BHT to investigate
other possible locations near Bass Park for the construction of the Permanent
Gaming Facility; and
WHEREAS, BHT has proposed locating this facility on Main Street between Lincoln and Dutton
Streets, the Riverside Block so-called; and
WHEREAS, the pardes agree that this location would avoid the potential negative impacts
associated with constructing this facility at Bass Park; and
WHEREAS, it is the intention of BHT to move forward with the acquisition of the alternate site
on Main Street subject to amending various agreements with the City to allow this
alternative to proceed; and
WHEREAS, the City has determined that development on the Riverside Block is in the best
Interests of the citizens of Bangor;
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR
THAT
The City Manager Is hereby authorized to exavte, in a form substantially the same as Is
attached hereto, a Second Amendment to Me Development Agreement with Bangor Historic
Track, Inc. subject to and condi coned upon the execution on or before May 26, 206 of
Purchase and Sale Agreements by and between Bangor Historic Track, Inc. and L & C
Corporation and Kenduskeag Yacht Club providing her the acquisition by Bangor Historic Track,
Inc. of the privately owned parcels located within the Rhrerside Block, so-called, i.e., the area
bounded by Main, Lincoln, and Dutton Streets Bangor, Maine, said acquisition to occur on or
before December 31, 2006.
The Second Amendment to the Development Agreement shall be in a final form as approved by
the City Solicitor or Assistant City Solicitor.
IP CITY COUNCIL
May 22, 2006
Notion Bade and Seconded
for Passage
Steve Snyder, Vice President
for Corporate Development
for Bangor Historic Track,
thanked the Staff for their
bard wrk and star" that the
new fatality should be
completed by 2009, and
stated that the new
facility should be completed
by 2009, byt perhaps as
early as 2008
Motion Bade and Soured"
to Amend by Substitution
Passed
Notion Bede and Seconded for
Passage as Amended
Paased
CITY CLINK
u nb-195
O ANSN
arrfxa dnthoriaiva the cit. NanaBar to
Execute a Second Amendment to a Development
Agreement with Bannor Historic Teck, Inc.
Aalpep bcouoeDot
Attachment to Item Number 06195 5-22-06
Second Amendment to Development Agreement,
Bangor Raceway Initial Lease Agreement, and Indenture of Final Lease
The City of Hanger (hereinafter the "City"), a municipal corporation located in Bangor, County
of Penobscot, State of Maine, and Bangor Historic Track, Inc. a Maine cooperation (hereinafter
the "Developer"), hereby agree to this Second Amendment m Development Agreement
("Second Amendmesin as of this _day of , 2006 on the following terns. Penn
National Coming, Inc, a Pennsylvania corporation with a place of business in Wyomissing,
Pennsylvania CTNG") is executing and delivering this Agreement for the limited purposes of
evidencing its commitment set forth in Section 9.
WHEREAS, the City and the predecessor and assignor of Developer entered into a certain
Development Agreement for the Development of a Portion of Bass Park, dazed October 31, 2003
(the "Development Agrcem iof), a certain Bangor Raceway Initial Lease Agreement dated
October 31, 2003 (the "Initial Lase"), and a certain Indenture of Final Lease dated as of
October 1, 2003 (the `Final Lease'), as amended by a certain Amendment to Development
Agreement, Bangor Raceway Initial Lease, and Indenture of Final Lease dated as offuly 5, 2005
(the "Furst Amendment") respectively (the Development Agreement, Initial Lease, and Final
Lease, all as Amended by the Fimt Amendment shall be rebated to herein collectively as the
"Original Documents," and capitalired terms not otherwise defined herein shall have the
meanings assigned to them in the Odgned Documents); and
WHEREAS, the tam of the Initial Lease has commenced (and the term of the Final Lease has
not yet commenced) and Developer, as Tenant under the Initial Lease, as amended, is leasing a
Portion oflhe property knowa as Bass Park as described in the Initial Lease (being known herein
as the "Limited Portion of Bass Park") and property known as "Miller's" as is also described
to the Initial Lease (together, the Limited Portion of Bass Park and Miller's shall be known
herein as the "Interim Premised; and _
WHEREAS, contemporaneously herewith the City and the Developer are executing and
deliveting (i) an Amended and Restated Bangor Raceway Initial Lease Agreement amending
and winning the Initial ]ease C`Amended and Restated Initial Leaae') attached herein as
B)IBIfin A, and (it) an Amended and Restated Indenture of Final Lease, amending and
restating the Final Lease C'Amended and Restated Final Lease") attached hereto as EXHIBIT
B; and
WHEREAS, Bre Developer commenced comme tial operation of the Temporary Curring
Facility at the Interim Premises as of November 4, 2005; and
WHEREAS, the City has identified a number of concems regarding locating the Permanent
Gaming Facility in Bass Park including the potential necessity of relocating the Bangor State
Fair; a negative impact on parking for visitors to events and activities at the Bangor Auditorium
and Civic Center; the potential elimination of Bass Park as a possible location f a new some;
and passible traffic impacts on adjacent residential neighborhoods; and
WHEREAS, as aresult of Nese considaatioru, the City has encouraged Developer to investigate
other possible locations near Bass Park for the construction of the Permanent Gaming Facility;
and
WHEREAS, subsequem In Nis request, Developer has provided to the City an alternative
proposal for the development and operation of a portion of the real property located East of Main
Strut between Lincoln and Dutton Streets in Bangor, Maine as described on EXHIBIT C
armexed herem and made a part hereof (the "Rivesnide Block") as a mcino facility, with an
additional parking area (the "Parking Area") to be located on City-owned land at Bass Park Naz
was not part of the original premises under the Initial Lease, such Parking Area generally
depicted on EXHIBIT D Has Riverside Block and the Parking Area, together with the Limited
Portion of Bass Park shall be refined to herein as the "Premises'); and
WHEREAS, the parties agree Nat this location would avoid the potential negative impacts
associated with constructing the Permanent Gaming Facility in Bass Park while providing for a
facility located in close proximity an the existing hamess racing oval; and
WHEREAS, dre parties hereto acknowledge Nat, except for a portion of City-owned land
adjacent to the nearby railroad right of way and except for two parcels roughened no Developer
by Erin, Inc. on or about October 31, 2005, the Riverside Block site is not currently owned by
Developer or the City; however the Developer and the City are currently negotiating with various
parties regarding Ne purchase of the Riverside Block in order to obtain it as the location for the
operation of a memo and related facilities; and
WHEREAS, the City has determined thin private redevelopment and/or renovation of the
Riverside Block, including the portion of land owned by the City adjacent to the nearby railroad
property as shown on EXHIBIT C, in accordance with the provisions hereof would best serve
the interests ofNe citizens of Bangor, and
WHEREAS, the City Lou determined that the Developer's proposal will serve the interests of the
citi sru ofBaregor, and
WHEREAS, the City and Developer wish to fuller clarify, modify and amend the terms of the
Original Documents, as amended, as described herein.
NOW THEREFORE, the City and Developer in consideration of the promises herein and other
good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
intmdmg to be legally bound, agree as follows, effective as of the dale hereof
1) Status of Original Documents and Effectiveness of Semvd Amendment. (a) The City
and the Developer acknowledge and agree that the Original Documents are in full force and
effect as of the date hereof and that both the City and the Developer have complied in all
menerial respects with, and are currently in compliance in all material respects with, the terms,
conditions and other requirements of the Original Documents.
(b) Except as provided below, the Original Documents shall remain in full fume and
effect and this Second Amendment, including the amendments contained in the gummed and
Restated Initial Lease and Amended and Restated Final Lease shall not be effective until and
unless the Developer has acquired right, title and interest in and to the Riverside Black to enable
development of the Permanent Gaming Facility as contemplated by this Second Amendmeat and
the Amended and Restated Final Lease. Fallowing Developer's acquisition of right, title and
interest in and to the Riverside Block to enable development of the Permanent Gaming Facility
on the Riverside Block, if any ever of force majeure (as that term is defined in the F'us[
Amendment except that the references therein to the Temporary Gaming Facility and Miller's
shall refer heremm the Permanent Gaming Facility and the Riverside Block, respectively) occurs
which shall prevent Developer from securing all licenses and permits necessary for Developer's
development and construction of the Permanent Gaming Facility on the Riverside Block prior to
December 31, 2006, this Second Ameadment, together with the amendments contained in the
Amrnded and Restated Initial Lease and Amended and Restated Final Lease shall automatically
terminate and be of no further force or effect. In the event ded the City does not receive said
notice of force m jeure by December 31, 2006, then this Seemed Amendment shall automatically
become fully effective. Extension of the December 31, 2006 deadline may only be effected by a
written agreement executed and delivered by the Developer and the City.
2) Premises to Include the Riverside Block.Under the Development Agreement, as
amended, any and all references to that portion of the "Premises" to be used as the location of
the Permanent Gaming Facility (as defined below) are hereby amended to mean and refer to the
Riverside Block, which shall be developed and operated by Developer as a Permanent Gaming
Facility to be leased and operated governor: to Ne terns of the Amended and Restated Final
Lease.
3) Development f the Permanent Groneirm Facility h Riverside Edgek (a) It is agreed
that Bass Park is no longer to be used as the site of the Permanent Gaming Facility with the
exception of use for guest and employee parking in the Parking Area and use of that area as a
temporary, constmction staging and lay down even in monmrion with and only during the
construction of fie Permanent Gaming Facility. MI of the obligations of Developer under the
Original Documents that pertain to the development, construction andfor renovation, and
operation of the Permanent Gaming Facility m Bass Park shall pertain hereafter to the
developmeaS construction amfor renovation, and operation at the Riverside Block as the site of
a facility containing no fewer than 1,000 Gaming Machines (the "paramount Gaming
Facility"). No portion of Bass Park shall be used w compaction with the Permanent Gaming
Facility other than the crosshatched Parking Area portion depicted on EXFFBIT D hereto, and
all cmrrem and future rights of Developer in and to any other portions of Bass Pork for purposes
of development of a Permanent Gaming Facility are busby terminated and released, except for
the parking and temporary construction staging was described above. Developers rights in and
m the limited Portion of Bass Park for we for Farmers racing operations me governed by the
Amended and Restated Initial Lease and the Amended aM Resated Final Lease.
(b) Developer shell expend a total of at least $70,000,000 on capital expenditures for the
development of the Permanent Gaming Facility at the Riverside Block, inclusive of arquisition
cost provision of a least 1,000 Gaming Machines, demolition of stmrnmes now located on the
Riverside Block site, and the vests of relocation of existing Off Track Betting facilities currently
located at the renovated grandstand mea of Bass Pmk.
O All obligations of Developer under the Original Documents relating to (i)
development of conference center space, (ii) development of Israelis), and (iii) a collapsible open
it stage are hereby terminated in their entirety and Developer shall have no further obligations
r commitments in connection therewith. The definition of "Permanent Gaming Facility" set
forth above shall not include these items (i), (it) and (iii). If Developer completes three
consecutive years in which (i) Cross Slot Machine Income (as defined in the Amended and
Restated Final Lease) exceeds $120,000,000 and (u) during which period the City is not required
to make any Cost Sharing Payments tinder the provisions of Article )MITI of the Amended and
Restated Final Lease, and (iii) flu City commie either M replace the current Baagor Auditorium
with a new facility located in Bass Park or to substantially renovate the existing Bangor
Audimdum now on Bass Park, Developer agrees to enter into goad faith negotiations for the
construction of a 100 -room mid-level, limited service, handed hotel in the area of it Permanent
Gaming Facility of a nature and quality that meets or exceeds the arnchise requirement
applicable to a Hilton Carden dint, provided, however, that (i) the City add Developer we able to
identify a site for the hotel and (ii) development of the hotel is cmWitioned upon
contemporaneous development of a new auditorium at Bass park. The City and Developer
acknowledge that there will be no space available for hotel development et the Riverside Block
under the currently contemplated plans of Developer for the Permanent Gaming Facility.
Nothing in this document or either of the Leases shall be deemed to (i) obligate City m replace or
powder replacing the current Bangor Auditorium, which decision shall be in City's sole
discretion and/or (ii) grant any exclusive right, including without Uniation, the right to
argotime with City, gated to hotel development m Developer or any of it affiliated parties or
(iii) obligate the Developer to acquisition of a site for a hotel and/or development of a hotel
except upon terms and conditions mutually agreed upon by the Developer and the City.
(d) As promptly as reasonably possible after the signing of flys Second Amendment and
prior to any permit or site applications being submitted to the City of Bangor Planning Board or
any other some or local permit issuing authority, Developer agrees to meet with and confer with
City, or representatives designated by City, regarding the design of the Permanent Gaming
Facility and any associated improvement m be constructed on the Riverside Block This
meeting and review by City shall be in addition to and not in lieu of or as a substitute f any
right of review and site plan approval that City shall have under it municipal pemdtting
authority and/or by and through rise City of Bangor Planning Board. This meeting stall include
preseaation by Developer of Developer's preliminary site plan and design of the Permanent
Gaming Facility and any rented improvements, including elevation drawings and perspective
renderings and information of exterior treatments. Developer is not obligated to implement
suggested design changes however, Developer agrees m carefidly consider any suggestions
made by City or City's representatives regarding Developer's preliminary site plan and the
exterior appearance of the proposed Permanent Gaming Facility and any related improvements,
4) AdmArriestat of Dart permanent German FaciEW (a) The parries acknowledge that the
comme lament date for the tam of the Amended and Restated Final Lease is adjusted by the
force ofA Bended and Restated Final Lease attached hereto.
(b) The Premises under the Amended and Restated Final Lease shall be those lots,
Foods and other interest in real estate depicted and described therein.
5) Cooperation and Financial Assistance. (a) The City shall, during the pertaining,
approval and contraction phases of the Permanent Gaming Facility, reasonably cooperate with
Developer to facilitate access to the Personnel Gaming Facility, subject, however, to Maine
Department of Transportation ("MDOT"), Maine Department of Environmental limitations
(-MDPP'J and other applicable site, permit and engineering requirements. The City and the
Developer shall use reasonable efforts to coordinate the timing and insallation/conswction of
all offsite improvements, if any, with Developer's work on the Permanent Gaming Facility as set
forth in Section 7(a). The City agrees to take all necessary action in discontinue all streets or
other public ways within the Riverside Block on a timely basis in order to facilitate the timely
development of the Permanent Gaming Facility in accordance with Developer's development
and construction schedule; provided, however, the[ Developer acknowledges that discontinuance
is a summarily controlled process subject to intervention and appeal beyond the control of the
City.
(b) The parties acknowledge that the development of the Temporary Gaming Facility
and the Permanent Gaming Facility is an important economic development project for the City.
Provided Developer is not in default of this Second Amendment, the Original Documents, as
amended, the conceded and Restated Initial Lease or the Amended and Resorted Final Lease, the
City shall not through any action taken by the City as a body corporate and politic acting by and
through the City Council, prevent the Developers performance of its obligations hereunder in
under ted Amended and Restated Initial Lease and/or the Amended and Restated Final Lease.
(c) Notwithstmdmg styling to the contrary, herem, under no cin aornces shall the
City be in default of its obligations under this Development Agreement (including without
limitation this Section 5), the Amended and Restated Initial Lease action the Amended and
Restated Final Leese fa actions taken (or not mken) by the City as a body cooperate and politic
acting by and through the City Council, if acting in good faith in the performance of its dories
and obligations as arepresenmtive body of the citizens of Burger.
(d) The Development Agreement (including without limit this Section 5) shall not apply
to and under to circumstances shall the City be deemed in default of its obligations under the
Development Agreement, this Section 5, the Amended and Restated Initial Lease avdlor the
Amended and Restated Final Lease due to or related in spy aces or omissions by any individual,
group, or entity associated with, employed by or affiliated with the City except for official action
undertaken under authority of, or at the direction of, the City Council (including action by
two,".o
individuals acting under color of such authority in the case of state regulatory or licensure
Proceedings).
6) Transfer of Title to dre Permanent Combat Facilitv. (a) As a condition precedent to
commencement of commercial operation of the Permanent Gaming Facility (but subject to and
without any modification whatsoever of the unconditional obligation of Developer, as described
n the First Amendment, to commence comme tial operations no later tiara the Permanent
Gaming Facility Termirafion Date), the Developer shall convey, or shall cause to be conveyed,
or the City by quitclaim deed with covenant, good and insurable title m the land upon which the
Permanent Gaming Facility is situmed, limited to the land upon which the gaming operations are
located (tire "Riverside Block Portion of the Premises") and exclusive of any other land, and
further exclusive of my buildings and improvements located on the Riverside Black site, subject
W (i) the Amended and Restated Final Lease, and (it) the encumbrances, restrictions, exceptions,
limitations and conditions described in the due diligence materials to be provided by the
Developer to the City in accordance with the requirements of this section and teat are acceptable
to the City as provided in this subsection (a). To the extent permitted by state law, the Developer
shall retain ownership of all buildings, structures and other improvements located at the
Riverside Block. Developer shall execute and deliver all necessary deeds, documents and
cer[ifirstes related to same and shall be responsible for all closing costs related thereto, including
without limit City's owner's title insurance premiums, transfer nixes, recording fees, and any
other fees or charges related to the honsfer. Prior to the transfer to the City of the Riverside
Block Portion of lire Premises, the Developer shell make available to the City copies of all
surveys, environmental assessments, title reports, and other due diligence materials relating to
The Developer's acquisition of the Riverside Block, The Developer has provided to City, and the
City is currently reviewing the foregoing materials and shall advise the Developer of any
encumbrances, restrictions, exceptions, limitations or conditions that are not acceptable to the
City at Least ten (10) business days prior m the Developer closing on the Riverside Black Any
matters contained in the materials provided by the Developer and not identlfled by the City as
acceptable on or before the date the Developer closes upon the acquisifica of the Riverside
Block Portion of the Premises, shall be deemed "acceptable" by the City for purposes of this
subsection (a). Developer shall take reasonable steps to remedy or cure any matters that are
identified as unacceptable by City. The City reserves the right to further object to any
encumbrances, restrictions, exceptions, hnutafions or conditions that arise or are identified
subsequent to the effective date of any such due diligence materials. Developer shall, prior to
any such closing, at Developer's expense, cause any environmental reports (e.g. Phase I or Phase
lI ESA reports) to be updated and provided to the City in such form and fount that the City may
nee advantage of any "safe }arbof' Protections available to real property owners under federal
or stale environmental laws, regulations, or ordinances.
(b) The paries acknowledge that pursuant m the First Amendment,
contemporaneously with commencement of commercial operation of the Permanent Gaming
Facility, Miller's shall be roomweyed by the City to the Developer by municipal quitclaim deed,
conveying the City's title to the land, together with any title the City may have in and m the
buildings, structures and tuber improvements located on the Miller's Site, subject to only such
encumbrances and restrictions as existed at the time of conveyance to the City by the Developer
i�151 u
and any additional encumbrances and restrictions that have been created, agreed to or suffered by
Developer. The City shall execute and deliver all necessary deeds, documents and certificates
related to the recorrveymme of Miller's to the Developer. The Developer shall be responsible for
all closing costs related thereto, including all transfer taxes, wording fees, and any other fees or
charges related In the transfer.
7) Construction of the Permanent Gamine Facility. (a) Developer agrees Rist following the
execution and delivery of Rus Amendment, it shall use commercially reasonable efforts m
acquire the Riverside Block site and complete construction of the Permanent Gaming Facility.
Completion of construction of the Permanent Gaming Facility at the Riverside Block site shall
otherwise be governed by the terms of the First Amendment. The parties hereby confirm the
cora ming unconditional right of the City under Section 4(c) of the First Amendment to
terminate the Original Documents as amended hereby and the Amended and Restated Leases.
'Fms Permanent Gaming Facility Termination Date forthe purposes ofthe City's right is June 30,
2013.
(b) Without modification of the foregoing subparagraph, Developer hereby agrees
(subject to the previsions regarding force majeure set forth in section 7(e) below) that it shall, by
April 1, 2007 (the "Demolition Start Date"), cormmeace demolition of existing improvements at
the Riverside Block site as preparatory sits work for the construction of the Permanent Gaming
Facility. Developer further agrees that within twenty-lbur (24) months of the Demolition Stmt
Date (such daze being hereinafter referred to as the "Permanent Gaming Facility Completion
Date') Developer shall have completed construction of the Permanent Gaming Facility sufficient
to have received a certificate of occupancy from the City. The foregoing Demolition Start Date
and the Permanent Gaming Facility Completion Dam shall be subject, however, to the following:
(i) the provisions regarding events of fume majeure ad toed in section 7(c) below; (u) delays
caused by federal, state or local regulatory agencies or authorities whir jurisdiction over the
permitting of the improvements constituting or associated with the Permanent Gaming Facility,
mclud r g without limiting the generality of the foregoing MDOT and MDBP; and (iii) delays
initiated by Developer resulting from a pending or threatened Law Change. Developer sed City
shall endeavor to inform the other of any pending or threatened Law Change of which it becomes
aware. Failure to w inform the other party shall not constitute a breach of this Agreement.
Developer and City agree m cont as to such pending or threatened Law Change regarding the
strength of support for the pending or threatened Law Change and each party's assessment of
likelihood ofenamnent of the pending or threatened Law Change.
(c) The Demolition Start Date and the Permanent Gaming Facility Completion Date
shall he tolled during the pendency of any of the conditions or events specified in section 7(b)(i)-
(ui) massive:
(i) Force majam as defined in the First Amendment. In the event of
the occurrence of an event of Force M jams, Developer shall provide prompt written
notice to City providing demils of the nature and extend of Ne occurrence, in no event
later tun thirty (30) days of the Developer first having knowledge of the occurrence of
the event of Force Mjeme. Should no written notice be -provided, no event of Force
Majeure shall be deemed to have occurred.
(u) The unnerved of any law, rule or regulation, or other regulatory
action ("Law Change"), that results in any increase in airy tares, charges, fees, duties,
levies and other assessments imposed upon "gross slot machine income" (as defined at
8 M R.S.A. § 1001(21)), "adjusted gross slot machine income" (as defined at 8 M.F.S.A.
§ 1036(1)), or otherwise imposed upon or measured by reference to revenue or income
generated through operation of Gaming Machines by the State of Maine or any political
subdivision or agency or monumentality of the State of Maine hegnrdlem of the purpose
for such imposition), including, without fuming the generality of the foregoing, the terms
"gross slot machine income" and "net slot numbine income" as defined in LD 1748
currently under consideration by the Maine Legislature, where such increase,
determined by the Developer, on an individual or combined basis, exceeds $1 million per
year. Developer's dembrummation of operating margin shall be subject to the dispute
resolution provisions set forth below.
(iii) The enactment of any Law Change that results m (A) a reduction
in Developers annual operating revenue, (B) en inereassice m Developer's operating
expenses, and/or (C) an increase in Developer's capital expenditures where such change,
on an individual or combined basis, exceeds $1 million per year as determined by the
Developer and with respect to which Developer reasonably demrmines that such change
or changes will, individually or be the aggregate, result in Developer but generating an
operating margin at the Permanent Gaming Facility at Is= equal to the average operating
margin generated at other similar or comparable memo facilities currently owned and
operated by Perm National Gaming, Inc., or it subsidiaries over the last three full fiscal
years preceding the effective date of such law, role, regulation, or regulatory action.
Developer's determination of operating margin shall be subject to the fallowing dispute
resolution provisions.
Tlu Developer shall submit its determin radon mder section 7(c)(ii) or 7(c)(iii), together
with a resonantly detailed statement setting forth the basis for the determination, to the
City ("Developer Determination Statemem") within 90 days following the effective dote
of each Law Change. The Developer Determination Statement will calculate the effect of
all law Changes upon its projected ar mad operating revenues, operating expenses and
capital expeuditres and calculate the Developer's projected operating margin m the
Permanent Gaming Facility. Such determination shall be final and binding upon the
Developer and City unless the City notifies Developer of any objections on such
Developer Determination Statement within 30 days following receipt thereof. Any such
objection notice shall specify, in reasonable detail, the respects in which the Developer
Determination Statement is claimed to be incorrect.
If the parties are unable m resolve the dispute within thirty (30) days after Developer's
receipt of the City's objection notice, then the dispute shall be submitted in a firm of
audit professionals mutually acceptable to both partes ("Audit Professionals"). If both
parties output agree on Audit Professionals within thirty (30) days, they each party shall,
within fiflam (I5) days, select one (1) independent firm of Audit professionals, and such
two (2) Audit Professionals shall together select a third firm of Audit Professionals,
o. van
which third fam slid[ be the Audit Professionals who shall resolve the dispute. If either
party fails to select its Audit Professionals within said fifteen (15) day period, then the
Audit Professionals selected by the other party shall resolve the dispute. The Audit
Professionals shall be entitled to review all records relating m the disputed items. The
determination of the Audit Professionals shall be final and binding upon both parties ned
the Audit Professionals' expenses shall he home by the party against wham the decision
is Tendered; Provided that, if more than one item is disputed, tlu expenses shall be
apportioned equitably according to the number of items decided against each party and
the amounts involved. Tlse foregoing detemdnations and methods fox such
determinations and dispute resolution shall not apply to or be used for any purpose under
either of the Leases and shall not be binding upon the City or Developer fm any purpose
other than for deterudnations of whether or not a force majeure event exists and pemdts a
tolling of the Demolition Start Date and/or the Permanent Gaming Facility Completion
Date.
(iv) Notwithstanding the foregoing, the Demolition Start Date shall be automatically
extended until April 1, 2008 in the event a portion of the Premises remains occupied by
either Carolyn Fish, dlbm BE/MAX Advantage Realty Group and/or Pella Window and
Door of Boston, or either of then successors or assigns, after December 31, 2006,
th no event, however, may the Demolition Start Date nor the Permanent Gaming Facility
Completion Date be extended for any reason whatsoever (including events of force m jeune, Law
Change, and/or permit delays) beyond the Permanent Gaming Facility Temdration Date, that
being June 30, 2013.
(d) Nothing in this Second Amendment stall affect, modify, or eliminate City's rights
to immune the Original Documents, as amended hereby, due to failure of Developer to fidfill its
obligations related to the Temporary Gaming Facility.
8) Sedsindion of Obligation R Geyveloyment of PMararm Dancing Facility.
The parties acknowledge that the obligation to renegotiate the Original Documents to account for
changes in facts and circumstances and modifications in the Permanent Gaming Facility as
described Or Section 10 of the Fist Amendment is hereby satisfied.
9) PNOCapitalCommiumerd PNG hereby covenants and agrees with City to provide the
Developer with ail necessary finds required to acquire the Riverside Block and com mad and
open the Permanent Gaming Facility as contemplated hereby.
10) Amendment and Restatement f Initial UM The Temporary Gaming Facility shall he
and is leased and operated under Said subject to the terms of the Amended and Restated Initial
Lease, and the Formation Gaming Facility shall be, if developed, leased and operated under and
subject to the tames of the Amended and Restated Final Lease.
11) Mmahmance andReoaic Both the Amended and Restated initial Lease and the Amended
and Restated Final Lease shall provide that Lessee shall, at its sole cost, provide dl neressary
maintenance and repair of the Premises and all improvements thereon, including the
maintenance, replacements and repair necessary to keep the facilities Or compliance with
applicable fire and fife safety codes. Lessee and Lessor agree to meet, conf and develop a long
conn plan for the fume maintenance of the bums, said plan to be agreed upon on or before
Match 1, 2007. Lessee and Lessor acknowledge that it may be appropriate and pendent to reduce
the number ofbacts to be resumed at Bass Park. The plan shall include an agreement for the
number ofberns to be retained and the level, type and schedule of maintenance of the berms.
In the interim period between the date hereof and the finalization of the long term plan
referenced in the preceding paragraph, the Lessee shall be responsible for making any and all
replacements, repairs and improvements to the buns and related structures and improvements
located on the Limited Portion of Bass Park Portion of the Premises required in order to comply
with applicable fire and life safety codes and to otherwise maintain the facts and related
structures and improvements in the condition in which they exist, provided however, that Lessor
or its agents or employees shall procure contracts for those required reports, improvements or
replacements for which Lessee is responsible, subject to reimbursement by Lessee as set forth
below. Lessee shall reimburse the Lessor for all costs associated with such replacements, repairs
and improvements as are approved in wridn& in advance, by Lessee based on a general
description of do work to be performed and a good faith estimate of the cost of the work
provided by the Lessor to the Lessee in advance of perfomsnce of the work. Provided fast
Lessee is making a good faith effort to reach an agreement with Lessor on individual work orders
submitted in the Lessee by the Lessor, and on the long term plan refermcd im the preceding
paragmpb, Lessor shall not assert a breach of this agreement based upon the architecture of the
bams and related structures and improvements on the basis of a failure in comply with applicable
fire and life safety codes, provided however, that Lessee shall at all times remain legally
responsible for the compliance of the Premises with the maimenanee aM repair standards
described above and with all applicable the and life safety codes, whether or ant there is a
pending dispute of any nature regarding a weak order Or on ted long term plan referenced in the
preceding paragraph. Upon acceptance and approval of the long turn maintenance plan, any and
all maintenance work obligations of Lessor shall automatically terminate except as may be
provided in the approved longterm maintenance plan and except for any particular tasks than
incomplete, which Lessor shall complete in accordance with the above.
The Lessor, as Landlord (but not in limitation of the other powers of Lessor to inspect, enter
Won or otherwise investigate the Premises), and its designated representatives shall have a right
of access to inspect the Parking Area and the Limited Portion of Bass Perk Portion of the
Premises and to order corrective measures consistent with the foregoing. Formal inspections of
the Limited Portion of Bass Park portion of the Premises may be conducted by the Lessor prior
to and following the Harness placing Season each year during the Term. The purpose of these
inspections is to income that the facilities are maintained in the same or better condition as existed
at the shut thereof, and otherwise in accordance with the requirements of this Lease. In the event
Lessee fails to make repairs or to keep the Parking Area and the Limited Portion of Bass Park
portion of the Premises and all improvements thereon in a safe and smdtary condition and
otherwise as provided herein, Lessor shall have the right to enter upon the Parking Area and the
Limited Portion of Bass Park Portion of the Premises for purposes of making reports and to
charge the cost of such repairs to Lessee, which charges shall be payable as an Additional Fee
hereunder, payable within musty (90) days of demand by Lessor in the form of an invoice of
such charges and costs to Lessee; provided, however, that Lessor repairs can only be made in do
event Lessee fails to adequately maintain and repair the Parking Area slid the Limited Portion of
Bass Park pardon of the Premises in accordance with the terms hereof.
12) Miscellane s. This Second Amendment, and the Original Documents, as amended and
restated herein, set fond the =fire agreement between the parties hereto with respect to the
subject rnatter heroin =ntained; shall be governed and construed in accordance with the laws of
the State of Maine; cannot be altered, amended, modified, terminated or rescinded except by a
writing executed by the parties hereto; and "I more to the benefit of and be binding upon the
parties herein and their respective successors, transferees and assigns. This Second Amendment
amends the Original Documents where applicable, and where the terms of the Original
Documents and this Second Amendment may comlict, the terms of this Second Amendment
shall Prevail in all respects.
13) Limitation on Liability. (a) Notwithstanding anything herein to the contrary, Developer
agrees to look solely to the value of the City's wterrst in land and structures comprising the
Limited Portion of Bass Park Premises as the same is valued for real estate tax proposes for
recovery of any judgment from City, it being agreed that City is not and shall not be personally
liable for any such judgm=t Under no ciroumstmces shall City ever be liable for indirect or
consequential damages.
(b) The provisions contained in subsection (a) above shall not limit any right that
Developer might otherwise have to (i) obtain specific performance and/or an injunctive relief
against City enforcing Developu's rights and/or performance by the City hereunder, (ii) obtain
recovery against City's insiders up to the macimum applicable Policy limits, if my. or (iii)
initiate and maintain any other action net involving the liability of City.
(c) The City shall take out and maintain during the term of this Agreement, the
Arnended and Restated Initial Lease and the Amended and Restated Final Lease comprehensive
liability insurance in an amount not less then $5 million covering risks associated with its
ownership and operation of the Premises, the Riverside Block and the Parking Area and any
other activities or occurrences conducted on or in connection with the Premises, the Riverside
Block and the Parking Area. Upon request by the Develops, the City shall provide Developer
with a certificate evidencing such insurance is in fall force and effect.
14) Further Assurances. In addition to the actions recited herein add contemplated to be
performed, executed and delivered by each party, each party shall perform, execme and deliver
or cause to be performed, executed and delivered hereafter arty and all further acts, deeds and
assurances as the other party may reasonably require to consummate or evidence the
consummation of the transaction and/or the discharge of the obligations contemplated herein.
15) Savings Clause. Whenever possible, each provision and Who of this Second Am=dment
will be interpreted in a mmmer to be effective and valid, but if any provision or tum of this
Second Amendment is held m be invalid or unenforceable, than such provision or term will be
ineffective only to the extent of such invalidity or unenforceability, without invalidating or
affecting in my manner whatsoever the remainder of such provision or term or de remaining
provisions or tams of this Second Amendmem, and the parties droll in good faith agree upon
and implanout enforceable terms and provisions that most closely preserve the aommic costs
and benefits inherent many terms or provisions that are determined to be invalid or
wenforceable.
16) City Council Approval. The obligations of the City hereunder shall not be binding upon
the City unless and =61 this Amendment is approved and ratified in its entirety by a binding
vote of the Bangor City Council.
IN WITNESS WFtFREOF this Second Amendment has been executed and delivered as
of the day sort year first above written.
BANGOR HISTORIC TRACK, PIC.
By:
Name:
Title:
PENN NATIONAL GAMING, INC.
By:
Name:
Title:
CITY OF BANGOR
By:
FAward A. Barrett
Its City Mmmger
wfumA
EX IT A
AMENDED AND RESTATED INITIAL LEASE
EXHBU B
AMENDED AND RESTATED FATAL LEASE
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Track and Barns (10.85 acres)
Track oval (933) acres)
RV Pack (2.6 acres)
Gmndstand (0.9acres)
Parting—OTB (1.0 acres)
Parking — Racing (1.0 acres)
Personal Properly
EXHIBIT G
Initial Lease
100°/ of real estate taxes
50%of real estate taxes
50% of real estate taxes
100% of real estate taxes
100°/aofrealestatetaxes
50% of real estate taxes
100%ofpersonal property taxes
o"W"i.a
15
Final Lease
Track and Barns (10.85 acres)
100% of real estate taxes
Track oval(9.33) acres)
50% of real estate taxes
RV Park (2.6 acres)
50% of real estate taxes
Grandstand(0.9acres)
50% of real estate taxes
Parking— employee(2.0 acres)
100% of real estate trees
Parking—Racmg(Lowres)
50% of real estate taxes
Personal Property
10OVO of personal property taxes
Raaf Estate -Riverside Block
100% of real estate taxes
Personal Property—Riverside Block
100°/a of personal property nixes
o"W"i.a
15
EXHIBIT D
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