HomeMy WebLinkAbout2005-06-13 05-214 ORDERItem No. 05-216
Date: June 13 2005
Item/Subject ORDER, Authorizing the City Manager to Execute an Amendment to the
Development Agreement between the City of Bangor and Bangor Historic Track, Inc.
Responsible Department: Legal
Commentary:
On October 31, 2003 me City and Capital Seven, LLC entered into a Development Agreement that
provided far a temporary facility for slot machines at Bass Park.
In April of this year Bangor Historic Track, Inc. (BHT), successor in interest W Capital Seven, LLC,
reached an agreement to acquire the former Millers Restaurant property for the puryose of locating the
temporary slot facility there. This will require an amendment m me Development Agreement.
This Omer amends the Development Agreement to provide that the temporary facility will be at me
Miller's location, not at Bass Park.
Depamnent Head
Manager's Comments: -Ikyf�y��te„.np,l'&AQ a*tlu 44
Recommend approval. `"6'"-'Y` -Keuft"& cafS tel w.4^r"a L A!/
L Cly Manager
Finan
OtySolidtor
Introduced for
X Passage
_ First Reading Page _ of _
Referral
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.,//., '^Aasip�adb Countilw TrMbtc ]we 13, 2005
CITY OF BANGOR
(TITLE.) ORDER, Authorizing the City Manager to Execute an Amendment to
the Development Agreement between the City of Bangor and Bangor Historic
Track, Inc.
WHEREAS, on October 31, 2003 the City of Bangor and Capital Seven, LLC executed a
Development Agreement for the development of a ration at Bass Park. Said
Development Agreement was assigned to Bangor Historic Track, Inc. (BHT);
and
WHEREAS, mid Development Agreement provided for a temporary facility for slot
machines at Bass Park; and
WHEREAS, on Apol 14, 2005 BHT and Miller's Inc., Miller Family Limited Family
Partnership and John Miller entered into a Purchase and Sale Agreement for
BHT's acquisition of the former Miller's Restaurant for the location of a
temporary facility for slot machines; and
WHEREAS, BHT is desirous of amending the October 31, 2003 Development Agreement
between BHT and the City to provide for the location of the temporary slot
machine facility to be at the former Millets Restaurant rather than Bass Park,
NOW, THEREFORE, be it
ORDERED,
THAT the City Manager is hereby authorired and directed, on behalf of the qty of
Bangor, to execute amAmendment to the Development Agreement between the City of
Bangor and Bangor Historic Track, Inc. Said Amendment shall contain terms and
conditions substantially in the form as attached hereto and shall be in a final form as
approved by the City Solicitor or Assistant City Solicitor.
IN CITY COOPCIL
June 13. 2005
lbHw Mede and Seconded to
Table
TablA
TY CLE6H
IN CITY COOMCIL
Jme 27. 2005
Motion Made and
Seconded to
aemove from the
Table
Removed from The Table
Motiop Made and
Seconded fox
pasMe'
CITY CIERK
# 05-216
08D8&
(IITLed Au[borinine the City Mavaeei to
bxecute an -Amendment t0 the Development
Agreement betveev the City of Seuear and
hangar =StoriC Track, Inc.
05-214
Amendment to Development Agreement,
Bangor Raceway Initial Lease Agreement, and Indenture of Penal Lease
The City 'ofDengue (haeffitaRer the "City"), a municipal corporation located in Burgas, County
of Penobscot, Some of Mauna, and Bangor Historic Track Inc. a Maine corporation (hereinafter
the "Developer"), hereby agree to this Amendment on the following twos. Peen National
Gaming, Inc., a Pennsylvania corporation with a place of business in Wyomissing, Pennsylvania
('TNG) is ezauting and delivering this Agreement for the limited purposes of evidencing its
commiHsem ant forth in Section 11.
WHCREAS, Capital Seven, LLC and the City on October 31, 2003 around into a certain
Development Agreement for the Development of a Portion of Hass Park, dazed October 31, 2003
(the "Development Agreement'), a certain Bangor Raceway Initial Lease Agrcemern dated
October 31, 2003 (the 'Initial Lease'), and a certain Ihdeahue of Final Lease dated as of
October 1, 2003 (the "Final Lease"), complete copies of which dome documents are attached
huelo as EXIIBITS A. B. and C respectively (the Development Agreement, Im al Lease, and
Final Lease sball be referred to herein collectively as the "Original Documents," and capitalized
terms not otherwise defined herein shell have the meanings assigned to them in the Original
Documents); and
WIdEREAS, Developer was assigned and assumed all of the obligations of Capital Seven, LLC,
as developer and mmant under the Original Documents; and
WH�tEAS, the tern of the Initial Lease has commenced (and the term of the Final Lease has
not yet commenced) and Developer, as Tenant thereunder is in possession of the Premises
desc bed thereunder; and
WHEREAS, the City and Developer wish to clarify, modify and amend the terms of the Original
Documents 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 aelmowledged,
intending to be legally bound, agree as follows, effective as of the date hereof:
1) Status of Housing Documents. The City and the Developer acknowledge and agree that
the Ongwal Documents are in full Rome and effect as of the daze hereof and that W the best of
each party's knowledge (based upon reasonable due diligence perf rmed by each party) both the
City and the Developer have complied in all material respects with, andarecurrently in
compliance in all material respects with, the toms, conditions and other requirements of the
Original Docmnurcs. The parties acknowledge that noverabstanding the foregoing as of the date
hereofthem are outstanding certain ErancW obligations ofthe Tenant.
2) Premises to Include Miller's. Under the Development Agreement and the Tended Leese,
any and all mfermces to that portion of the "Premises" to be used as the location of a temporary,
gaming facility are hereby amsided to mean and refer to the real property located az 427 Main
Street in Bangor, Maine which is the canent site of Miller's re onward as described on
"F,XBDSIT Do annexed hereto and made a port hereof (such real property "Miller's"), which
shall be developed and operated by Developer as a Temporary Gaming Facility (as defined
below) to be operated mtil the termination of the tem ofthe Initial Lease.
3) Deselearwant of the T Causing F iffy az Millers. All of the obligations of
Developer and= the Original Docmnems that pertain to the development, construction and/or
renovation, and operation of a temporary, gaming facility shall pertain hereafter to the
development, construction odor renovation, add operation at Millets as the site of a facility
containing no fewer tram 475 Gaming Machines and otherwise developed in accordance with the
Original Document% except as those obligations are modified herein (rise "Temporary Gamiug
FadOty"). Develops shall expand a send of at least $15,000,000 on capital expenditures for the
development of the Temporary German an Facility az Millers, inclusive of acquisition rest,
provision of a[ least 475 gaming machines, renovations to the Millets site, and the costs of
relocation of existing Off Track Betting facilities now at Millers to the renovated grandstand
weaofBmsPmk.
4) Ad'us[ment of Dazes Permanent Gamins Facility. (a) The aspiration of the "Tenn" of
the bdtial Lease (as defined therein) is hereby extended to dere daze of commencement of
mmereial operation of the Permanent Gaming Facility (as defined herein). The Initial Lease
shall be subject to the City's termination rights set font in sorrows 6 and 7 below.
(b) For purposes of this agreement, the tern "Permanent Gaming Facility" means the
permanent gaming facility ant all related improvements as described in the Original Documents.
(o) The City shall have the unconditional fight and option to terminate all rights of
Develops under the Original Documents and under this Amendment in the event that:
i) by the date that is six (6) yams following the date of Developers raking tide to
Millers (the "Millers Closing"), Developer shall not have delivered a notice se
the City indicating Developers intent to proceed and thereafter timely ed
diligently proceeded to complete development of the Permanent Coving Facility
and commenced cammencial operations thereof on or before the Permanent
Gaming Facility Termination Daze, as that tato is defined in subsection 4(c)(ii)
below. Tsmivetion for this reason shall be effective automatically upon the
Permanent Gaming Facility Termniaron Date.
it) by the date that is eight (8) years fallowing the date of the Miller's Closing,
Develops has not commenced cormn rcial operations of the Permanent Gaming
Facility(the "Permaaenf Gaming Fae ity Termination Date').
5) Transfer of Title to Millers. (a) As a condition precedent to commencement of
commercial operation of the Temporary Gaming Facility, the Developer ages to and shall itself
05-216
convey or shall came to be conveyed to the City by quitchum deed with covenant, good and
iusmable title to the land, exclusive of any buildings and improvements located on the Miller's
site, subject to (i) the hadal Lease, and (u) the encumbrances, restrictions, exceptions, limitations
and conditions described m the due diligence materials to be provided by the Developer to the
City in accordance with the requirements of this section and that are acceptable to the City as
provided in this subsection (a). The Developer shall retain ownership of all buildings, structures
and other improvements located at Miller's. Developer shall execute and deliver all necessary
deeds, documents and certificates related to same and shall be responsible for all closing costs
related thereto, including transfer taxes, recording fees, and any other fees or charges related to
the transfer. Prim to the execution and delivery of Us Amevdmevt, the Developer shall make
vailable to the City copies of all surveys, enviromvental assessments, title reports, and other due
diligence contends relating to the Developer's acquisition of Miller's. The City shall promptly
eco the foregoing materials and advise the Developer of any encumbrances, restrictions,
exception, limitations or conditions that are not acceptable to the City. Any matters not
identified by the City as umeceptable prior to the execution and delivery of [Iris Amendment
shall be deemed "acceptable" by the City for purposes of this subsection (a). The City reserves
the right to further object to any encumbmvcee, restrictions, exceptions, limitations or conditions
that arise or are identified subsequent to the effective date of any such due diligence materials.
(b) Comempomneously with commencement of commercial operation of the
Permanent Garring Facility (as defined hereinbelow), Miller's shall be recgnveyed by the City to
the Developer by municipal quitrlaim deed, conveying title to the land, exclusive of any
buildings and improvements located on the Miller's site (which shall coatinne m be owned by
the Developer throughout the tersa of the Cry's ownership), subject to only such encumbrances
and restrictions as existed m the time of conveyance to the City by the Developer under section
5(a) above and any additional encumbrances and restrictions that have been created, agreed to or
suffered by Developer. The City "I execute and deliver all necessary deeds, documents and
certificates related to some. The Developer shall be responsible for all closing costs related
thereto, including transfir des, -recording fees, and any other fees or charges related to the
trans£¢.
6) Construction of Temmorery Gaming Facility. (a) Developer agrees that following the
execution and delivery of this Amendment, it shall use its best efforts in good faith to arquire the
Miller's site and complete construction of the Temporary Gaming Facility at Miller's.
(b) The City shall have the right to terminate the burial Lease and the Original Documents m
the event that by August 1, 2005 (the 'Temporary Gaming Facility Termination Date') the
Developer has not acquired title to the Miller's site in accordance with ties Agreement awl if any
one or re of the following events has not occurred: (i) the Developer has applied for and
diligently pursued the issuance of all necessary permits and approvals (eluding without
bounden Gaming Pemuts and Development Permits) for the development and operation of the
Temporary Gaming Facility; and dd Developer diligently and continuously has prior to the
Temporary Gaming Facility Twormadmi Date pursued in ao ordance with prudent and
customary construction practices construction of the Temporary Gaming Facility for a period of
not less than seven (7) days from and after the date upon which Developer has begun
construction site work on the Temporary Gaming Facility; and did Developer has prepared
complete construction drawings for construction of ail such impmvemems; and (iv) Developer
has entered into a cons(mcflon contract to contracts for the covstrwtion of the Temporary
Gaming Facility, and (v) Developer has issued on unconditional notice to proceed to the
contr day under such ewtract or centrists. Such to
the Developer
shall be the Cit ov the sixtieth
terms day after the date Developer
notice is provided to the Developer lu the City. Upon sand
termination, act rights aof m=obligations
coda the Original Documents ant hereunder stall cease and
after ere, other duan am= obligations Naz expressly continue
ion to
under the am Pa6c Documents
to
after termination, including withoutlimitationasthey the obligation te return the Haas Park and with
s to
Ne Ctity mat least as good a condition a they were on the date of this Amendment, and with all
fixtures and other property that is to remain with the Promises in place ant in good working
order. All rent and other date payments doe a to Ttion. Th eloper under the Original Documents
shall be prorated as o the date of such termination. The foregoing termination right dull be
absolute and fly's shall be no obligation or right to arbitrate, mediate io otherwise dispute hor
e
contest the City's decision m terminate in the event the foregoing expressly
conditions are not met ee the
Temporary Gaming Froud Termination Date. The ent obligations;
is expressly intended N preempt
and Coming
aerie any timed in regarding development obligations related N the rm Facility Gaming Facility contained h the fora per Documents. The Temporary Gaming Facility
Termination Dene shall be extendetl for a period of time equal N an even[ ofjprce majeurc, as
de5ved below.
7) Commencement of Commercial Operation. (a) Developer agrees that following the
execution and delivery of this Amendment, it shall we commercially reasonable efforts to
commence commercial operation of the Tempmary Gaming Facility az Miller's on or before
December 31, 2005. 'Commercial operation" shall mean the Facility is opened to the public and
operating during its regular business hours with all of the required number of Gaming Machines
fully operational and the Facility and its operations fully licensed and permitted. For the
purposes of Us Agreement, Developer's obligation to me "conmrercially reasonable sports"
shall mean thrt Developers performance shall be subject only to the provisions of §7(c) below.
(b) Subject to the provisions of Section 7(c) below, in the event Developer has rut
commenced commercial operation of the Temporary Gaming Facility by December 31, 2005
("Opening Termination Date'), Nen the City shall have the right to terminate the Initial Lease
and the Original Documents as amended hereby. Such automation shall be effective on the
sixtieth (601h) day after the date written notice is provided to the Developer by the City. Upon
such terminatio4 all rights of Developer order the Original Documents and hereunder shall
come and terminate, other than tenant obligations that expressly continue under the Original
Documents after automation, including without 6rNtution the obligation to mlum the Bass Park
Premisee to the City in a[ least as good a condition as they were on the date of this Amendment,
and with all fixtma said other property that is to remain with the Remises iv place and in good
working order. All real and other payments due from TeanbDeveloper under the Original
Doc=mrn shall be pmraed m of the daze of such termination: The foregoing temdnation right
shall be absolute and Sure shall be no obligation or right to arbitrate, mediate or otherwise
dispute or contest the City's decision to terminate in the event Ne Developer has not commenced
commercial operations of the Tempmay Gaming Facility on or before the Opening Termination
Date. The foregoing is expressly intended to preempt and supersede any timeline regarding
05-214
development obligations related to the Temporary Gaming Facility contained in the Original
Docmnents.
(c) The Developer shall have the right to extend the Opening Termination Date for so
long as any one or more of the following conditions exist, but in no event later than December
31, 2008 regardless of whether such conditions exist or prsist as of that date;
(i) the Developer has not received all necessary Gs ring Permits and Development
Permits required to construct, open and operate the Temporary Gaming Facility; or
(ii) all other permits, Bcemses and approvals required to be issued to any other persons Is
order for the Developer to actually operate the Temporary Gaming Facility have not been issued
to such persons, including without limiting the generality of the foregoing, slot machine
distributors, gambling services vendors, and employees of the Developer, slot machine
distributors and gambling services vendors pursuant to chapter 31 of Title 8 of the Maine
Revised Statutes Annotated; or
(iii) any statute, rale, regulation or order of any court he administrative agency shall have
been enacted or promulgated alta the date hereof which restrains or prohibits the Developer
from developing and/or operating the Temporary Gaming Facility; or
(iv) my action, suit, or proceeding shall be pending before any court or quasi judicial or
administrative agency of my federal, state, local, or foreign jurisdiction wherein an immorable
injurection, judgment, order, decree, ruling or charge would prevent consummation of espy of the
transmtiorvs contemplated by this Agreement, or result in a material adverse change in the level
of taxation, fees add charges levied, assessed or otherwise imposed upon the operator of the
Temporary Gaming Facility or Permanent Gaming Facility; or
(v) the pendency ofmyforre Jerre,. as defined herein
(d) For the purposes of this Amendmem, "fume m jcu shall mean end include all
factors, circumstances, transections, occurrences and other actions beyond the direct control of
the Developer, including without burring the generality of the foregoing, labor disputes, civil
di turbmce, war, war Eke operations, invasions, rebellion, hostilities, military, or usurped power,
sabotage, fres or other usually, ally, or acts of God ttat have the effect of rendering practically
unavailable materials or labor or other resumers necessary to construct the Temporary Gaming
Facility. "Force majeure" shall not include my of the actions, events or cvcumstances set forth
in subsections 9(c)(i) through and including (iv) above.
8) OTB Operations. The Initial Lease is hereby amended to include as a permitted use of
Bass Park the development and operation of an off-track betting facility, with authority to
simulcast during the Developer's regular meet, generally as described in the Developer's License
to Conduct Pari-Mmuel Wagering a an OffTrackBetting Facility submitted to the Maine
I{zmess liacing Conamaon dated May 4, 2005. The Base Fee under the Initial Lease shall
increase on October 1, 2005 from Thirty Five Thousand DOE= ($35,000) to Ninety Thousand
Dollars ($90,000).
05-214
9) Asir abilih. (a) Developer shall not assign it rights hereunder or under the Original
Documents without the prior written consent of the City, which consent shall not be
umeasombly withheld or delayed. For purposes of this section, any sale, transfer or other
disposition of fifty one percent (51%) or vire ofthe currently outstanding common stock of the
Developer, whether effected through a sate, merger or other consolidation or reorganization, to
any party not ovmed or controlled by PNG, whether effected through a single notation or
through a saes of related transactions, shall be deemed an assignment requiring the City's
consent. The City may not withhold its cannot to an assignment to any party approved by the
State of Maine Gambling Control Board patent to Title 8, section 1011 of the Maine Revised
grammes Annotated and licensed W conduct the contemplated commercial agitations at the
Temporary and Permanent Gaming Facility Factional mom this subsection (a) is any existing
contractual commimorms by Developer or PNG under the agreements governing the acquisition
of me Developer mom PNG's predecessor in interest or its related entities.
(b) The City's execution of this Amendment shall not be returned W be a waiver of any
rights the City his utdar current or mono laws to perucipae and/or barrette in any licensing or
pemuttmsg process before each Board or any other boards or bodies with Becoming or permitting
authority related to the subject matter of this Agreement
10) Renegotiation lUlated in Developmentf Fairmount Gaining Foci . Subject to and
without modification of the terms and conditions of section 4(c) above, the City and Developer
acknowledge that the Original Doeomerm require further revisions to account for changes in
facts and enormousness and modifications in the Permanent Gaming Facility and anangements
rel+.cos donat®r and therefore agree that on or before Ocmber 1, 2005, the parties shall promptly
enter into good fuith renegotiation of those provisions in the Original Documents as they pertain
W the development and operation of the Permanent Gaming Facility, including widnm
limitation, da estimatnd scope, timelines, and conditions for developmem, construction, and
commencement of operation. Notting in this paragraph shall be considered W modify, alter,
wove or render ineffective any provision hereof or of the Original Documents.
11) PNG Conrad Comom . PNG hereby covenants and agrees with City W provide the
Developer with all necessary foods requ"med to acquire Miller's and construct the Temporary
Gaming Facility as contemplated hereby.
12) Indemnification. All indemnification provisions of the City contained in the Original
Documents notwithstanding anything to the county therein, dull not be considered W, and
shall net, expand or create liability on the pan of the City W any person (including the persons so
indemnifind) for claims floor which the City or its agents, officers or employees is or us
released, exempted and/or protected by the Maine Tort Claims Act as it is currently in effect or
is in the future mom time to time modified Or expanded. The obligations and exposure of the
City oder any indemmificatien obligations remained in the Original Documents are subject to
the foregoing limitations, and are £ether subject W and shall not exceed the amounts payable W
any claiming party order any liability insurance or other insurance the municipality is
maintaining at the time of such claim, if my. City shall use beat ¢bons W require my third
parties with rights W operate any activities on Bass Park to include Develop= 0 M additional
insured in any case where each party is resumed to include the City as an additional insured.
Developer stall have the right from time W mne to receive from City upon written request by
Developer copies of insurance certificates from such third parties.
13) Prliecehaneo This Amendment and the Original Documents referred to herein
set forth the entire agreement between the parties beaten withrespect to the subject matter herein
contsined; shall be govemed and construed is accordance with the laws of the State of Maine;
cannot be altered, amended, modified, temboomd or rescinded except by a writing executed by
the parties hereto; and shalt inure so the benefit of and be binding upon the parties hereto and
their respective successors, transferees and assigns. This Amendment amends the Original
Documents where applicable, and where the terms of the Original Documents and this
Amendment may conflict, the terms of this Amendment shall prevail in all respells.
to addition to the actions recited berein and comemplated to be performed, executed ant
deliverer by each party, each parry shall perform, execute and deliver or cause W be performed,
ecuted and delivered hereafter airy ant all further acts, deeds and encamp ss as the other party
may reasonably require to consummate or evidence the cwstsmmation of the transaction arM/or
the discharge of the obligations contemplated herein.
The obligations of the City hereunder shall not be billing upon the City unless and until
this Amendment is approved and ratified W its entirety by a binding vote of the Bangor City
Council.
IN wlTNESS WHEREOF [Ids Amendment has leen executed and delivered as of this
&yofJWy2005.
By
T6 Wh ran. Cwkvo
T C6w,n.... f (to
PENNNATIONA GAMING,INC.
t�fi'o 6 �pecoo - .
CITY OF BANGOR
1�Wi
.. , r,_�.1
