HomeMy WebLinkAbout2003-10-15 03-323 ORDERItem No. 03-323
Date: 10-15 03
Item/Subject: Order, Authorizing the City Manager to Bxecute a Letter of Intent with Capital
Seven, LLC for the Re -Development of Harness Racing Facilities and the Development of Gaming
and Related Hospitality Facilities Located at Bass Palk.
Responsible Department Ory Council
The Cmi and Capital Seven have been in discussions for some time regarding the potential
redevelopment of Bass Park to Include construction of gaming and other hospitality related facilities.
The City Council granted Capital Seven tentative developer status on January 27, 2003. That status
ended on May 1, 2003 without an agreement largely due to delays an the part of Capital Seven. In
June, Bangor voters approved locating video lottery terminals at a commerdal track in Bangor.
Since May, we have remain in discussion with Capital Seven and presented an outline for a potential
agreement to the Council in late May 2003 that inc uded a number of unresolved issues. Recently,
progress toward an agreement has once again been made. The attached Letter of Intent is the
result of mese discussions and is largely the same as that presented to the Council In late May.
This Letter of Intent, If approved, will provide the general framework for a final development
agreement and lease between the City and Capital Seven. It coal a two-phase agreement, with
Phase One generally the same as the CItys current lease agreement with Bangor Historic Track.
Phase Two would involve a minimum $30 million investment in facilities at Bass Park.
Upon evidence that this agreement is acceptable to Capital Seven, I would recommend that the City
Counal approve the attached Order.
Departrnent Head
Managers Comments:
ury Manager
Associated IMormation: Letter of Intent
Finance Director
Legal Approval:
cry sodciror
Introduced for
Passage
_ First Reading Page_ of
Referral
a3-323
suasraME Mr
.��_ Assigned to Couxilor (AS AtEpem)
711 INN
CITY OF BANGOR '
(TITLE.) Order, Authorizing one CM Manager to Execute a Letter of Intent with Capital Seven, LLC for
one Re -Development of Hames Rating Facilities and the Development of Gaming and Related
HosIn allty Facilities Located At Bas Park.
WHEREAS, the CM and Capital Seven have been in negotiations for some time regarding the re
development of hames racing Fatllides at Bass Park; and
WHEREAS, in lune, Me voters of the City of Bangor Supported a local referendum to permit the
location of video lottery terminals at a mmmernmi homes rating trod in Bangor; and
WHEREAS, the redevelopment of Bas Park and the construction and operation of gaming facilities in
conjunction with the hamess rating track will provide far the furore of harness racing in
Bangor, produce a revenue stream to asirt the City in meeting i6 goal of replacing the
Bangor Auditorium, and enhance economR activities In the Bangor Region; and
WHEREAS, the parties have manned a general agreement on the tems and conditions W be Induced
In a final development agreement and lease; and
WHEREAS, these terms and mnddlons are included in a Letter of Intent which will guide the
preparation of the final agreements.
NOW, THEREFORE, BE IT ORDERED BY THE CRY COUNCIL OF THE CRY OF BANGOR THAT
The GN Manager is hereby authorized M execute a Letter of Intent with Capital Seven, LLC for the m -
development of harness racing facilities and the development of gaming and related hospitality
facilities located at Bas Park. I nis Letter of Intent shall be in the form as attached hereto.
BE R FURTHER ORDERED, THAT
Given that Me Maine Hames Racing Commission has estalished a deadline of 5:00 p.m. on October
31, 2003 for receipt of applications for harness racing licervives, City staff is hereby authorized to submit
Such an application prior to this deadline as a prudent step to preserve the qty§ rights and options in
this matter. In the event that Capital Seven, LLC falls to meet any requirements of this Letter of Intent
or should a definitive development agreement not be executed on or before October 31, 2003, City
staff is hereby authorized to move forward in it efforts to secure a hamess racing licence at Bass Park
and W plan for and take such other steps as may be necessary and appropriate to insure the
continuation of harness ramp and other associated activities at Bass Park.
03-323
Assigned in Councilor croeley October 15. 2003
CITY OF BANGOR
(TIRE.) Order, Authorizing the City Manager On Euecute a Letter of Intent with Capital Seven, LLC for
the Re -Development of Hamm Racing Facilities and the Development of Gaming and Related
Hospitality Facilities Located At Bass Park.
WHEREAS, the City and Capital Seven have been in negotiations for some time regarding the re-
development of harness rating facilities at Bass Park; and
WHEREAS, in June, Me voters of the City of Bangor supported a local referenldum to permit the
location of viden lottery terminals at a commercial harness racing MO in Bangor; and
WHEREAS, Me redevelopment of Bas Park and the construction and operation of gaming facilities in
conjunction with Me harness rating hack will provide for the f fire of harness racing in
Bangor, produce a revenue stream to assist the City in meeting Its goal of replacing Me
Bangor Auditorium, and enhance economic activities in the Bangor Region; and
WHEREAS, Me parties have readied a general agreement on the terms and conditions to be included
In a final development agreement and lease; and
WHEREAS, Mese terns and conditions are included in a letter of hAent which will guide Me
preparation of the final agreement.
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CIJY OF BANGOR THAT
The City Manager is hereby authorized to execute a Later of Intent wmU Cepitel Seven, ULC for Me re-
devNopnent of harness racing facilities and Me development of gaming and related hospitality
facilities located at Bass Park. This Letter of Intent shall be in the form as attached hereto.
IN CITY COOP CIL
October 15, 2013
Cooactlar Nealley abstained
tram discussion and 3.rte
due to a previously established
conflict.
Nation Naas and Seconded for
Notion Nate and Seconded to
Arad by Substitution,
Nick Nurse. Bangor resident,
urged the City to look at
other developersifor this project
Noolas Pace. representing
Capital Seven, stated that his
organization is corltted t
bettor and ready to fivalize the
development agreement.
Notion to Pass As evaded by
Substitutfw
Nation Doubted
Vote: 6 yea. 2 no 1 abstaiaiog
Councilors voting yes: Cravley
Parboon, Farrington, Create,
Palmer 6 Robson
Councilors voting no: Allem 6
Tremble
Councilor abstaining: Nealley
Passed As Ameeded by
Substitution _
p 03-323
(MITLE)Authmriaing the City manager to
peace, LLC forethe Re -Development of
a
Located at bass Park
wj ayllb•
03-323
Capital Seven, LLE
1055 East Tropicana Ave., Ste. 700
Las Vegas, NV 09119
October_, 2003
Edward A. BmMt
Ciry Manager
City ABangw, MB
Bangor, ME 04401
Re: Bangor Historic Track/Bass Fmk Development Agreement
This bwmiour orb the pmposedtenns and wndmons of developmentagrearrumbetween Capi ad Seven,
LLC and He Civeregarding Na re-0evelopinemofble hamesa mungfaciIlove lased at Ross Park in Bangor and Ne
development of gaming a drelaed hospitality Bud fics by Bought Himwic Trx0m, and Capital Seven, LLC. Toffs
leen of imenldces not constitute binding agrewnentbetwem Ihereades, but rather tats most He enc smand
Framework From which a deMitiveaereement maybe emblished Neitherparty intends Natthis letter establish any
legally binding wmmitmentuntil and unless adefini0ve agreement is executed and delivered by Me pai%, The
patties agree to assume an Agreement not dear Mum October 31, 2003.
PARTIES:• Capital Seven, LLC and subsequent 0 assignment as herein Provided, Bangor
Himenc Track, Inc. P'Davelopr'7
City Of Bangor, Maine PCity")
CONDITION PRECEDEW: The Development Agreement and Lease will be subject to Ne modern prtcedent
Mat (I) Capital Seven LLC exercise i6 option to acquire a maturing interest in
Bangor Historic Track, Inc, (2) Capital Seven LLC causes Huge, Historic
Track,Inc. to seems it obligations under Me Development Agreement azthe
developer and Re Lease as Me loran; and (3) Bangor Hismric Track, Inc. obtain
a license from Me Maine Harness Ruing Commission nO labs Nan 90 days prior
he commencement of the Proposed binding season at Bangor Hislwio Truck. The
City shell assist Bangor Historic Track Inc. P'BHT'J in obtaining in 2004 swing
license (and being dates) by monitoring to He Maine Hames Racing
Commission that such license should be issued to BHT and by taking no wood
inconsistent wish Ne Among of such license (and racing dates) W BHT.
LEASE AGREEMENT Under the Developmmt Agreement, Me Developer and He City will under into a lease
for Ne Burs Park Complex with Ne some spseifed below.
Rent: Phase] :Continueexisting Ren; provided and; if conditions for cwnmmcwnma of
Phased me setisfed, that a recoupment payment shall be made within 12 marble
following commencement of Phase IF in an amount equal to Me t iffertnm between
the Phase I rentaceeny poor and Ne amrumtetwould have been paid in Phase I rtnt
if it had been charged at Phase 11 Base Rem levels
rose 11'
Mmuvetel
03-323
Bare Rut Developer to lease the Bass Park property, for 6% of Ne propery's
stressed value, is determined in accordance wiN the arcemont promew
applicable to private and, as am pandowdy described below. Annualremis
tautly estimatedtl S5,40o+/-per a�a or E620,1gp+/-. Thebamrentshallnot
be emblem to increase for improvements made to, on or under Ne Bass Fem
Proteins. The rant is to be subject to intrinsic mparreems based an centered
,sone, each adjustments to be murder to Nose used in news land lease agreements
by Ne Ciry; and any such adjustments to be computed solely on the basis of Me
real property (exclusive of improvements thereto) provided that any such
adjustments shall be music in 5 year Increments and no such adjumnnt shall be
made within Ne firm 5 years of the lease.
Percentage Rent Developer summers percentage tent payable or Ne City in an
aunt equal to the percentage of As "gross slot mnud Wendy received ley
Bangor Himmic Track set form in the following table:
Gross Slot Revenue
Persimmon
Amount as IOled
Rut
0$50,000,C00
3%
$115001000
s50,000,0o1470doo,00o
a%
glas
S70,000,00) $10,000,000
5%
S1,500,000
$100,008001+
6%
N sin P
1c3,P00,0110
"Grows Slot Revnue"means money orcretlits invented! into a video lotvsy, ruminal
r elotmachine(collectivity Gaming Macbinec) minus money mrments mpru
ia
paltlarmwmners
In Ne e,nt the revenue sharing paymn6 requiredw a mnduion ofthe Mame Isw
mmbnriaing Gaming Macbmeopermion is im mosed or decreased daring the arm of
Ne Lease, eecep[where such increases aresuppatted by
Criminal Seven, LLC m
Bangor Historic Track,Inc. as a resultofany agreement between Capbal Sewn, Li
or Banger Hial Track, Ino, and any othwpaR/ or where Climbed Seven or Bangor
Hismric Tnek, Inc were a public position in favorofsucb increases, Nen the
percentage rat[ set forth in theable above shall be adjusted by adding or subtracting
ne-NiM (1/3) of Me Increase of decrease to or from are pertemag2 az the caumay
be. Bywayofexmnple: ifthe revenue sharing increases by Mmen 33%willbe
deduced from Ne percentages set farm in Ne able.
Percentage Rent will have minimum of at least S1 million per year
Tvm: The lease will be divided into two phone. Phase l will common¢ upon
assessment of the but Daydreams Agreement. Rawl] will commence upon
squiring bath of me following two milestones: (I)receipl ofall necessary
entitlements, permits and approvals faoperat on(collectivity 'Ouncrai
Permits") of m least 1,000 (orthe maximum pumined by State law, whichever is
less) Goring Machines at the premises; which Operating Permits Developer
shall[epply for within 45 days kllowing the Novembaq 2003 recrommm a
allow slot newhines at cerain commercial harness owing tracks, and shall,
subsequent to such filing, diligently pmsxua such filings, and(2)co ting
ecommercial operation of Gaming Mxhinu at prem said commencing of
eoperation opration of Gaming Machines m begin with in 6 months after
teneipmf all necessary Operning Permits and all ronmmail use and
occupancy Immune raluirsd in common n woo the construction, occupancy and
lwomnul
03-323
use of my facility Nepal end/armnehucted for See operation of Gaming
Machines. The'Yerm" foreach place, will be in follows'.
peri • One(I)yeazt ,commencing Octoberl,2003
• Option an extend for me (1) additional year
Pbme ll: • CommencmuNnacbievingbWhmileslonesselform
above.
Initial arm often (1a) yams
• Renewal options
whb bIXel — Pom (B 10 -year renawal wanes
• without bolel - Two (2) 10 -year renewal arms
• Rekrto distil below«garding elimination attaches of
She Premises In draconian hotel is not commented onsite
wiNin the first Nfee (3) years of Phase ll or one (I) year
after achieving the benchmark of 360,000,000 of revenue
farm Gaming Machine revenue; whicbevworgan first.
Imam Premiw: Phase]: Dal Phase 1, Ne premises will be the existingpremises leased to
Bangor Historic hack, her
Phase II: The Eased premises will include she 78 hopes +/- constiNting Bass
Park, but will exclude the Auditorium and Civic Carter_ The precise "footprint'
of meleash premiss must be refined by the ponies, but includes the rtes& and
all an undmg; lsmking and undeveloped land, and the parties will agree
on
shaparking armnuen so long as the civic ranter and/or auditorium
redm
remasatBazs Park. See Appendix A for a preliminary site plan.
Real Estate Taxee:
Developer agrees to My personnel pmomy, and real estate txss under the lease
on the current mugnM valve ofNe reel property and cmrmtimprovemi
The assmsed value of additional improvements will be determined by Ne City
Annual in acmNance with assessing standards applicable to privately awned
property applied on aconsistent basis and on a basis consistent with prior
praadcers. Should Developer disagree with the value established by the Assessor,
D sveleper will have to same rights as challenge and appeal, m applicable to
privately awned property Developer as be treated in she came manner as any
acting owner of private pmpeny in the City
DEVELOPMENT
Developer and City will enter into a Development Agreement with the following
COMMITMEMIB
principal terms.
Location in Bnmgor:
• The Nevada will commit to locating it facility in Bangor, Maine mayor to
wipq on a timely basis, of all communist, use and occupancy permits
required in correction with Ne normal occupancy and use of my facility
banismand anchor committed for the trial of Gaming Machin es A Bass
Park.
Phase l Improvements: The Developer's commiMmt to improvements in Phare l will include only(])
03-323
development of detailed merger plan for More 11 improvements, and (2)
wsmHic imgove cab m the existing onohalf mile maehack and renovation of
grandaand, racing suppmt facilities and stables intended re address dekmed
ainhnance, mfrty and appmerance. No substantial defeat improvements are
wntmnpirm,
Developer's Phase l capital commibnmt shall be at least $100,000, including
tmplanningwsb. NospxificcapihlexpmdiWrmamc mitled Win
Phase I other Nan Bosse required fm mfr operation of the track.
Maintain exeling parking.
• City mug approve any construction flung specifications and design prior
transition of the possession, racing support facilities and stables, in accordance
with applicable City planning legal requirements.
• Develops and City will work comparatively in developing the maAer plan for
the premises. The mmtxplaa will:
)v mmdfy land uses and densities:
➢ Provideprehminaty arcotectural local for now 11 impmvemmts;
se Design marmoset retention ponds or underground sroragechambers to
cmtam Ne smrmwmer runoff; and
n Any changes marchers upon the new combined idea stosmwater
overflow piping (C80) Iodated beneath a ponbn ofNe muck and grandstand
will require appropriate prosection or relocation of the pipeline.
Phase l Timeline: • The agreement will obligate IXvelopHW complain Phate l work by tbeings the
track opens in the spring of 204M.
Phase l City Cammitmens: Tbefollowing malinm the commitments the City agree¢ to make for Perve l of the
construction p ma:
I A lune municipal referendum on adding slob 0 me Noom Razeway.
Scheduled frrTuesday, lune 10.
• Assistance from City with any remaining required for Phare l emovaems. No
major pvmming or entitlement is ea pea W.
• Cooperation and aaismnce in masts planning precea.
Phase 11 improvements: no Development Agreement will commit the Developer W the following PM1aze 11
improvements'.
• A minimum of S30 million in phase 11 wpibl improvements, including'.
• Gaming and conference center space sized W meet market demand. The
triggered space to be construMd willmolude Ne recommended speed from the
CS&l study for a nice conferencecareer (20,000 ¢quare feet ofmulopumwse
spew with 9,500 season At of breakout spend).
03-323
. Construction of broader 100.suite hotel.
• Surface or awcmretl parking, as required baccommotlate Mllef improvements
under zoning requiremens.
• Commuulnn of a collapsible open wasbge(will be used on the m went: for
spzial events).
Phase 11 Thomas; • Developer's obligation b proued with Pbme 11 improvements is subject to (1)
receipt of all permit' approvals and entitlements to opemle 1,000 (or Me
conum permitted by Sense law) Gaming Machines at Me facility and all
struction, use and occupancy pe rnib required in connection with Me
construction, ocapency and one of any facility to vaned answer mean used for
Me operation of Gaming Measures and (2) commencement ofwmmercial
operation of Gaming Machines at the premises.
• Developer will agree to commence construction of temporary gaming
improvements as sato as rmnerably possible following receipt of all counters
apparent for operation of or least I,000 (or she maximum pewirted by Stas
law, whichever is less) Gaming Machines at the premises.
• Construction of Me permanent gaming and somerenco center is e:pededM
wmmenw during summer 2000 and be completed by lune 2006.
•
Hotel Development
• Developer will agree to commerce musico cion ofhatel within one (1) year
of achieving the benchmark of $60 million in annual gross slat revenue.
• InMeevent the Developer has not encounteredconstruction oftheFosl
within Move (3) years following Pham II commencement or (1) yew
following the aUievemw[ of 560,000,000 in annual meas slot revenue,
whichever wasure tutu, Mm Me arm designated in the DowelopoWs metier
plan fera M1ovel may, aMe City's option, be removed from the leased
premises (with a proportiomte reduc ion in rent) for lease or sale to an
independent hotel developer.
• In Me event Me City has not successfully identified a M1nsl developer within
Mree (3) yet following removal of Me hand we from the pant, Men Me
site is relessm from the howl development revolution and may Fc used for
tiny appropriate purpose consistent with overall use of Me hominy anti, if
requested by Me Develop, the City and Developer shall negotiate the
returned of Me premiss to the Lease provided Me parties can agree on the
developmental use of Me reacted land Upon the return of such premises to
Me Lease, the land ant will be increased by Me amount the same was
reducNwFen such premises were removed from Me Lease. Ir Me event Me
subject premiss are oat restotPo to Me Lease, Ne Developer sImII have Me
right Loosen
ooe Mac quire arms and op Me subjeupred es during Me
res ofMe Lease on Me same terms sent esercose d Othrul f a Mha pang
and acceptable b Me City, Development t exerciay ors right nevem refusal
within thirty (3o)daysof noticeofthe thirdPotty offer or Developer forfeits
said right.
The Poveddrousl Agreement will contain specific timing requirements for
"I
03-323
commencement and wmplamem of improvements.
phase 11 city Commitments: The following outlines the commitments due City agrces to make for Phase 11 of Fe
construction pfird
It may be necceray to rezone all or portions of Me Bass Park property to
accommodate de program. If members, City shelf will pepmes and maker
proposed zone theme, which the City anticipates will be effated on a consumer
basis. City and Developer will work closely together on developing any
proposed zone change and exercise best eRorts to effort any required change.
The absence of due adoption of my legislation, rule or regulation whiner would
prohibit m prevent mnNugion of Ne beer to the height as presently proposed:
it being due undetsmnding of the patties that current or las and regulations permit
the proposed hold to be built wimout any inning variance.
Assistance Wim the resolution of Art propetry issues
The City will work with Developer to mhedule work on the site and may permit
night work basal on the name and location of the work.
Allow/ercummadaw connotations over As Impel combined sewer
stormwater overflow piping(CSO), subject to approval of plans and
specifiwfions by me Cry Engineer. Foie may or be narssmy, depending upon
the final site plan developed "a City and developer.
Tax Increment Financing: I Developer had the City agree to enter into restrictions towards establishing
Taxi Increment Financing District and Development Plan ("TIP) for Ce project.
The TIF revenue will be applial in me following order of priority:
I. To fund the war ofoffste Improvements, Including trafficlmprowmenrs
required wobtei s a permit from the Stne Department Of Transportation and
utilities. The City will work closely with Developer and its consultants to
develop the most eos4eRetlive solutions to traffic and parking is while
being sensitive to Inffic impacts in surrounding ar as of me community.
2. To fund me costs of public improvements, with funds allocated on a pro ram
hams, brand upon each pety's war of public improvements banned under
the development agreement.
Project Use for public TheState Fair will remain at me premises during phase 1.
Purposes:
During Pone II, Developer will work with the City toacrommodem the Sbte
Fair at me Bass Pink site. If me Developer request that the Sante Fair be
relocated then Developer will provide me City with at lent two (2) years' notice
remaining eelommon and commands SI million to me relonation.
• During base 1, Developer will allow me City use of space lamed by Developer
when mat spew Is not therwise required for harness racing or o er
venNappmvetl putpasss. This might allow, for example, forme use of me
tack inL¢Id fm youth sooner or ohm similar purposes.
Financial Assurance: • Developer will provite adequate performance Stationary prier tq and a$a
condition to, coat ant of Raw 11 of Ne lease City -approved plan s.
specifications and deadens fell "radical and costs shall be identified and
agreed upon, through the Bank I rester planning farmers.
Assignment of Development The City will retain approval of an assignment of Developer's right to any offer
Agrttment Blame: parry, provided that approval will not pay unreasonably withheld The Cary ignore
to an assignment of lease and agreement to Bangor Hideric Track, Inc.
following acquisition of a controlling interest in Bangor Historic Track by
Developer.
STATUS: • Upon exception of this farm oflntenl, the City shall confirm Developers slams
as the exclusive Developer for Ne projx5 The Developer shall terminate it
existing purcham option on pmpetry in Brewer and neither acquire property nor
a purchase option far property in Brewer or any other community and request
met Me City of Brewer net place the referendum W municipal approval the
operation of slot machin on the Bfewer ballet nor ark any other community to
place such municipal approval on its ballot, and the pence shall common their
beg and most diligent affairs m execua and deliver Be definitive document.
This Lwer of formal is not can neral in nature and relied only the intentions of Ne parties to proceed
ward the negotiation of definitive agreement and if such agreement are canceled, Asconsummation of Ne
nansaGion described heroin. No party will have any obligation to any o0erparty hereunder and Ne parties will
here only those obligations, and will make only [hese temporal warranties and covenant as may ba yet forth
in definitive throughout which are signal and delivered. Gmomexpresslyselforthin NisL eroflntent,no
perry will have any obligation or liabilityloged upon sing under this Lever of Intent to any offer party by
reason of the fact that definitive agewnent is net compared, humanism, execuW or delivered.
CAPITAL SEVEN, LLC
By:
IN Manager
CITY OF BANGOR, MAINE