Platinum Holdings_Amendment to Development Agreement
CITY OF DUBUQUE, IOWA
MEMORANDUM
January 12, 2001
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Changes to Agreements with Platinum Holdings for Development of Hotel/Water
Park on 4th Street Peninsula
The City Council approved on June 19, 2000, the Development Agreement with Platinum
Holdings for the construction ora proposed hotel/water park. At that time, a form of Lease and
Facility Management Agreement were attached to the Development Agreement. The Lease and
Management Agreement have now been finalized and several changes to the Development
Agreement itself are needed. In addition, a new Parking Use Agreement has been created for the
hotel property.
Since the approval of the Development Agreement in June, environmental investigations have
required the City and Platinum to renegotiate the actual property footprint to be leased. This will
remove any barrier to financing the project that the Developer might encounter due to the
environmental condition of property to be mortgaged. In addition, the application for Vision
Iowa funds has both helped to def'me the project and to delay implementation as the City awaits
word on award of funds.
The City of Dubuque, the Dubuque County Historical Society and the Dubuque Area Chamber
of Commerce have partnered together on the $188 million America's River project. An
application has been submitted for $58 million in Vision Iowa funding from the State of Iowa.
The Mississippi River Discovery Center, the Mississippi River National Education and
Conference Center, the riverwalk and amenities, and the riverfront hotel and indoor water park
will help create a new national identity for Iowa. The 90-acre campus will be THE place for
people across the country and around the globe to learn about and experience the Mississippi
River. This will be the only place on the entire 2,400 mile stretch of the Mississippi River that
captures the historical, environmental, educational and recreational majesty of the Mississippi
River.
America's River creates over 1,000 new jobs that pay a living wage, it puts the State on the map
as an international destination by bnilding on a global treasure, the Mississippi River, and creates
a magnet for a young and diverse population. At its heart, the America's River Project is all
about Iowa and traditional values of strong education and conservation of preeminent natural
resources.
America's River will be a national center with partnerships and support from 12 federal
agencies, donors from across the State of Iowa and from the entire length of the Mississippi
River from Minneapolis to New Orleans. America's River Project is ready to go. Over $130
million in matching and leverage funds have been secured, including over $31 million from the
City of Dubuque. If Vision Iowa funds are granted in early 2001, America's River will begin
opening its doors within two years. The approval of these agreements with Platinum Holdings
for development of a hotel water park is an important component of this project and will be used
as part of the 50/50 match required for Vision Iowa funding.
Because of the environmental condition of the property, and to help the City to avoid additional
costs, Platinum has agreed to move their building approximately 100 feet to the north. The
major changes in the Development Agreement and Lease include a reduction of the leased
acreage, from five acres down to three and one-half acres. The City then takes on the
responsibility for construction of the needed parking with an exclusive Parking Use Agreement
executed. This is similar to the arrangement with Peninsula Gaming, the Spirit of Dubuque, and
the Dubuque County Historical Society. There has also been a change in how lease payments
are calculated after the l0th year of the lease through the 50th year in that there will now be an
annual CPI adjustment. The Developer has agreed to a miuimum assessment of $250,000 for the
first four years, and the City agrees that for that period, that also will be the maximum amount of
taxes paid, and any amount paid over that amount will be rebated back to the Developer.
Finally, the City will indemnify Platinum against any environmental risks.
The additions to the Facility Management Agreement includes the City providing $396,000 to
capitalize up-front costs, the City paying insurance costs for the facility, and the two parties
agreeing to share 50/50 in all utility costs.
I respectfully recommend Mayor and City Council approval of the amended Agreements and the
new Parking Use Agreement.
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Pamela Myhre, Acting Community and Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
SUBJECT:
January 11, 2001
eM~lailMVy;eM,~llt~~n~nt Director
Changes to Agreements with Platinum Holdings for Development of
Hotel/Water Park on 4th Street Peninsula
Introduction
This memorandum discusses changes to several agreements between the City and Platinum
Holdings regarding development of a new hotel]water park on property in the 4~ Street
Peninsula. It also provides for the approval of a separate parking use agreement.
Discussion
The City Council approved on June 19, 2000 a Development Agreement with Platinum Holdings
for the construction of the proposed hotel/water park. At that time, a form of lease and facility
management agreement were attached to the Development Agreement. The lease and
management agreement have now been finalized and several changes to the Development
Agreement itself are needed. In addition, a new parking use agreement has been created for the
hotel property.
SInce the approval of the Development Agreement in June, environmental investigations have
required the City and Platinum to renegotiate the actual property footprint to be leased. This will
remove any barrier to financing the project that the Developer might encounter due to the
environmental condition of property to be mortgaged. In addition, the application for Vision
Iowa funds has both helped to define the project and to delay implementation as the City awaits
word on award of funds. The following discussion identifies the proposed changes to the
agreements:
Proposed changes to the Development Agreement
· The proposed lease area is reduced from 5 acres to 3.5 to avoid certain environmental
conditions discovered during Phase II environmental investigations of the property. The
property to be leased will not require any Comfort Letter; however, the City will agree to
indemnify the Developer against any pre-existing environmental conditions should
something be discovered in the future, e.g. during construction of the new hotel. Also,
more testing may be done when the existing structure on the site is demolished.
Because of environmental conditions found in areas planned as parking lots for the hotel,
the City will not lease those areas to the Developer but rather will develop and maintain
parking for the hotel project and enter into an exclusive parking use agreement with the
Developer. This is the same way parking is handled for the other uses in the Ice Harbor
area that use City parking.
The parking use agreement stipulated in the Development Agreement sets a minimum
number of parking spaces to be created for Phase I and Phase II of the hotel project.
While the Developer will maintain the parking lots on a routine basis, including
sweeping, landscape trimming, snow removal and trash collection, the City will reta'm all
replacement/repair responsibilities.
The Minimum Assessment Agreement associated with the Development Agreement
provides for an assessment tbat will provide approximately $250,000 in tax increment
from the property. Based on the actual price paid by the City to Plastic Center, Inc. for
the property, the taxable value of the property has likely increased substantially over that
estimated at the time of the original agreement. An economic development grant
provision bas been added to the Development Agreement that provides a rebate to the
Developer for a 4 year period equal to the difference between actual taxes paid and
$250,000.
The Developer is granted a right of first refusal on the Phase II parking and development
areas during the term of the lease (50 years). Developer shall also have a right of first
refusal for an additional parcel of land directly south of the Phase II water park property,
and directly along the Riverwalk, for a period of 15 years.
Proposed Lease
Due to a reduction in the lease area, the proposed lease rate has been reduced.
An annual lease rote adjustment which begins in the 114 year of the lease will be
calculated using the Consumer Price Index rather than a reappraisal process.
Changes in the environmental section correspond to changes made in the Development
Agreement.
Proposed Facility Management Agreement
The City agrees to provide $396,000 for needed start up costs. This allows the performa
for the property, which was required in the Vision Iowa application, to show the facility is
financially feasible.
· The City will pay insurance costs for the facility.
The City and Platinum will equally share the utility costs for the facility.
New Parking Use Agreement
· This agreement is similar to other parking agreements in the 4th Street Peninsula in which
the parking areas are owned and maintained by the City at no cost to the businesses in the
area with routine maintenance responsibilities carried out by the business.
The agreement restates the environmental and fight of first refusal language found in the
Development Agreement.
Recommendation
City staff has worked to craft the changes in these agreements to reflect a workable plan that can
be readily implemented once the Vision Iowa award announcement is made. We have worked
with our environmental consultants and environmental legal staff to ensure a project that limits
the City's liability exposure while providing the Developer with a project that can be financed.
The proposed amendments reflect the work of both parties, City and Developer, to make the
vision for the redevelopment of the City's 4th Street Peninsula riverfront become a reality. I
recommend that the proposed amendments to the attached agreements and the new Parking Use
Agreement be adopted by the City Council.
Action Step
The action step for the City Council is to adopt the attached Amendment to Development
Agreement.
JallUaa~ 11, 2001
F:\U S ERS~Umyhre\WPDOC S\UR~Ice Harbor~amendmemo.wpd
CITY OF DUBUQUE, IOWA
AMENDED DEVELOPMENT AGREEMENT
THIS AMENDED DEVELOPMENT AGREEMENT (the "A.~reement"), made on or as of the __
day of, 2000 January, 2001, by and between the City of Dubuque, Iowa, a municipality
(hereinafter called "CITY"), established pursuant to the Code of Iowa of the State of Iowa and acting
under authorization of Chapter 403 of the Code of Iowa, as amended (hereinafter called "URBAN
RENEWAL ACT") and Platinum Holdings, LLC (hereinafter called "DEVELOPER').
WITNESSETH:
WHEREAS, in furtherance of the objectives of the Urban Renewal Act, City has undertaken an
Urban Renewal project (hereinafter called "PROJECT") to advance the community's ongoing economic
development efforts; and
WHEREAS, said Project is located within the Ice Harbor Urban Renewal District (hereinafter
called "PROJECT AREA"); and
WHEREAS, as of the date of this Agreement there has been prepared and approved by City an
Urban Renewal Plan for the Project Area consisting of the Urban Renewal Plan approved by City Council
of City on the 5th of June, 2000 (attached hereto as Exhibit A and hereinafter called ~URBAN RENEWAL
PLAN'); and
WHEREAS, a copy of the Urban Renewal Plan, as constituted on the date of this Agreement, has
been recorded among the land records in the office of the Recorder of Dubuque County, iowa; and
WHEREAS, Developer has requested that City acquire and lease to Developer approximately ,5
3.~5 acres located in the Project Area as more specifically identified on Exhibit B attached hereto
(hereinafter called "PROPERTY") so that Developer may redevelop said Property, located in the Project
Area, for and in accordance with the uses specified in the Urban Renewal Plan and in accordance with
this Agreement; and
WHEREAS, City believes that the redevelopment of Property pursuant to this Agreement, and the
fulfillment generally of this Agreement, are in the vital and best interests of City and in accord with the
public purposes and provisions of the applicable federal, state and local laws and the requirements under
which the Project has been undertaken and is being assisted; and
WHEREAS, this Development Agreement is exempt from the competitive bidding procedures of
Iowa Code Section 403.8(2) as a result of the agreement of Developer to enter into a minimum
assessment agreement as provided in Iowa Code Section 403.6 and the development of home/regional
offices of a multistate business at the Property.
NOW THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
SECTION 1. ACQUISITION OF PROPERTY BY CITY
Subject to all the terms, covenants and conditions of this Agreement, City shall use its best efforts,
including the exercise of its eminent domain powers, if necessary, to acquire Property for the purpose of
conveying the same to Developer.
SECTION 2. LEASE OF PROPERTY TO DEVELOPER
2.1 Lease. On the Closing Date, City shall transfer possession of Property pursuant to a lease with
the Developer (the "Lease") for a term of fifty (50) years. The Lease shall be substantially in the form of
Exhibit C attached hereto. On completion of the Phase II Improvements (as defined in Section 3.1
below), the Lease shall be extended for the appropriate pedod of time in order that the Lease shall be for
a term of fifty (50) years commencing on the date the Developer receives the certificate of completion
from the City related to the completion of the Phase II Improvements. The City and Developer shall enter
into a Parking Use Agreement, substantially in the form of Exhibit 6 attached hereto, pursuant to which
the City shall provide Developer with proprietary vehicular parking as more specifically designated on
Exhibit B attached hereto, for a minimum 290 vehicles for the Minimum Improvements and, if constructed
as provided herein, for an additional minimum 110 vehicles for the Phase II Improvements (total minimum
parking for both Phase I and Phase II of 400 vehicles).
2.2 Recordation of Lease. On the Closing Date, Developer shall record a Memorandum of Lease as
stipulated in the Lease among the land records in the office of the Recorder of Dubuque County, Iowa.
Developer shall pay all the costs for so recording.
2.3 Condition of Property. City shall deliver the Property to the Developer in a condition that the
Developer can immediately commence constructing the Minimum Improvements (as defined in Section
3.1 below), including without limitation, the demolition by the City of all pre-existing structures on the
Proparty, and shall deliver the Property to Developer in a condition that satisfies the following standards;
(a) Environmental Investigation. City shall retain an environmental consultant to conduct a Phase
I environmental assessment that shall comply with the ASTM E 1527-97 standard with the exception of
those reasonable and documented exceptions agreed upon by Developer. The City shall also retain an
environmental consultant to complete a Phase II environmental assessment that shalt comply with the
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ASTM E 1903-97 standard with the exception of those reasonable and documented exceptions agreed
upon by Developer. The Phase II shall consider those concerns identified in the Phase I. The City and
Developer shall consult concerning the identity of the environmental consultant, and Developer shall not
unreasonably withhold approval of the environmental consultant. Developer approves Preston
Engineering as an acceptable environmental consultant for the purposes of this Agreement. The City and
Developer shall consult concerning the scope of work to be included in the Phase II, and Developer shall
not unreasonably withhold approval of the Phase II scope of work. Upon completion of the Phase I and
Phase II environmental assessment reports, City may in its sole discretion undertake additional
environmental assessment ("Supplemental Phase It") after consultation with Developer. Developer shall
have the right to inspect the Property prior to the Closing Date and to take whatever tests or perform such
examination, as Developer shall deem appropriate, at its own risk and its sole cost and expense. Prior
notice of such activity by Developer shall be provided to the City and written results of such activity shall
be shared with the City. Any test, examination or inspection of the Property by Developer shall not
eliminate or relieve the City of its obligations under this Section2.3. Notwithstanding any provision to the
contrary, prior to Closing, following adequate demolition and availability of the Property, the City agrees fn
conduct additional groundwater and soil sampling at locations within the proposed foundation of the hotel
as shown on Exhibit B and as aqreed upon by the City, the Developer and the environmental consultant
The City agrees to monitor the demolition of existinq structures and to notify the Developer if any
environmental concerns are discovered.
(b) Comfort Letter. If the environmental assessments indicate or if under any other
circumstances Developer or the City or their contractors determine prior to the Closing Date that
Hazardous Substances on the Property are in excess of any applicable action level, as defined at 567
Iowa Administrative Code § 133.2, 567 Iowa Administrative Code Chapter 135, or applicable statewide
standard developed under Iowa Code Chapter 455H, if the Property is statutorily eligible, whichever is
less stringent, then City shall obtain a "no-action lette¢' from the Iowa Department of Natural Resources
and if the Environmental Protection Agency ("EPA") has concurrent or primary jurisdiction over the
particular Hazardous Substance identified, then City shall also obtain the appropriate comfort letter/status
letter pursuant to the EPA's Policy on the Issuance of Comfort/Status Letters, Nov. 8, 1996. The no-
action letter and/or comfort/status letter ("collectively termed "Comfort Letters") shall be subject only to
such restrictions, impairments, and conditions that do not substantially impair the use of the Property and
which are approved by Developer, which approval shall not be unreasonably withheld. Any requirement,
restriction or condition that the Property be moved more than one hundred (490) thirty (130) feet from the
location identified in this Agreement and the Lease shall be defined as a substantial impairment. After
Closing, no requirement, restdcfion or condition shall require the Property to be moved. If thP.
environmental assessments indicate any Hazardous Substances on the Property or on any proposed
location of the Phase II Improvements, Developer shall have the option to move the location of the
Property up to one hundred thirty (130) feet north of the current location of the Property as reflected on
Exhibit B attached hereto. In the event that the Property is moved, the City shall add to the parking area
under the Parking Use Agreement that part of the current Property location that will no Ionqer be used a.~
the Property location. The City will also expand the parking area under the Parkin.q Use Agreement tn
include the additional land directly to the west of the Property as a result of the move of the Property
location to the north. The parking area south and west of the Property at all times shall provide parking
for a minimum 290 vehicles for the Minimum Improvements and an additional minimum 110 vehicles for
the Phase II Improvements (total minimum parking of 400 vehicles for both Phase I and Phase II). In thc.
event that the Property location is moved, the City and Developer will prepare a revised Exhibit B
reflectinq the new Property location. Any Comfort Letter shall be based on the anticipated use of the
Property as outlined in this Agreement, including all anticipated expansions.
(c) Remediation. If the City or a governmental agency having jurisdiction over Environmental
Laws determines that the concentrations of Hazardous Substances on the Property require removal
and/or remediation prior to the issuance of a required Comfort Letter as defined above, then City shalt
retain an environmental consultant to prepare a plan ("Environmental Remediation Plan") for the removal
and/or remediation of the identified Hazardous Substances as required by applicable environmental
agency or agencies. The Environmental Remediation Plan shall provide for the removal and/or
remediation of the identified Hazardous Substances to a level sufficient to obtain the aforementioned
"Comfort Lette¢'. The Environmental Remediation Plan shall include an estimate of the total costs of
conducting the removal and/or remediation required by the applicable government agency or agencies to
obtain the required Comfort Letters. The estimate of costs shall be based on the cost of local contractors,
provided local contractors are qualified and available to perform such work. The estimate of costs shall
not include internal staff costs to the City. Following the completion of the Environmental Remediation
Plan, the City shall cause the removal and/or remediation of Hazardous Substances as required by the
applicable governmental agency or agencies to be acoomplished pdor to obtaining the required Comfort
Letters and prior to Closing unless otherwise agreed to by the Developer. Ali of the costs of obtaining the
Phase I, Phase II, Supplemental Phase II, Environmental Remediation Plan and any remediation and/or
monitoring as required by Comfort Letter shall be borne by the City. City shall not be responsible for costs
generated by Developer if Developer retains a consultant to assist it in reviewing the aforementioned
reports. The requirement to obtain a the required Comfort Letters shall be a material precondition to
closing.
(d) $200,000 Cap on Additional Costs for Developer. Neither the Comfort Letters required by
2.3(b) of this Agreement, nor any Environmental Remediation Plan provided by 2.3(c) of this Agreement
shall result in a substantial impairment of the planned and intended use of the Property by Developer. A
substantial impairment shall include, but not be limited to, additional costs for the construction of the
Minimum Improvements which in total exceed the sum of $200,000. The determination of the additional
costs shall be based upon those changes or other modifications which would not need to be made were it
not for the environmental condition of the Property as disclosed in the environmental assessments
(Phase I, Phase II and Supplemental Phase II) and, if applicable, the Environmental Remediation Plan.
In the event that the Remediation Plan results in a substantial impairment, which includes additional costs
that exceed $200,000, then Developer at its option may declare that the City has defaulted in its duty to
obtain the required Comfort Letters acceptable to Developer. In the event that the City pays all additional
costs that exceed $200,000, the Developer shall be prohibited from declaring the City in default under this
subsection 2.3(d). Notwithstanding the foregoing, the City shall have no obligation or responsibility to pay
any additional costs as a result of any substantial impairment of the Property.
(e) $1,000,000 Cap on Remediation Costs for City. If after submitting a Remediation Plan to the
applicable governmental agencies as may be required under 2.3(c) of this Agreement, it is reasonably
determined by the City Council of the City, based upon a recommendation by the environmental
consultant, that the costs of the removal and/or remediation necessary to obtain the required Comfort
Letters will exceed the sum of one million dollars ($1,000,000), then City shall have the option to
terminate this Agreement within fifteen days after receiving the Environmental Remediation Plan or
Novembe~ December 19, 2000, whichever date occurs first.
(f) Release of Reports and Data. The City shall promptly provide Developer with a copy of all
environmental consulting or engineering reports, separate laboratory analysis reports, and other matedal
information and data received by City, in the possession of the City, or generated by the environmental
consultant, regarding the environmental condition of the Property, or which are otherwise received or
generated as part of the Phase I, Phase II and Supplemental Phase II environmental assessments or
removal and/or remediation action, except for attomey-client privileged documents.
(g) Reciprocal Covenants.
~ Developer covenants and agrees that City shall have no responsibility for or liability
adsing from any release of a Hazardous Substance, which is caused by Developer or its agents
or invitees: Notwithstanding any other provision of this Agreement, City agrees that Developer
shall not have any responsibility for any w .... ,~ .... ~,,~,o, ....... ~-~,-h ~o,-~, ..... ;""~+~° '-'pon
,h,~ o .... '~" ~ ........ '~ .... * ..... ~' ......... ~ ..... ~ '~ Pre-Existing Cond ton (as defined
below) nor shall City seek indemnification from Developer for any such Pre-E×isting Condition.
There is a rebuttable presumption that any Hazardous Substances found on the Property after
the Closinq Date were not deposited by the Developer and are a Pre-Existinq Condition. A pre-
e×isting condition ("Pre-Existing Condition") shall be defined as (i) any Hazardous Substances
found on the Property, prior to or after the Closin.q Date, which were not deposited by Developer
or its agents or invitees on the Property, and (ii) any Hazardous Substances which ~
¢';~, ...... ~,-~, ~ .... io,~ ,~,~ ,~,~ ,,~ ,~o Ag ......* ]each or m grate on to the Property after the
Closing Date from any adjoinin.q properties, includin.q properties owned by the City.
(ii) Notwithstanding any other provision of this Agreement, the City, in its capacity a.~
both owner under this Agreement and as landlord of the Property under the Lease contemplated
by this Agreement, shall retain any legal responsibility or liability, subject to available defenses,
the City may have under law for any Pre-Existing Condition. This retained responsibility and duty
includes the duty to assess, remove and remediate Pre-Existinq Conditions on or affectinq th~.
Property as ordered by a state or federal agency, subiect to the availability of a comfort letter.
This provision shall not inure to the benefit of third parties and shall not be interpreted to enlarge
any liabilities owed by the City or to require the City to absorb any duties, responsibilities or
liabilities that it does not already have for the Pre-Existing Conditions.
(iii) The Developer agrees to provide reasonable notice to the City of any claims by
adioining or affected property owners, third parties, or parties makinq claims through a citizen
action or private right of action under applicable law, environmental statutes or regulations which
arise out of or are related to Pre-Existinq Conditions on the Property. Upon receipt of such
notice, to the fullest extent allowed by law, the City agrees to defend, hold harmless and
indemnity Developer for costs and expenses associated with responding to any claims by
adioining property owners, third parties, or parties making claims through a citizen action or
private right of action under applicable environmental statutes or requlations which arise out of or
are directly related to Pre-Existing Conditions on the Property.
(iv) To the fullest extent allowed by law, the City agrees to indemnity Developer for
reasonable costs and expenses associated with responding to any legally enforceable order
regarding Pre-Existing Conditions from any governmental agency or court with proper jurisdiction
to the extent that the City, after Developer has given reasonable notice of the qovernmental order
to the City, does not timely and reasonably respond to said inquiry or order and if the Developer
allows full access to the Property as necessary, as provided herein. The City's right of appeal and
negotiation are not waived by the foregoing and the filing of an appeal or negotiation with the.
governmental agency are considered timely and reasonable response. However, the City agrees
to indemnify Developer for any penalties and fines Developer incurs as a result of any such
appeal or negotiation.
(v) The City shall provide reasonable notice to Developer prior to requesting access for
the purposes set forth above. Developer agrees to allow the City to have access to and use of
the Property to times and locations which will minimize any disruption and which will not
materially or unreasonably interfere with the operation or possession of the Property as required
to respond to any governmental inquiry or order as described above. Except as set out below,
the terms of this provision shall not be construed to require that the Developer is under any
obligation to the City to move, damage, or modify personal proper[y, fixtures, or buildings on th~
Property or to allow the City to affect or modify the Lease described in this Agreement, whether
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by lien, easement, or governmental order, except to the extent that use limitations and
environmental protection easements may be placed on the Property which do not change or
interfere with the actual or proposed use of the Property by Developer. The Developer agrees
that it will not install ddnkinq water wells or otherwise obtain potable water for the purpose of
consumption or bodily contact from the groundwater underneath the Property and agrees tn
execute any necessary waivers or easements to that effect. If the City is required 'by a state or
federal agency to take such action which materially or unreasonably interferes with the operation
or possession of the Property, or otherwise damaqes the property of Developer, then the City
shall be required to pay the reasonable costs associated with such activity, including, without
limitation, loss of income, economic damaqes, property damage, and other costs and expenses,
whether temporary or permanent in nature, incurred by Developer by reason of the interferenc~
(h) Utilities. The City shall provide all necessary utilities to the Property in order to develop,
construct and operate the Minimum Improvements.
apply:
(i) Definitions. For the purposes of this Development Agreement, the following definitions shall
(i) "Environmental Law" means any and all federal, state and/or local laws, regulations
and legal requirements pertaining to (i) the protection of health, safety and the indoor and outdoor
environment, (ii) the conservation, management or use of natural resources and wildlife, (iii) the
protection, access to or use of surface water and groundwater, (iv) the management,
manufacture, possession, presence, use, generation, transportation, treatment) storage, disposal,
Release, threatened Release, abatement, removal, remediation or handling of, or exposure to,
any Hazardous Substance or (v) pollution (including, without limitation, any Release to air, land,
surface water and groundwater), and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by the
Superfund Amendment and Reauthorization Act of 1986, 42 USC 9601 et seq; the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and the
Hazardous and Solid Waste Amendments of 1984, 42 USC 6901 et seq.; the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq.; the
Clean Air Act of 1966, as amended, 41 USC 7401 et seq.; the Toxic Substances Control Act of
1976, 15 USC 2601 et seq.; the Hazardous Substances Transportation Act, 49 USC App. 1801 et
seq.; the Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et seq.; the Oil
Pollution Act of 1990, 33 USC 2701 et seq.; the Emergency Planning and Community
Right-to-Know Act of 1986, 42 USC 11001 et seq.; the National Environmental Policy Act of 1969,
42 USC 4321 et seq.; the Safe Drinking Water Act of 1974, as amended, 42 USC 300(0 et seq.;
Chapter 455B of the Iowa Code; any similar, implementing or successor law to any of the
foregoing and any amendment, rule, regulation, order or directive issued thereunder.
(ii) "Hazardous Substance" or "Hazardous Substances" means any hazardous or toxic
substance, material or waste, which is or becomes regulated by any local government, the State
of Iowa or the United States Government. It includes, without limitation, any material or
substance that is (i) defined as a "hazardous substance" or "hazardous waste" under Chapter
455B, Iowa Code, (ii) petroleum and petroleum products, (iii) asbestos containing materials in any
form or condition, (iv) designated as a ~hazardous substance" pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. § 1321), (v) defined as a "hazardous waste
pursuant to § 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. §6901 et
seq., (vi) defined as a "hazardous substance" pursuant to § 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, U.S.C § 9601 et seq., or (vii) defined
as a "regulated substance" pursuant to Subchapter IX, Solid Waste Disposal Act (Regulation of
Underground Storage Tanks), 42 U.S.C. § 6991 et seq.] The term "Hazardous Substance" shall
not include any air emissions discharged into the atmosphere as allowed by a duly issued permit
from the applicable governmental agency.
(iii) "Release" means any spilling, migrating, seeping, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of any Hazardous
Substance into the indoor or outdoor environment, including, without limitation, the abandonment
or discarding of barrels, drums, containers, tanks and other receptacles containing or previously
containing any Hazardous Substance and including without limitation the migration of any
Hazardous Substance onto the Property from an adjacent property.
2.4 Representations of City. In order to induce Developer to enter into this Agreement, City hereby
represents and warrants to Developer:
(1) ~* *h, r'~,,o;,,g r~,o r-~*,, ~,~o ~,,,~,,~ ....... ; City is the owner of the Property.
.................. , ~.-., ........... r- .......on
(2) At the Closing Date, unless waived by Developer, City has been awarded Vision Iowa funding
in an amount sufficient to construct a minimum 100,000 square foot conference and education
center facility and parking facility.
(3) City has duly obtained all necessary authorizations, approvals and consents for its execution,
delivery and performance of this Agreement, and that it has full power and authority to execute,
deliver and perform its obligations under this Agreement.
(4) This Agreement is a valid and legally binding instrument of the City enforceable in
accordance with its matedal terms, except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting creditors' rights generally.
9
(5) The execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this
Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of,
the any contractual restriction, evidence of indebtedness, agreement or instrument of whatever
nature to which the City is now a party or by which it or its property is bound, or constitute a
default under any of the foregoing.
(6) Other than as disclosed on Schedule 2.4(6) attached hereto, there are no actions, suits or
proceedings pending or threatened against or affecting the City in any court or before any
arbitrator or before or by any governmental body in which there is a reasonable possibility of a
adverse decision which could materially adversely affect the validity of the Agreement or the
City's ability to perform its obligations under this Agreement.
(7) The City will cooperate with the Developer to resolve any traffic, parking, trash removal or
public safety problems which may arise in connection with the construction and operation of the
Minimum Improvements.
2.5. Representations and Warranties of Developer. The Developer makes the following representations
and warranties;
(1)
The Developer is a limited liability company duly organized and validly existing under the
laws of the State of Iowa, and has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as presently proposed to be
conducted, and to enter into and perform its obligations under the Agreement.
(2)
This Agreement has been duly authorized, executed and delivered by the Developer and,
assuming due authorization, execution and delivery by the City, is in full force and effect and
is a valid and legally binding instrument of the Developer enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other
laws relating to or affecting creditors' rights generally.
(3)
The execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the fulfillment of or compliance with the terms and conditions of
this Agreement are not prevented by, limited by, in conflict with, or result in a violation or
breach of, the terms, conditions or provisions of the articles of organization or the operating
agreement of the Developer or any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a party or by
which it or its property is bound, or constitute a default under any of the foregoing.
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(4)
There are no actions, suits or proceedings pending or threatened against or affecting the
Developer in any court or before any arbitrator or before or by any governmental body in
which there is a reasonable possibility of a adverse decision which could materially adversely
affect the business, financial position or result of operations of the Developer or which affects
the validity of the Agreement or the Developer's ability to perform its obligations under this
Agreement.
(5)
The Developer will cause the Minimum Improvements to be constructed in accordance with
the material terms of this Agreement, the Urban Renewal Plan and all local, State and federal
laws and regulations, except for variances necessary to construct the Minimum
Improvements contemplated in the Construction Plans.
(6)
The Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner,
alt material requirements of all applicable local, state, and federal laws and regulations which
must be obtained or met before the Minimum Improvements may be lawfully constructed.
(7)
At the Closing Date, the Developer shall have firm commitments for commercially reasonable
construction and permanent financing for the Project in an amount sufficient, together with
equity commitments, to successfully complete the Minimum Improvements in accordance
with the construction Plans contemplated in this Agreement.
(8)
The Developer will cooperate with the City to resolve any traffic, parking, trash removal or
public safety problems which may arise in connection with the construction and operation of
the Minimum Improvements.
2.6 Conditions to Closing. The closing of the transaction contemplated by this Agreement and all the
obligations of Developer and City under this Agreement are subject to fulfillment, on or before the Closing
Date, of the following conditions:
(1)
The representations and warranties made by City in Section 2.3 and Section 2.4 and
by Developer in Section 2.5 shall be correct and satisfied as of the Closing Date with the
same force and effect as if such representations were made at such time.
(2) Developer, in its sole and absolute discretion, having completed and approved of any
inspections done by Developer hereunder.
(3) City shall have acquired lawful possession of all of the Property.
]1
(4) City shall have approved all appropriate zoning, subdivision, or platting of the Property
necessary for the lease and immediate development and construction of the Property. Any
extraordinary conditions imposed, as a part of the zoning, platting or subdivision must be
satisfactory to Developer, in its sole opinion.
(5) Developer shall be in material compliance with all the terms and provisions of this Agreement.
(6) Developer shall have furnished City with evidence, in a form satisfactory to City (such as a
letter of commitment from a bank or other lending institution), that Developer has firm financial
and/or equity commitments sufficient in amount to lease Property and complete construction of
Minimum Improvements (as defined herein) in conformance with Construction Plans (as defined
herein), or City shall have received such other evidence of Developer's financial ability as in the
reasonable judgment of City is required. Developer shall provide evidence of a commitment of
equity funds for the Phase I hotel complex described in Section 3.1A in an amount not less than
30% equity of total project costs.
(7)
D.
Receipt of an opinion of counsel to Developer in the form attached hereto as Exhibit
(8) All obligations under of the City under Section 2.3 and Section 2.4 have been
satisfied.
(9)
Developer and the City shall have entered into a ~) Minimum Assessment
Agreement, in the form attached hereto as Exhibit E, L~(ii) a Lease, in the form
attached hereto as Exhibit C, (iii) a Parking Use Agreement, in the form attached hereto as
Exhibit 6, and (iv) a Management Agreement, in substantially the form attached hereto as
Exhibit F, for the conference and education center.
2.7 Closing. The closing shall take place on or before ~ March 15, 2001 (the "Closing Date"),
or such other date as the parties may agree in writing; provided, however, in the event that the additional
groundwater and soil sampling of the Property conducted after the demolition of the Property, as provided
for in Section 2.3(a), indicate Hazardous Substances on the Property in excess of any applicable action
level (as defined in Section 2.3(b)), the Closing Date shall be on or before April 1, 2001. Exclusive
possession of Property shall be delivered on the Closing Date, in compliance with the terms of this
Agreement, including City's representations and warranties regarding the same. Consummation of the
Closing shall be deemed an agreement of the parties to Agreement that the conditions of closing shall
have been satisfied or waived. If the conditions set forth in Section 2.6 are not satisfied at Closing Date,
this Agreement shall terminate unless a new Closing Date is established by amendment to this
Agreement. The termination of this Agreement shall be the sole remedy in the event a condition set forth
in Section 2.6 is not satisfied.
2.8 Closing Costs. The Developer shall pay the following costs and expenses in connection with the
closing:
(a) The documentary fee necessary to record the Memorandum of Lease.
(b) Developer's attorney's fees.
(c) Developer's broker and/or real estate commissions and fees, if any.
(d) A pro-rata portion of all taxes as provided in Section 2.9.
The City shall pay the costs and expenses in connection with the closing as set forth in Section 4.1 (5).
2.9 Real Estate Taxes. City shall pay all real estate taxes for all fiscal years which end prior to
Closing Date. Real estate taxes for the fiscal year in which Closing Date occurs shall be prorated
between City and Developer to Closing Date on the basis of a 365 day calendar year. Developer shall
pay all real estate taxes due in subsequent fiscal years pursuant to the Lease. Any proration of real
estate taxes on Property shall be based upon such taxes for the year currently payable.
SECTION 3. REDEVELOPMENT ACTIVITIES
3.1 Required Minimum Improvements. Developer hereby agrees to construct on thee Property the
following, hereinafter "Minimum Improvements":
A. A hotel ~ proiect costing not less than $20,000,000.00 $21,500,000.00 consisting of at
least:
(1) , ' : 190 guest rooms, which include:
,-, ....,., ,-- .............. ,a) Four (4) guest rooms which are part of two (2) three-room
suites consisting offS, a sitting area and upgraded amenities,
(b) ~ Sixteen (16) guest rooms which are part of eight (8) two-
room suites consisting of e~4~, a sitting area and upgraded amenities, and
(c) ten Ten (10) percent of the guest rooms shall be specialty (parlor) suites with unique
or upgraded amenities;
zd~) a 24,000 square foot indoor water park;(~(4) a restaurant;
~ alounge; and
(~)L~_ a gift shop.
B. A 45,000-50,000 square foot office and commercial building at a probable cost of $5.5 million
and associated proprietary parking which shall be constructed not later than twelve (12) months after the
completion of the conference and education center and which shall be the location of the home or
regional office of The Durrant Group. The construction of the office and commercial building by The
Durrant Group is subject to the following conditions:
(a) The Developer shall have constructed the hotel complex referred to in Section 3.1A..
(b) The City shall have constructed the conference and education center of 100,000
square feet or more.
(c) The City shall have constructed sufficient parking for the proposed development.
(d) The Durant Group shall have obtained commercially reasonable financing for the
development and construction of the home/regional office.
(e) The City Council determines that the office and commercial building is consistent with
the Master Plan.
Developer shall lease from the City two (2) acres upon substantially the same terms as the Lease for
sublease to the Durrant Group for the home or regional office and proprietary parking as determined by
the Durrant Group unless the Durrant Group agrees to lease two (2) acres directly from the City upon
substantially the same terms as the Lease.
C. Furthermore, plans shall be submitted by Developer indicating the location of future
expansions of the Minimum Improvements on the Property to provide 150 160 additional guest rooms,
and an 18,000 square foot addition to the water park ~nd edd!t!on_~! pr~pr!et~.'-; p~r~!ng(the "Phase II
Improvements"). Su.m.:c!ent !~nd te ~ccommed~te The City and the Developer agree that the Phase II
Improvements shall be ' ' ' constructed on the parking area to be provided to the
Developer for parking use pursuant to that certain Parking Use Agreement. Prior to commencement of
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the construction of the Phase II Improvements, the City and the Developer shall enter into a lease
agreement pursuant to which the City shall lease to Platinum that part of the parking area necessary for
the construction of the Phase II Improvements. Prior to completion of the construction of the Phase II
Improvements, the City shall provide, at no cost to Developer, additional proprietary parking (minimum
1 t0 spaces) for the Phase II Improvements and replacement parking for the parking area used for the
location ofthe Phase II Improvements. Parking shall be provided pursuant to a parking use agreement.
Developer shall be responsible for the routine day to day custodial maintenance of the parking area,
including snow removal, landscaping trimming, sweeping and trash collection. The City shall be
responsible for all replacement, repair and other maintenance associated with such parking, including,
without limitation, the repair, placement and maintenance of surface potholes, surface reconstruction and
restoration, landscaping replacements, parking space striping and re-caulkinq of the parking area. The
development of the Phase II Improvements shall not be required unless the following conditions are
satisfied:
(a) Developer obtaining commercially reasonable financing for the development and construction
of the Phase II Improvements.
(b)
The occupancy average with respect to the hotel portion of the Minimum Improvements
during any consecutive twenty-four (24) month period of operations of the hotel shall be at
least 85%. Commencing the twenty-fifth (25th) month following the date Developer receives
the certificate of completion from the City for the Minimum Improvements as provided in
Section 3.4 below (the "Certificate of Completion Date"), and every month thereafter,
Developer shall make the occupancy figures for the immediately preceding twenty-four (24)
month period available to the City to review. The foregoing obligation to make available the
occupancy figures shall terminate effective the forty-third month (43rd) following the
Certificate of Completion Date.
(c) The City shall have constructed the conference and education center and parking facilities
within reasonable proximity to the Minimum Improvements.
Environmental assessments of the location of the Phase II Improvements, conducted
immediately prior to the construction of the Phase II Improvements, or any other identification
or discovery by the Developer or any third party, shall not indicate any Hazardous
Substances on the proposed location of the Phase II Improvements that are in excess of any
applicable action level, as defined at 567 Iowa Administrative Code § 133.2, 567 Iowa
Administrative Code Chapter 135, or applicable statewide standard developed under Iowa
Code Chapter 455H, if the Property is statutodly eligible, whichever is less stringenf
However, City shall have the right to meet this condition by obtaining a Comfort Letter a.~
defined at paragraph. 2.3 of this Agreement subiect only to such restrictions, impairments,
]5
and conditions that do not substantially impair the proposed or actual use of the Property,
including Phase II. Any Comfort Letter shall be based on the anticipated use of Phase II and
the Property as outlined in this Agreement. The provisions herein shall not abddge but shall
be in addition to the reciprocal covenants set forth in this Aqreement.
If the above conditions are satisfied, Developer shall be obligated to develop and construct the Phase II
Improvements. If the above conditions are satisfied, the Developer shall have five (5) years from the
Certificate of Completion Date to complete construction of the Phase II Improvements. The obligation of
Developer to construct the Phase II Improvements shall terminate if the above conditions have not been
satisfied within fody-two (42) months of the Certificate of Completion Date.
D~. The Minimum Improvements shall be of quality architectural design and shall be compatible
with neighboring buildings and adjoining conference and education center facilities. The design of
Minimum Improvements shall be compatible with the pedestrian orientation of adjoining streets. The
Minimum Improvements shall provide for reasonable public accessibility to the Riverwalk and Harborwalk
improvements and the conference and education center facility, including a public access easement
through a designated common area of the Property. Consultants recommended by a work group to the
City Manager and agreed upon by the City Council and Developer and retained by the City shall develop
architectural standards and prepare site planning for the entire urban renewal area encompassing the
Property. The work group shall make a recommendation to the City Manager on the selection of an
architect to design the conference and education center. Final determination of architectural standards
and site planning and the selection of the conference and education center architect shall be made by the
City Council. Determination of whether the standards are met in the area shall be made by the work
group.
E. On the Closing Date, Developer and the City shall enter into a minimum assessment
agreement as provided in Iowa Code Section 403.6 (the "Minimum Assessment Agreement") in the form
attached hereto as Exhibit E. The Minimum Assessment Agreement shall establish a minimum
assessment of the Property equal in amount to the amount determined necessary by the City in its sole
judgment to permit the collection of incremental tax revenues sufficient in amount to cause the
indebtedness and all other costs incurred by the City with respect to the Property to be repaid within four
(4) years following the commencement of full operation of the Minimum Improvements. The City shall use
Iowa Code Section 403.6(18) with respect to the collection and payment of taxes under the Minimum
Assessment Agreement.
F. Public gains and benefits qenerated by the Developer's undertaking the obligations under this
Agreement are in the best interest of the City and the residents thereof, and warrant the provision of the
economic assistance set forth in this paragraph. In consideration ofthe Developer's obligation to develop
the Minimum Improvements and promptly constructing the Minimum Improvements in accordance with
this Agreement and creating the employment resulting therefrom, the City shall cause to be provided to
the Developer an annual economic development grant as identified in this paragraph during each year of
the four-year term of the Minimum Assessment Aqreement. Each annual qrant shall be equal to the
difference between (i) the amount of the property taxes levied upon the value of the Property and the
Minimum Improvements for that year and (ii) One Hundred Twenty Five Thousand Dollars ($125,000.00).
Each economic development grant shall be paid in two equal semi-annual installments and shall be paid
immediately upon the City's receipt of incremental taxes in respect of the Property and Minimum
Improvements for the applicable year, and shall be payable solely and only from said incremental taxes
and not from any other source or other City Funds.
G. On the Closing Date, the City and the Developer shall enter into that certain Parkinq Use
Agreement (the "Parking Use Agreement") in the form attached hereto as Exhibit G. The Parkinq Use
Agreement shall provide at no cost to the Developer, during the term of the Lease, the use of the parking
area designated on Exhibit B. There shall be a minimum 290 parking spaces for the Minimum
Improvements and an additional minimum 110 parking spaces for the Phase II Improvements (total
minimum 400 parking spaces). The Developer shall be responsible for the routine day to day custodial
maintenance of the parking area, including without limitation, sweeping, landscape trimming, snow
removal and trash collection. The City shall, at no cost to Developer, be responsible for all replacement,
repair and other maintenance associated with such parking area, including, without limitation, the repair,
placement and maintenance of surface potholes, surface reconstruction and restoration, landscaping
replacements, parking space striping and re--caulking of the parking area. The Parking Use Agreement
shall also, during the term of the Lease, grant to the Developer a right of first refusal to lease and/or
acquire the Phase II parking area and other Development Property as designated on Exhibit B in the
event that the City receives a third party offer to purchase or lease such parking area or Development
Property or in the event that the City determines to condemn or develop said property. The right of first
refusal with respect to the other Development Property shall only be effective for the first 15 years of the
term of the Lease. The Parking Use Agreement shall be transferable with the Lease and shall remain in
effect for the length of the Lease and any extension or renewal of the Lease.
3.2 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the
redevelopment of Property and the construction of Minimum Improvements thereon (the "Construction
Plans") shall be in substantial conformity with the Urban Renewal Plan, this Agreement, and all applicable
State and local laws and regulations. Developer shall submit to City, for approval by City plans, drawings,
specifications, and related documents with respect to the Minimum Improvements to be constructed by
Developer on the Property. All work with respect to the Minimum Improvements shall be in substantial
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conformity with the Construction Plans approved by City and shall be coordinated with City improvements
in the general vicinity of Property, including, but not limited to, the Riverwalk, the conference and
education center and street and utility improvements.
3.3 Timing of Improvements. Developer hereby agrees that construction of the Minimum
Improvements on Property shall be commenced within six (6) months after the Closing Date, and shall be
substantially completed within eighteen (18) months after the Closing Date. The time frames for the
performance of these obligations shall be suspended during the period of any delays caused by acts of
God and matters not within the control of Developer including, but not limited to, extreme weather
conditions and/or other natural causes, casualty, labor problems (including, but not limited to, strikes,
walk-outs, picketings, boycotts and shutdowns), governmental restriction upon the availability or use of
labor or materials, or, insurrection, embargoes, or delays in providing necessary consents or approvals.
The time for performance of such obligations shall be extended only for the period of such delay.
3.4 Certificate of Completion. Promptly upon substantial completion of the Minimum Improvements
in accordance with those provisions of this Agreement relating solely to the obligations of Developer to
construct the Minimum Improvements (including the dates .for beginning and completion thereof), City
shall furnish Developer with an appropriate instrument so certifying. Such certification shall be a
conclusive determination of the satisfaction and termination of the agreements and covenants in this
Agreement and in the Lease with respect to the obligations of Developer to construct the Minimum
Improvements.
SECTION 4. CITY PARTICIPATION
4.1 Improvements by City. For and in consideration of Developer's obligations hereunder to
construct Minimum Improvements, City agrees to:
(1) Apply for Vision Iowa Funds to construct a minimum 100,000 square foot conference and
education center facility and parking facility in the Project Area.
(2) At the time of Closing, enter into a ten (10) year management contract, in substantially the
form of Exhibit F attached hereto, with Developer, or a related affiliate controlled by James
Rix, to manage said conference and education center facility.
(3)
(3) By the Certificate of Completion Date, have constructed e~ and provided access
to sufficient additional pub!!c parking spaces within reasonable proximity to the Minimum
Improvements.
(4)
Parking ma:.' be subject to use~ fees as determined by City. Preprieta."/parking fo,
]g
n=,,,,~,,,,,~,~ ,,p,~,~*~ .... h~, h, *h= ,,,~ ........ ~ha~*,, ,-~ n~,,~ .... At the [ me of Closing,
enter into that certa n Park ng Use Agreement, in substantially the form of Exhibit G attached
hereto, with Developer to provide park ng for the Minimum Improvements in the area
designated on Exhibit B,
(4) Construct Riverwalk improvements as provided in the City's FY 2001-2005 Capital
Improvement Program as approved by the City Council in March 2000.
(5) Pay the following costs and expenses in connection with the closing:
(a) The transfer fee imposed on the conveyance, if any.
(b) A pro-rata portion of all taxes as provided in Section 2.9.
(c) All special assessments whether levied, pending or assessed.
(d) City's attorney's fees.
(e) City's broker and/or real estate commissions and fees, if any.
(f) Such other costs as are imposed upon the City as more particularly set forth in this
Agreement.
(6) Pay all costs associated with construction of any streets, sidewalks, landscaping and lighting
on property not leased by Developer, such streets, landscaping and lighting shall be consistent
with the character and requirements recommended to the City Manager by the work group
agreed upon by the City and the Developer.
4.2 Exclusivity. City agrees that it shall not enter into any other agreement that includes the
construction of a hotel on publicly owned land in the Ice Harbor Urban Renewal District with any other
party for a period of fifteen (15) years after completion of Developer's project (the "Exclusivity Period').
On completion of the Phase II Improvements, the Exclusivity Period shall be extended for the appropriate
pedod of time in order that the Exclusivity Period shall be for a period of fifteen (15) years commencing on
the date the Developer receives the certificate of completion from the City related to the completion of the
Phase II Improvements.
SECTION ,5. COVENANTS OF DEVELOPER
5.1 Insurance Coverages. Developer shall maintain insurance as set forth in the Lease.
5.2 Non-Discrimination. In carrying out the project, Developer shall not discriminate against any
employee or applicant for employment because of race, religion, color, sex, national origin, age or
disability.
5.3 Conflict of Interest. Developer agrees that no member, officer or employee of City, or its
designees or agents, nor any consultant or member of the governing body of City, and no other public
official of City who exercises or has exercised any functions or responsibilities with respect to the project
during his or her tenure, or who is in a position to participate in a decision-making process or gain insider
information with regard to the project, shall have any interest, direct or indirect, in any contract or
subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any
activity, or benefit therefrom, which is part of this project at any time during or after such person's tenure.
5.4 Non-transferability. Prior to the issuance of the Certificate of Completion, this Agreement may
not be assigned by Developer nor may the Lease be transferred without the prior written consent of the
City. After the issuance of the Certificate of Completion, the Developer shall have the right to transfer and
assign this Agreement and the Lease to a third party, subject to the consent of the City, which consent
shall not be unreasonably withheld, provided said third party transferee agrees to comply with the terms
and conditions of this Agreement. Notwithstanding the foregoing, Developer shall have the right to assign
a designated portion of the Lease to The Durant Group with respect to the home or regional office.
5.5 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every
successor in interest to Property or any part thereof, and the Lease shall contain covenants on the part of
Developer for itself, and such successors and assigns, that Developer and such successors and assigns,
shall:
(1) Devote Property to, and only to and in accordance with, the uses specified in this
Agreement and the Urban Renewal Plan;
(2) Operate the Minimum Improvements only as a hotel, water park and related necessary
activities and purposes unless the City consents to an alternative use in City's sole discretion;
and
(3) Not discriminate upon the basis of race, religion, color, sex, national origin, age or disability in
the sale, lease, rental, use or occupancy of Property or any improvements erected or to be
erected thereon, or any part thereof.
5.6 Maintenance of Properties. The Developer will maintain, preserve and keep the Minimum
Improvements in good repair and working order, ordinary wear and tear accepted, and from time to time
will make all necessary repairs, replacements, renewals and additions.
20
5.7 Maintenance of Records. The Developer will keep at all times proper books of record and
account in which full, true and correct entries will be made of all dealings and transactions of or in relation
to the business and affairs of the Developer in accordance with generally accepted accounting principles,
consistently applied throughout the period involved, and the Developer will provide reasonable protection
against loss or damage to such books of record and account.
5.8 Compliance with Laws. The Developer will comply with all laws, rules and regulations relating to
the Minimum Improvements, other than laws, rules and regulations the failure to comply with or which the
sanctions and penalties resulting therefrom, would not have a material adverse effect on the business,
property, operations, or condition, financial or otherwise, of the Developer.
5.9 Non-Discrimination. The Developer shall substantially comply with all federal, State of iowa and
local laws prohibiting discrimination. The Developer shall not discriminate against any person or group of
persons on account of age, race, religion, creed, color, sex, national origin, ancestry, or disability.
5.10 Available Information. Upon request, the Developer shall make available to the City to review
copies of its financial statements for the preceding fiscal year, prepared in accordance with generally
accepted accounting principles and accompanied by a report of an independent public accountant
selected by the Developer to the effect that such financial statements have been prepared in conformity
with generally accepted accounting principles and present fairly, in alt matedal respects, the financial
condition of the Developer and that the examination of such financial statements by such accountant has
been undertaken in accordance with generally accepted auditing standards. Any financial statements
that are requested and reviewed by the City shall be treated by the City as confidential trade secrets of
Developer under Iowa Code Chapter 22, to the extent permitted by law.
SECTION 6. INDEMNIFICATION
(1) Developer releases City and the governing body members, officers, agents, servants and
employees thereof (hereinafter, for purposes of this Section 6, the "indemnified Parties") from,
covenants and agrees that the Indemnified Parties shall not be liable for, and agrees to
indemnity, defend and hold harmless the indemnified parties against any loss or damage to
property or any injury to or death of any person occurring at or about or resulting from any defect
in Minimum Improvements.
(2) Except for any willful misrepresentation or any willful or wanton misconduct or any unlawful
act of the Indemnified Parties, Developer agrees to protect and defend the Indemnified Parties,
now or forever, and further agrees to hold the Indemnified Parties harmless, from any claim,
demand, suit, action or other proceedings whatsoever by any person or entity whatsoever arising
2!
or purportedly adsing from (i) any violation by Developer of any agreement or condition of this
Agreement (except with respect to any suit, action, demand or other proceeding brought by
Developer against City to enforce its rights under this Agreement) or (ii) the construction,
installation, ownership and operation of Minimum Improvements or (iii) environmental
contamination which affects the condition of the Property and which is caused by the Developer
and occurs after the Developer takes possession of the Property.
(3) Except for any misrepresentation or any willful or wanton misconduct or any unlawful act of
Developer, the City agrees to protect and defend Developer, now or forever, and further agrees to
hold Developer harmless, from any claim, demand, suit, action or other proceedings whatsoever
by any person or entity whatsoever arising or purportedly arising from (i) any violation by the City
of any agreement or condition of this Agreement (except with respect to any suit, action, demand
or other proceeding brought by the City against Developer to enforce its rights under this
Agreement).
(4) The Indemnified Parties shall not be liable for any damage or injury to the persons or property
of Developer or its officers, agents, servants or employees or any other person who may be about
Minimum Improvements due to any act of negligence of any person, other than any act of
negligence on the part of any such indemnified party or its officers, agents, servants or
employees.
(5) All covenants, stipulations, promises, agreements and obligations of City contained herein
shall be deemed to be the covenants, stipulations, promises, agreements and obligations of City,
and not of any goveming body member, officer, agent, servant or employee of City in the
individual capacity thereof.
(6) The provisions of this Section 6 shall survive the termination of this Agreement.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES
7.1 Events of Default Defined. The following shall be "Events of Default" under this Agreement and
the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or more of the
following events:
(1) Any event of default by Developer or the City under the Lease.
(2) Failure by Developer to cause the construction of Minimum Improvements to be commenced
and completed pursuant to the terms, conditions and limitations of this Agreement.
22
(3) Failure by Developer to cause Minimum Improvements to be reconstructed when required
pursuant to the Lease.
(4) Transfer of any interest by Developer of Minimum Improvements in violation of the provisions
of this Agreement.
(5) Failure by Developer to substantially observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement or the
Lease.
(6) Failure by the City to substantially observe or perform any other covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement or the
Lease.
(7) Commencement of foreclosure proceedings by the holder of any mortgage on Developer's
interest in the Property, or any improvements thereon, or any portion thereof, as a result of any
default under the applicable mortgage documents.
(8) Developer shall:
(a) file any petition in bankruptcy or for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under the United States Bankruptcy
Act of 1978, as amended, or under any similar federal or state law; or
(b) make an assignment for the benefit of its creditors; or
(c) admit in writing its inability to pay its debts generally as they become due; or
(d) be adjudicated a bankrupt or insolvent: or if a petition or answer proposing the
adjudication of Developer as a bankrupt or its reorganization under any present or future
federal bankruptcy act or any similar federal or state law shall be filed in any court and
such petition or answer shall not be discharged or denied within ninety (90) days after the
filing thereof, or a receiver, trustee or liquidator of Developer or of Minimum
Improvements, or part thereof, shall be appointed in any proceedings brought against
Developer, and shall not be discharged within ninety (90) days after such appointment, or
if Developer shall consent to or acquiesce in such appointment.
7.2 Notice of Default. The non-defaulting party shall issue a written notice of default providing
therein a thirty (30) day period in which the defaulting party shall have an opportunity to cure such default,
provided that cure is possible and feasible.
7.3 Remedies Upon Default. If the default remains unremedied after such thirty (30) day period, the
non-defaulting party shall have the right to do one or more of the following:
(1) exercise any remedy provided by law or available to a party under the Lease;
(2) suspend the non-defaulting party's performance under this Agreement;
(3) terminate this Agreement and the Lease;
(4) withhold certificafion of completion with respect to the Minimum Improvements;
(5) require payment by the defaulfing party of any costs incurred by the non-defaulting party in
connection with the default; and
(6) take such action as may be necessary to remove Developer from Property.
7.4 No Implied Waiver. In the event any agreement contained in this Agreement should be breached
by any party and thereafter waived by any other party, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach
hereunder.
SECTION 8. GENERAL TERMS AND PROVISIONS
8.1 Notices and Demands. Whenever this Agreement requires or permits any notice or written
request by one party to another, it shall be in writing, enclosed in an envelope, addressed to the party to
be notified, properly stamped, sealed and deposited in the United States Mail, and
(1) in the case of Developer, is addressed to Platinum Holdings, LLC, 801 Jackson Street,
Dubuque, Iowa 52001.
(2) in the case of City, is addressed to the City Manager, City Hall, 50 W. 13th Street, Dubuque,
Iowa 52001.
or at such other address with respect to either party as that party may, from time to time designate in
writing and forward to the other as provided in this Section. Any notice delivered hereunder shall be
deemed delivered upon the earlier of the actual receipt or two (2) business days after posting.
24
8.2 Compliance with Laws and Regulations. Developer and the City shall comply with all applicable
City, State and federal laws, rules, ordinances, regulations and orders.
8.3 Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit of City and Developer and their
respective successors and assigns.
8.4 Entire Agreement. This Aqreement, along with the Lease and Minimum Assessment Aqreement,
constitutes the entire agreement between the City and the Developer regarding the development of the
Property and supercedes all previous agreements between the parties, including, without limitation, thaf
certain Development Agreement dated June 19, 2000, by and between the City and Platinum Hospitality
Group, LLC, which Development Agreement was subsequently assigned to Developer.
IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its name and
behalf by its Mayor and attested by its City Clerk, and Developer has caused this Agreement to be duly
executed in its name and behalf by James P. Rix, its Chief Executive Officer on or as of the day first
above written.
CITY OF DUBUQUE, IOWA
DEVELOPER
By: By:
Terrance M. Duggan, Mayor
James P. Rix, Chief Executive Officer
By: By:
Jeanne F. Schneider, City Clerk
Donald Iverson, Member
F:\USER$\Pm, yhre~.WPDOC$\UR\!ce H=rber\De':Agree.p]~.wpd January 11, 2001
25
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") made as of the day of 200_, March,
2001, by and between the CITY OF DUBUQUE, IOWA, a municipal corporation (Lessor), and PLATINUM
HOLDINGS, LLC, an Iowa limited liability company (Lessee).
WHEREAS, Lessor and Lessee have entered into ' a~,,~ ..... , .....
a certam ...... ~ ........ ~ ~..~t Amended Development
A~'eemant dated as of ,2000 January ,2001 (the "Development Agreement"); and
WHEREAS; the Development Agreement contemplates that the parties enter into a lease for certain real
estate in Dubuque County, Iowa;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties
hereto agree as follows:
ARTICLE 1
DEMISE AND TERM
1.1 Demise and Term. In consideration of the rents hereinaf[er reserved and the terms, covenants,
conditions and agreements set forth in this Lease, Lessor hereby leases to Lessee the real property described in
Exhibit A attached to and made a part of this Lease, together with any and all easements and appurtenances thereto
and subject to any easements and restrictions of record (the "Demised Premises"), to have and to hold for an initial
term commencing as of the date of this Lease and ending on the day of ,2 March, 2051 (the
"Initial Term"), subject to all of the terms, covenants, conditions and agreements contained herein. On completion
of the Phase II Improvements (as def'med in Section 3.1 of the Development Agreement), the term shall be extended
for the appropriate period of time In order that the Lease term shall be fifty (50) years from the time the Lessee
receives the Certificate of Completion related to the completion of the Phase II Improvements.
1.2 Minimum Improvements. Lessee shall construct the Minimum Improvements (as defined in
Section 3.1 of the Development Agreement) in the time and manner required by the Development Agreement.
1.3 Parking Prig.hts. For ~-x~y pm'~. cf 'Az Demised ~rYe..m!ses cn wh!eh Lessee has net commence:]
~ ..... ~. -**~ ........ rtL. Use Agreemetu. In connection with this Lease, the Lessor and Lessee shall enter into ~
Parkin~ Use Agreemant~ in substantially the form of Exhibit G (the "Parkin~ Use Agreement"), pursuant to which
the Lessor shall provide parking to Lessee at no cost. The Parkin~ Use Agreement shall be transferable with this
Lease and shall remain in effect for the length of the Initial Term and any extension or renewal of this Lease.
ARTICLE 2
RENT
Lessee shall pay Lessor (in addition to taxes, assessments, and other charges required to be paid under this
Lease by Lessee) rent for the Demised Premises as follows:
2.1 Base Rent. Until Lessee has received a Cei~ificate of Completion for the Minimum Improvements
(as set forth in Section 3.4 of the Development Agreement), Lessee shall pay Base Rent in the amount of $1.00 per
year. For the first ten years of this Lease following receipt of such Certificate of Completion, Lessee shall pay
Lessor rent as follows:
Year Amount
One through T~e~,nnn nn~ .... *h ..... h $22,860.00
Four tlu'ough Five $30,480.00
Six through Seven $45,720.00
2
Eight through Nine
~ [ $53,340.00
$66,040.00
All such Base Rent shall be payable in twelve (12) equal monthly installments on the first day of each
month. Notwithstanding the foregoing, in the event that Developer completes the Phase II Improvements in
accordance with Section 3.1 of the Development Agreement, the Base Rent in effect at such time of completion
shall become the Base Rent for an extended period of three (3) years following such completion, and thereafter, the
above schedule shall resume unabated and in full and shall be extended by such additional three (3) year period.
Fer rent~ Rental payable after the tn'ne such schedule has completed,_ .........................
................ r ....... ~ ....~ ...... rr ............. shall be computed as follows.
(ii)
(iv)
(v)
The annual rental in effect at the completion of the above rental schedule shall be adiusted by
the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, U.S. City
Average, All Items published by the Bureau of Labor Statistics of the U.S. Department of Labor in
effect on the commencement date of the rental period immediately following the completion of the
above rental schedule over the base Consumer Price Index in effect on the date one (1) year prior
thereto. The annual rental computed under this subparagraph (i) shall be the annual Base Rent for
the Demised Premises for the one (1) '/ear period immediately following the completion of the
above rental schedule. The armual Base Rent o;v*,,
The ~-znnua! rent shall be paid in twelve (12) equal monthly installments.
(ii)
The annual rental for the one (1) year period following the rental period in subparagraph (i)
above, and for each one (1) year period thereafter, shall be adiusted by the percentage increase, if
any, in the Consumer Price Index for All Urban Consumers, U.S. City Average, All Items
published by the Bureau of Labor Statistics of the U.S. Department of Labor in effect on the
commencement date of the new one (1) year period over the base Consumer Price Index in effect
on the commencement date of the immediately preceding one (1) year period. The annual rentals
computed under this subpara,olaph (ii) shall be the annual Base Rent for the Demised Premises for
the one (1) year period immediately following the completion of the prior one (1) year period.
The annual Base Rent shall be paid in twelve (12) equal monthly installments.
(iii)
If during the Initial Term of this Lease, or any extension or renewal thereofi the Bureau of
Labor Statistics, U.S. Department of Labor, ceases to maintain said Consumer Price Index, such
other index or standard as will most nearly accomplish the intent and purpose of the Consumer
Price Index and the use thereof by the parties hereto shall be used in determining the amount of
any such adjustment.
ARTICLE 3
TITLE TO IMPROVEMENTS AND TRADE FIXTURES
3.1 Trade Fixtures. For the purposes of this Lease, "Trade Fixtures" shall mean all of Lessee's
personal property located on the Demised Premises used in Lessee's business. Title to Lessee's trade f~xtures (the
"Trade Fixtures") is and shall be the sole and exclusive property of Lessee during the term of this Lease and shall
remain the sole and exclusive property of Lessee after the expiration or termination of this Lease, for whatever
3
reason. Lessor acknowledges and understands that it shall have no right, title or interest in or to Lessee's Trade
Fixtures either dining the term of this Lease, or thereafter (except as hereinafter provided). Lessor acknowledges
and agrees that Lessee shall have the right to encumber, sell, or hypothecate Lessee's Trade Fixtures, to remove
them fi.om the Demised Premises, or to otherwise deal with all or any portion of such Lessee's Trade Fixtures, at
Lessee's sole discretion. Upon ten (10) days' prior written notice to Lessor, Lessor shall execute and deliver to
Lessee a certificate in mcordable form prepared by Lessee stating that Lessor has no interest or right in or to
Lessee's Trade Fixtures, as well as any other or further document which Lessee may reasonably request from
Lessor.
3.2 Improvements. On delivery of possession of the Demised Premises to Lessee, Lessee shall
construct on the Demised Premises the Minimum Improvements as required by the Development Agreement any
...... ~ ......... ~,. ......... ,the Improvements ). It shall be unreasonable for Lessor to witlthold such consent if such
design, appearance and quality are generally compatible with other such buildings in the area. Subject to applicable
law and the obligations imposed on Lessor as a governmental entity, Lessor agrees to process as expeditiously as
possible all permits, variances and approvals reasonably required to develop and construct the Improvements on the
Demised Premises. All improvements presently on the Demised Premises and all Improvements hereafter
constructed on the Demised Premises are and shall be the property of Lessee during the continuance of the term of
this Lease and no longer. Subject to the payment obligations of Lessor set forth below, upon any termination of this
Lease, by reason of any cause whatsoever, if the Improvements or any part thereof shall then be on the Demised
Premises, all of Lessee's right, title, and interest therein shall cease and terminate, and title to the Improvements
shall vest in Lessor, and the Improvements or the part therenfthen within the Demised Premises shall be surrendered
by Lessee to Lessor. No further deed or other instnunent shall be necessary to conftm~ the vesting in Lessor of title
to the Improvements. However, upon any termination of this Lease, Lessee, upon request of Lessor, shall execute,
acknowledge and deliver to Lessor a quitclaim deed confh'ming that all of Lessee's right, title and interest in or to
the Improvements has have expired, and that title to the Improvements has vested in Lessor.
ARTICLE 4
ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
4.1 Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by mortgage, deed oflrast
or other proper instrument, its leasehold interest and estate in the Demised Premises, together with all Improvements
on the Demised Premises, as security for any indebtedness of Lessee, provided that no such encumbrance shall
extend beyond the term of this Lease. Lessee shall provide prompt written notice to Lessor of any such encumbrance
together with a copy of such encumbrance. In the event of any judicial or nonjudicial foreclosure under any
mortgage, deed of trust or other similar instrument made by Lessee covering its leasehold interest in the Demised
Premises, Lessor shall, upon such foreclosure or sale, recognize the purchaser thereunder as lessee under this Lease,
provided such purchaser expressly agrees in writing to be bound by the terms of this Lease.
4.2 Notice to Holder of Encumbrance; Right of Holder to Cure Lessee's Default. If Lessee shall
encumber its leasehold interest and estate in the Demised Premises and if Lessee, or the holder of the indebtedness,
its successors and/or assigns (the "Holder") secured by the encumbrance shall give notice to Lessor of the existence
of the encumbrance and the address of the Holder, then Lessor shall mall or deliver to the Holder, at such address, a
duplicate copy of all notices in writing which Lessor may, fi.om time to time, give or serve on Lessee under and
pursuant to the terms and provisions of this Lease. The copies shall be mailed or delivered to the Holder at, or near
as possible to, the same time the notices are given to or served on Lessee. The Holder may, at its option, at any time
before the fights of Lessee shall be terminated as provided in this Lease, pay any of the rents due under this Lease or
pay any taxes and assessments, or do any other act or thing required of Lessee by the terms of this Lease, or do any
act or thing that may be necessary and proper to be done in the observance of the covenants and conditions of this
Lease or to prevent the termination of this Lease; provided, however, that the doing of any act or thing requiring
possession of the Demised Premises shall be subject to the further rights of Holder as set forth in Section t6.2. All
payments so made and all things so done and performed by the Holder shall be effective to prevent a foreclosure of
the rights of Lessee thereunder as the same would have been if done and performed by Lessee.
ARTICLE 5
TAXES
4
Until Lessee has received a Certificate of Completion for the Minimum Improvements (as set forth in
Section 3.4 of the Development Agreement), the Lessor shall be responsible for all real estate taxes levied, taxed or
imposed upon the Real Estate. After the completion of the Minimum Improvements, Lessee agrees to pay as
additional rent an mount equal to real estate taxes upon the mai estate of the Demised Premises that become
payable during the term hereof and which would become delinquent if not so paid during the term hereof. Lessee
shall further provide to Lessor official receipts of the appropriate taxing authority or other evidence satisfactory to
Lessor evidencing payment thereof.
During the term of this Lease, Lessee further agrees to pay all other taxes, rates, charges, levies and
assessments, general and special, of every name, nature and kind, whether now known to the law or hereafter
created which may be taxed, charged, assessed, levied or imposed upon said real estate and which become payable
during the term hereof and which would become delinquent if not so paid during the term hereof, any buildings or
improvements thereon which may be taxed, charged, assessed, levied or imposed upon the leasehold estate hereby
created and upon the reversionary estate in said real estate during the term hereof and which become payable during
the term hereof and which would become delinquent if not so paid during the term hereof, and all such other taxes,
rates, charges, levies and assessments shall be paid by Lessee as they become due and before they become
delinquent during the term hereof.
Lessee agrees to timely pay all taxes, assessments or other public charges levied or assessed by lawful
authority (but reasonably preserving Lessee's fights of appeal) against its personal property on the premises, during
the term of this Lease.
Nothing herein shall require Lessee to pay any of Lessor's income taxes, surtaxes, excess profit taxes or
any taxes on the rents reserved to Lessor hereunder.
Lessee shall at all times have the tight to contest in good faith, in any proper proceedings, in the name of
Lessor if necessary, the payment or satisfaction of any such taxes, assessments, rates, charges or levies so agreed to
be paid by Lessee, if the validity thereof, or the fight to assess or levy the same against or collect the same from said
Demised Premises or Improvements, shall be disputed, but only to the extent permitted under the Minimum
Assessment Agreement between Lessor and Lessee with respect to the Demised Premises. Upon the conclusion of
any such suit or proceedings, or not less than three (3) months prior to the date when the fight to redeem therefrom
expires, whichever will be the earlier, Lessee shall promptly pay and satisfy such disputed tax, assessment or other
charge as f'mally determined, together with all expenses, costs and attorneys' fees whatsoever incurred in connection
therewith.
ARTICLE 6
REPAIRS
Lessee shall at all times during the term of this Lease, at Lessee's own costs and expense, keep the
Demised Premises and the Improvements thereon, and all sidewalks, curbs, and all appurtenances to the Demised
Premises, in good order, condition and repair, casualties and ordinary wear and tear excepted. Lessee shall keep and
maintain the Demised Premises and all Improvements in a condition consistent with other similarly classed
operations. Lessee shall keep the Demised Premises in such condition as may be required by law and by the terms
of the insurance policies furnished pursuant to this Lease, whether or not such repair shall be interior or exterior, and
whether or not such repair shall be of a stractural nature. Upon reasonable notice to Lessee, Lessor may, at its
discretion and at its cost, conduct an annual inspection of the Demised Premises to determine Lessee's compliance
with this Article 6.
ARTICLE 7
COMPLIANCE WITH LAW
7.1 During the term of this Lease, Lessee shall comply with all local, state and federal laws applicable
to Lessee's use of the Demised Premises, including but not limited to the Americans with Disabilities Act.
7.2 Lessee shall not commit waste on the Demised Premises except as necessary for its business
purposes including the removal or construction of any buildings and Improvements on the Demised Premises, and
shall be liable for any damages to or destruction of any buildings or Improvements on the Demised Premises
resulting from waste and shall be required to repair or rebuild such buildings or Improvements. Lessee may remove
existing Improvements or construct new Improvements on the Demised Premises subject to all of the terms and
conditions of this Lease provided Lessee has received the prior approval of Lessor, which approval Lessor shall not
unreasonably withhold.
ARTICLE 8
ALTERATIONS
Lessee shall have the right, with Lessor's prior written consent which consent shall not be unreasonably
withheld for any such alteration, addition, or modification that exceeds *&at ex~°eed Fifty Thousand and 00/100
Dollars ($50,000.00) in cost, at Lessee's expense, from time to time during the term of this Lease to make any
alteration, addition or modification to the Demised Premises or the Improvements thereon.
ARTICLE 9
USE OF DEMISED PREMISES
Lessee shall operate the Improvements for the purposes outlined in the Development Agreement and shall
not knowingly use or allow the Demised Premises or any buildings or Improvements thereon or any appurtenances
thereto, to be used or occupied for any unlawful purpose or in violation of any certificate of occupancy. Lessee shall
not suffer any act to be done or any condition to exist within the Demised Premises or in any Improvement thereon,
or permit any article to be brought therein, which is dangerous, unless safeguarded as required by law, or which, in
law, constitute a nuisance, public or private, or which may make void or voidable any insurance in force with
respect thereto.
During the exclusivity period referred to in Section 4.2 of the Development Agreement, Lessee agrees that
at least seventy-five percent (75%), or not less than one hundred fifty (! 50) forty two (142) rooms, of the hotel shall
be reserved for group room reservations provided such group room reservations are made with the Developer at least
one (1) year in advance. In the event the Phase II Improvements are constructed, Lessee agrees that at least slkty-
five percent (65%), or not less than two hundred (200) rooms, of the hotel shall be reserved for group room
reservations provided such group room reservations are made with Lessee at least one (1) year in advance. For
purposes of this Agreement, a suite shall be deemed to be one (I) room. A~er the exclusivity pefiod referred to in
Section 4.2 of the Development Agreement, this paragraph shall only apply if Lessee, or an entity affiliated with
Lessee, is managing the conference and education center owned by Lessor in the ][ce Harbor District.
ARTICLE 10
INSURANCE
10.1 Lessee shall provide and maintain or cause to be maintained at all times during the process of
constructing Improvements (and, from time to time at the request of City, furnish City with proof of payment of
premiums on):
A. Builder's risk insurance, written on the Special Perils Form in an mount equal to one hundred
percent (100%) of the replacement value of Improvements as the same shall exist from time to time during
the conslraction process;
B. Commercial general liability insurance (including operations, contingent liability, operations of
subcontractors, completed operations and contractual liability insurance) together with an Owner's
Contractor's Policy with limits against bodily injury and pmpetty damage of not less than $2,000,000.00
for each occun'ence (to accomplish the above-required limits, an umbrella excess liability policy may be
used); and
C. Worker's compensation insurance, with statutory coverage.
10.2 Upon completion of construction of Improvements, Lessee shall maintain, or cause to be
maintained, at its cost and expense (and from time to time at the request of City shall furnish proof of the payment of
premiums on) insurance as follows:
A. Property insurance against loss and/or damage to Improvements under an insurance policy written
on the Special Perils Form in an amount not less than the full insurable replacement value of
Improvements, hut any such policy may have a deductible amount of not more than $50,000.00. No policy
of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage
required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior
consent thereto in writing by City. The term "replacement value" shall mean the actual replacement cost of
Improvements (excluding futmdation and excavation costs and costs of underground flues, pipes, drains
and other uninsurable items) and equipment, and shall be determined from time to time at the request of
City, but not mom frequently than once every three years, and paid for by Lessee.
B. Commercial general liability insurance, including personal injury liability for injuries to persons
and/or property, in the minimum amount for each occurrence and for each year of $2,000,000.00.
1053 All insurance required by this Article shall be taken out and maintained in responsible insurance
companies selected by Lessee which are authorized under the laws of the State of Iowa to assume the risks covered
thereby. Lessee shall deposit annually with City copies of policies evidencing all such insurance, or a certificate or
certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise
provided in this Section, each policy shall contain a provision that the insurer shall not cancel or modify it without
giving written notice to Lessee and City at least thirty (30) days before the cancellation or modification becomes
effective. Lessee shall furnish City evidence satisfactory to City that the policy has been renewed or replaced by
another policy conforming to the provisions of this Section, or that there is no necessity therefor under the terms
hereof. In lieu of separate policies, Lessee may maintain a single policy, or blanket or umbrella policies, or a
combination thereof, which provide the total coverage reqdimd herein, in which event Lessee shall deposit with City
a certificate or certificates of the respective insurers as to the amount of coverage in rome upon Improvements,
provided, however, the specific limit shall not be impaired.
10.4 Lessee agrees to notify City immediately in the case of damage exceeding $500,000.00 in amount
to, or destruction of, Improvements or any portion thereof resulting from fire or other casualty. Net proceeds of any
such insurance ("Net Proceeds"), shall be paid directly to Lessee, and Lessee shall forthwith repair, reconstruct and
restore the Improvements to substantially the same or an improved condition or value as they existed prior to the
event causing such damage and, to the extent necessary to accomplish such repair, reconsmaction and restoration,
Lessee shall apply the Net Proceeds of any insurance relating to such damage received by Developer to the payment
or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the
Property.
10.5 Lessee shall complete the repair, reconstruction and restoration of Improvements, whether or not
the Net Proceeds of insurance received by Lessee for such purposes are sufficient.
ARTICLE 11
LESSOR'S WARRANTIES AND REPRESENTATIONS
11.1 Lessor's Representation of Good Title. Lessor covenants and warrants that Lessor is lawfully
seized in possession of the Demised Premises, shall take all necessary steps to acquire fee simple title to the
Premises as required by law, and that it has full right and authority to enter into this Lease for the full term hereof,
and covenants and agrees that upon paying the rent provided for herein, and upon Lessee's performing the covenants
and agreements of this Lease required to be performed by said Lessee, that it wilt have, hold and enjoy quiet
possession of the Demised Premises. Lessor warrants to Lessee that the Demised Premises are properly zoned for
the conduct of the operation of Lessee's business.
ARTICLE 12
LESSEE'S WARRANTIES AND REPRESENTATION
12.1 Lessee Compliance With Law.
A. Lessee shall comply with all applicable local, state and federal laws, rules, regulations
and pennits with regard to the Demised Premises and its use, occupancy and control of the Demised Premises.
B. Without limiting the obligations of Lessor under Section 3.2, Lessee shall be responsible
for obtaining any and all applicable permits, licenses or authorizations as may be necessary for Lessee's use,
occupancy and control of the Demised Premises.
12.2 Environmental Matters.
A. Lessee covenants and agrees that Lessor shall have no responsibility for or liability arising from any release
ora Hazardous Substance wfuch ~s caused by ............................. , .... ~._.~
.......................r,~;~n D~;~ n- ........... a r*~r~*-~' ....... ....... '~ by Less:r) Lessee or its agents or invitees. No~i~st~d~g ~y o~er
provision of ~is Lease, Lessor agrees ~at Lessee shall not have ~y responsibiliw for ~y H~deus
,,,h{,k ............... ~,h ..... ~ ..... ~*~ ..... ....... ~.. Pre-Exist~g Condition (as defined below) nor shall Lessor seek ~demification
~om Lessee for ~y such ~e-Exist~g Condition. ~ere is a rebu~ble presmption ~at ~v H~dous Subst~ces
fo~d on ~e Demised Premises were not d~osited by Lessee ~d ~e a ~e-Exist~g Condition. A pre-exist~g
condition ("~e-Exist~g Condition") shall be defined ~ (i) ~y H~dous Subsmces fo~d on ~e Demised
~emises which were not deposited by Lessee or its agents or ~vitees on ~e Demised ~emises, (ii) ~y H~dous
Subs~ces on ~e Dmised ~emises prior to ~e ~ifial Tern of ~is Lease, ~d (iii) ~y H~dous Subsmces
which leach or mi~ate on to the Demised Premises from~y ~a~; ...... .... · ..... e~ ~v~-~'-~ er ~y re!ezse ~.~ _° Ha~dous
q,,ko* ........ h~h ; ....... ~ k~, I .......... h~ah ..... ~0~ +h~ a~*. ~ *h;o ~ .... adjo~g prope~ies, ~cluding
prope~ies o~ed by ~e Lessor.
Notwithstanding any other provision of this Lease, the Lessor, in its capacity as both owner of the Demised
Premises as landlord under this Lease, shall retain any legal responsibility or liability, subject to available defenses,
the Lessor may have under law for any Pre-Existing Condition. ltds retained responsibility and duty includes the
duty to assess, remove and remediate Pre-Existing Conditions on or affecting the Demised Premises as ordered by a
state or federal agency, subject to the availability of a comfort letter. This provision shah not inure to the benefit of
third parties and shall not be interpreted to enlarge any liabilities owed by the Lessor or to require the Lessor to
absorb any duties, responsibilities or liabilities that it does not already have for the Pre-Existing Conditions.
C__. Lessee a~rees to provide reasonable notice to the Lessor of any claims by adjoining or affected property
owners, third parties, or parties making claims through a citizen action or private right of action under applicable
law, environmental statutes or regulations which arise out of or are related to Pre-Existing Conditions on the
Demised Premises. Upon receipt of such notice, to the fullest extent allowed by law, the Lessor agrees to defend,
hold harmless and indenmif¥ Lessee for costs and expenses associated with responding to any cia&ms by adjoining
property owners, third parties, or parties making claims through a citizen action or private fight of action under
applicable environmental statutes or regulations which arise out of or are directly related to Pre-Existing Conditions
on the Demised Premises.
D. To the fullest extent allowed by law, the Lessor agrees to indemnify Lessee for reasonable costs and
expenses associated with responding to any legally enforceable order regarding Pre-Existing Conditions from any
governmental agency or court with proper iurisdiction to the extent that the Lessor, after Lessee has given
reasonable notice of the governmental order to the City, does not timely end reasonably respond to said inquiry or
order end if the Lessee allows full access to the Premises as necessary, as provided herein. The Lessor's right of
appeal and negotiation are not waived by the foregoing end the filing of an appeal or negotiation with the
governmental agency are considered timely end reasonable mspunse. However, the Lessor agrees to indemnify
Lessee for eny penalties end times Lessee incurs as a result of eny such appeal or negotiation.
E~. Lessor shall provide reasonable notice to Lessee prior to requesting access for the purposes set forth above.
Lessee agrees to allow the Lessor to have access to and use of the Demised Premises to times and locations which
will minimize any disruption end which will not materially or unreasonably interfere with the operation or
possession of the Demised Premises as required to respond to any governmental inquiry or order as described above.
Except as set out below, the terms of this provision shall not be construed to require that the Lessee is under any
obligation to Lessor to move, damage, or modify personal property, fixtures, or buildings on the Demised Premises
or to allow Lessor to affect or modify this Lease, whether by lien, easement, or governmental order, except to the
extent that use limitations end environmental protection easements may be placed on the Demised Premises which
do not chenge or interfere with the actual or proposed use of the Demised Premises by Lessee. Ilte Lessee agrees
that it will not install drinking water wells or otherwise obtain potable water for the purpose of consumption or
bodily contact fi.om the groundwater endemeath the Demised Promises end agrees to execute eny necessary waivers
or easements to that effect. If the Lessor is required by a state or federal agency to take such action which materially
or unreasonably interferes with the operation or possession of the Demised Premises, or otherwise damages the
property of Lessee, then the Lessor shall be required to pay the reasonable costs associated with such activity,
including, without limitation, loss of income, economic damages, property damage, end other costs end expenses,
whether temporary or permenent in nature, incurred by Lessee by reason of the interference.
B. Lessee covenents and agrees to promptly notify Lessor of any release of Hazardous
Substance in, on or about the Demised Premises of which Lessee has actual knowledge.
C. Lessee covenents end agrees to promptly take eny and all necessary end appropriate
response to address any release of Hazardous Substance for which Lessee is responsible under Section 12.2A. Such
response shall include, without limitation, notification to appropriate governmental authorities, as may be required
by law.
D. Lessee coveenents end agrees to not menufacture, treat or dispose of Hazardous
Substances at the Demised Premises or knowingly allow the menufacture, trealment, or disposal of Hazardous
Substances same on the Demised Premises.
For the purposes of this Lease, "Hazardous Substance" or "Hazardous Substances" means eny
hazardous or toxic substance, material or waste which is or becomes regulated by any local government, the State of
Iowa or the United States Government. It includes, without limitation, any material or substence that is (i) def'med
as a "hazardous substance" or "hazardous waste" under Chapter 455B, Iowa Code, (ii) petroleum end petroleum
products, (iii) asbestos containing materials in any form or condition, (iv) designated as a "hazardous substance"
pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1321), (v) defined as a "hazardous
waste pursuant to § 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., (vi)
defmed as a "hazardous substance" pursuant to § 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, U.S.C § 9601 et seq., or (vii) defined as a "regulated substance" pursuent to
Subchapter IX, Solid Waste Disposal Act (Regulation of Underground Storage Tanks), 42 U.S.C. § 6991 et seq.]
The term "Hazardous Substance" shall not include any air emissions discharged into the atmosphere as allowed by a
duly issued permit fi.om the applicable governmental agency.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification of Lessee.
A. To the extent allowed by law, Lessor will indemnify and save harmless Lessee fi.om and
against all liabilities, obligations, claims, damages, penalties, causes of action, costs end expenses (including,
without limitation, reasonable attorneys' fees end expenses) imposed upon or incurred by or asserted against Lessee
by reason of(a) eny accident, injury to or death of persuns or loss of or damage to propeity occurring on or about
the Demised Premises and resulting fi.om any act or omission of Lessor, (b) eny failure on the part of Lessor to
perform or comply with any of the terms of this Lease and (c) any breach on the part of Lessor of any warranty or
representation contained in Article 11. In case any action, suit or proceeding is brought against Lessee by reason of
such occurrence, Lessor will, at Lessor expense and discretion, either defend such action, suit or proceeding, or
cause the same to be defended by counsel approved by Lessee, which approval will not be unreasonably withheld.
B. Lessee shall have the fight to perform environmental site assessments of the Demised
Premises to assess the environmental condition of the Demised Premises for the purpose of consmtcting a hotel.
Any results or reports created by such site assessment shall be the property of Lessee and may be used by Lessee
and Lessor for any purpose provided that Lessor shall not disclose any such report or the information contained
therein to any third party unless required to do so by law or legal process.
13.2 Indenmification of Lessor. Lessee will indemnify and save harmless Lessor from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted against Lessor by
reason of (a) any accident, injury to or death of persons or loss of or damage to property occurring on or about the
Demised Premises during the term of this Lease and resulting from any negligence of Lessee or anyone claiming by,
through or under Lessee during the term of the Lease and (b) any failure on the part of Lessee to perform or comply
in any material respect with any of the material terms of this Lease, and (c) any material breach on the part of
Lessee of any warranty or representation contained in Article 12. In case any action, suit or proceeding is brought
against Lessor by reason of such occurrence, Lessee will, at Lessee's expense and discretion, either defend such
action, suit or proceeding, or cause the same to be defended by counsel approved by Lessor, which approval will not
be unreasonably withheld.
13.3 Survival. The obligations and liabilities under this Article shall survive and continue in full force
and effect and shall not be terminated, discharged or released, in whole or in part, irrespective of the termination or
expiration of the term of this Lease.
ARTICLE 14
CONDEMNATION
14.1 Entire Condemnation. If at any time during the term of this Lease all or substantially all of the
Demised Premises or the Improvements thereon shall be taken in the exercise of the power of eminent domain by
any sovereign, municipality or other public or private authority, then this Lease shall terminate on the date of vesting
of title in such taking and any prepaid rent shall be apportioned as of said date. Substantially all of the Demised
Premises and the Improvements thereon shall be deemed to have been taken if the remaining portion of the Demised
Premises shall not be of sufficient size to permit Lessee, in Lessee's sole discretion, to operate its business thereon
in a manner similar to that prior to such taking.
14.2 Allocation of Award. Any award for such taking of all or substantially all of the Demised
Premises shall be paid to the parties hereto in accordance with the following:
A. To Lessor, the amount of the award attributable to the Demised Premises, determined as
if this Lease was not in effect at the time of such award, excluding therefrom the amount of the award
attributable to the Improvements, and alt other sums not directly attxibutable to the value of the Land
constituting the Demised Premises;
B. To Lessee, the entire award except that portion allocated to Lessor above.
14.3 Partial Condemnation. If less than all or substantially all of the Demised Premises or the
Improvements thereon shall be taken in the exercise of the power of eminent domain by any sovereign, municipality
or other public or private authority, then Lessee, at its option, may elect to continue this Lease in full force and
effect or terminate this Lease. ffLessee shall elect to maintain this Lease in full force and effect, the award for such
partial condemnation shall be allocated as provided in Section 14.2, and Lessee shall proceed with reasonable
diligence to carry out any necessary repair and restoration so that the remaining Improvements and appurtenances
shall constitute a complete sl~mctoral unit or units which can be operated on an economically feasible basis under the
provisions of this Lease. In the event Lessee elects to continue this Lease in full force and effect after a partial
condenmatinn, the Base Rent shall be reduced in proportion to the area of the Demised Premises taken.
Should Lessee elect to terminate this Lease upon a partial condemnation, Lessee shall provide Lessor with
written notice of such election within thirty (30) days a~er the date of vesting of title for such taking. Lessee shall
specify in such written notice the date on which this Lease shall terminate, which date shall be not less than 60 days
nor more than 360 days after delivery of such notice to Lessor (the "Termination Date"). In the event Lessee
terminates this Lease, as provided for in this Section 13.3, Lessee shall be entitled to the entire award for such partial
taking.
14.4 Temporary Taking. If the temporary use of the whole or any part of the Demised Premises or the
Improvements thereon or the appurtenances thereto shall be taken at any time during the term of this Lease in the
exercise of the power of eminent domain by any sovereign, municipality, or other authority, the term of this Lease
shall not be reduced or affected in any way, and Lessee shall continue to pay in full the rent, additional rent and
other sum or sums of money and charges herein reserved and provided to be paid by Lessee, and the entire award for
such temporary taking shall be paid to Lessee. Lessee shall repair and restore any and all damage to the Demised
Premises and the Improvements as soon as reasonably practicable after such temporary taking.
14.5 Effect of Taking. If any taking renders the construction of the hotel and ente~.~;~ment zenter
and/or water park impossible, any financial penalties set forth in Section 1.3 due after such taking shall not be
applicable.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
D~Lng the Deve!epment Peried Prior to the issuance of the Certificate of Completion (as defined in
Section 3.4 of the Development Agreement) for the Minimum Improvements, this Lease may not be assigned by
DeYe!~per Lessee without the prior written consent of the r,~,, ^ ~ ,h~ ~w;~o,;~ ~,~ r,~,~ ..... * ~,,~a *h~
...... ~,. Lessor. After the issuance of the Certificate of Completion, the Lessee shall have the right to transfer and
~ ....,-~ Lessor which consent shall not be
assign this Lease to a third patty, subject to the consent of ......... t,~,,
unreasonably withheld, provided said third party agrees to comply with the terms and conditions of this Lease.
ARTICLE 16
DEFAULT
16.1 Lessor's Rights in the Event of Lessee's Default. If Lessee shall fail or neglect to observe, keep or
perform any of the covenants, terms or conditions contained in this Lease on its part to be observed3 kept or
performed, and the default shall continue for a period of thirty (30) days after written notice from Lessor setting
forth the nature of Lessee's default (it being intended that in connection with a default not susceptible of being cured
with diligence within thirty (30) days, the time within which Lessee has to cure the same shall be extended for such
period as may be necessary to complete the same with all due diligence, but in no event longer than ninety (90)
days), then and in any such event, Lessor shall have the right at its option, on written notice to Lessee, to terminate
this LeaseLess~r Lease. Lessor shall thereafter have the right to enter and take possession of the Demised Premises
with process of law and to remove all personal property from the Demised Premises and all persons occupying the
Demised Premises and to use all necessary force therefor and in all respects to take the actual, full and exclusive
possession of the Demised Premises and every part of the Demised Premises as of Lessor's original estate, without
incurring any liability to Lessee or to any persons occupying or using the Demised Premises for any damage caused
or sustained by reason of such entry on the Demised Premises or the removal of persons or property fi.om the
Demised Premises.
16.2 Rights of Holder of Encumbrance in Event Lessee Defaults. If Lessee fails or neglects to observe,
keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or
performed, the Holder of any indebtedness secured by an encumbrance on the leasehold estate under this Lease shall
have thirty (30) days after receipt of written notice from Lessor setting forth the nature of Lessee's default and a
reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature
thereof within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than
ninety (90) days, within which to endeavor to make good or remove the default or cause for termination of the
Lease. All right of Lessur to terminate this Lease on the failure or neglect of Lessee to observe, keep and perform
the covenants, terms and conditions of this Lease is, and shall continue to be, at all times prior to payment in full of
the indebtedness to the Holder of Lessee, subject to and conditioned on Lessor's having first given the Holder
written notice thereof and the Holder having failed to cause the default or cause for termination to be made good or
removed within thirty (30) days after receiving written notice of default or cause for termination or within a
reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature of
foreclosure within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than
ninety (90) days. In the event that the Lease is terminated due to the Lessee's bankruptcy, insolvency or other
proceedings, and in the event the Holder has complied with the terms of this Section 16.2, then Lessor at Holder's
option, shall enter into a new lease with Holder or the successful bidder at foreclosure on the same terms as this
Lease, for the term then remaining, and specifically preserving all unexercised options.
16.3 Lessee's Rights in the Event of Lessee's Default. If Lessor shall fail or neglect to observe, keep or
perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or
performed, and the default shall continue for a period of thirty (30) days after written notice from Lessee setting
forth the nature of Lessor's default (it being intended that in connection with a defank not susceptible of being cured
with diligence within thirty (30) days, the time within which Lessor has to cure the same shall be extended for such
period as may be necessary to complete the same with all due diligence, but in no event longer than ninety (90)
days), then and in any such event, Lessee shall have all rights available to it provided by law or equity.
ARTICLE 17
RIGHT TO CURE OTHER'S DEFAULTS
Whenever and as often as a party shall fall or neglect to comply with and perform any term, covenant,
condition or agreement to be complied with or performed by such party hereunder, then, following thirty (30) days'
prior wri~en notice to such defaulting party (or such additional time to cure as may be accorded Lessee pursuant to
Section 16.1 above, but in no event longer than ninety (90) days), the other party, at such other party's option, in
addition to all other remedies available to such other party, may perform or cause to be performed such work, labor,
services, acts or things, and take such other steps, including entry onto the Demised Premises and the Improvements
thereon, as such other party may deem advisable, to comply with and perform any such term, covenant, condition or
agreement which is in default, in which event such defaulting party shall reimburse such other party upon demand,
and from time to time, for all costs and expenses suffered or incurred by such other party in so complying with or
performing such term, covenant, condition or agreement, fft~e commencement of any work or the taking of any
other steps or performance of any other act by such other party pursuant to the immediately preceding sentence shall
not be deemed to obligate such other party to complete the curing of any term, covenant, condition or agreement
which is in default.
ARTICLE 18
QUIET ENJOYMENT
Lessor covenants that at all times during the term of this Lease, so long as Lessee is not in default
hereunder, Lessee's quiet enjoyment of the Demised Premises or any part thereof shall not be disturbed by any act
of Lessor, or of anyone acting by, through or under Lessor.
ARTICLE 19
ESTOPPEL CERTIFICATES
Each party hereto agrees that at any time and from time to time during the term of this Lease, within ten
(10) days after request by the other party hereto or by any lender having an interest in Lessee's leasehold estate, it
will execute, acknowledge and deliver to the other party or to such lender or any prospective purchaser, assignee or
any mortgagee designated by such other party, a certificate stating (a) that this Lease is unmodified and in force and
effect (or if them have been modifications, that this Lease is in force and effect as modified, and identifying the
modification agreements), (b) the date to which rent has bean paid, (c) whether or not there is any existing default by
Lessee in the payment of any rent or other sum of money hereunder, and whether or not there is any other existing
default by either party hereto with respect to which a notice of default has been served, and, if there is any such
default, specifying the nature and extent thereof; and (d) whether or not there are any setoffs, defenses or
counterclaims against enforcement of the obligations to be performed hereunder existing in favor of the party
executing such certificate.
ARTICLE 20
WAIVER
No waiver by either party hereto of any breach by the other of any term, covenant, condition or agreement
herein and no failure by any party to exercise any right or remedy in respect of any breach hereunder, shall
constitute a waiver or relinquishment for the future of any such term, covenant, condition or agreement or of any
subsequent breach of any such term, covenant, condition or agreement, nor bar any fight or remedy of the other
party in respect of any such subsequent breach, nor shall the receipt of any rent, or any portion thereof, by Lessor,
operate as a waiver of the fights of Lessor to enforce the payment of any other rent then or thereaf[er in default, or to
terminate this Lease, or to recover the Demised Premises, or to invoke any other appropriate remedy which Lessor
may select as herein or by law provided.
ARTICLE 21
SURRENDER
Lessee shall, on the last day of the term of this Lease or upon any termination of this Lease, surrender and
deliver up the Demised Premises, with the Improvements then located thereon into the possession and use of Lessor,
without fraud or delay and in good order, condition and repair, reasonable wear and tear excepted, f~ee and clear of
all lettings and occupancies, free and clear of all liens and encumbrances other than those existing on the date of this
Lease and those, if any, created by Lessor, without (except as otherwise provided herein) any payment or allowance
whatever by Lessor on account of or for any buildings and Improvements erected or maintained on the Demised
Premises at the time of the surrender, or for the contents thereof or appurtenances thereto. Lessee's Trade FLxtures,
personal property and other belongings of Lessee or of any sublessee or other occupant of space in the Demised
Premises shall be and remain the property of Lessee, and Lessee shall have a reasonable time after the expiration of
the term of this Lease (not to exceed thirty (30) days) to remove the same.
ARTICLE 22
MEMORANDUM OF LEASE
Each of the parties hereto will, promptly upon request of the other, execute a memorandum of this Lease in
a form suitable for recording setting forth the nmues of the parties hereto and the term of this Lease, identifying the
Demised Premises, and also including such other clauses therein as either party may desire, except the amounts of
Basic Rent payable hereunder.
ARTICLE 23
NOTICES
23.1 All notices, demands or other writings in this Lease provided to be given or made or sent, or
which may be given or made or sent, by either party to the other, shall be deemed to have been fully given or made
or sent when made in writing and deposited in the United States mall, registered and postage prepaid, and by
facsimile addressed as follows:
TO LESSOR:
City of Dubuque, Iowa
City Manager
City Hall
t3th and Central Avenue
Dubuque IA 42001
Fax 319 589-4149
TO LESSEE:
Platinum Holdings, LLC
801 Jackson St.
Dubuque, IA 52001
23.2 ~Ihe address and/or fax number to which any notice, demand or other writing may be given or
made or sent to any party as above provided may be changed by writXen notice given by the party as above provided.
ARTICLE 24
MISCELLANEOUS
24.1 Time oftbe Essence. Time is of the essence of this Lease and all of its provisions.
24.2 Governing Law. It is agreed that this Lease shall be governed by, construed and enforced in
accordance with the laws of the State of Iowa.
24.3 Paragraph Headings. The titles to the paragraphs of this Lease are solely for the convenience of
the parties and shall not be used to explain, modify, simplify or aid in the interpretation of the provisions of this
Lease.
24.4 Modification of Agreement. Any modification of this Lease or additional obligation assumed by
either party in connection with this Lease shall be binding only if evidenced in a ~witing signed by each party or an
authorized representative of each party.
24.5 Parties Bonnd. This Lease shall be binding on and shall inure to the benefit of and shall apply to
the respective successors and assigns of Lessor and Lessee. All references in this Lease to "Lessor" or "Lessee"
shall be deemed to refer to and include successors and assigns of Lessor or Lessee without specific mention of such
successors or assigns.
24.6 Force Maieure. In the event that either pa~ty hereto shall be delayed or hindered in or prevented
from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, unavailability of
construction materials, unavailability or excessive price of fuel, power failure, riots, insurrection, war, terrorist
activities, explosions, hazardous conditions, fire, flood, weather or acts of God, or by reason of any other cause
beyond the exclusive and reasonable control of the party delayed in performing work or doing acts required under
the terms of this Lease (collectively "Force Majeure"), then performance of such act shall be excused for the period
of the delay and the period for the performance of any such act shall be extended for a period equivalent to the
period of such delay.
24.7 Conflict. To the extent there is a conflict of terms between the Development Agreement and this
Lease, the terms of the Development Agreement shall control.
24.8 Entire Agreement. This Agreement, along with the Development Agreement and Minimum
Assessment Agreement, constitutes the entire agreement between the Lessor and the Lessee regarding the lease of
the Demised Premises and supercedes all previous oral or written agreements between the parties regarding the
subiect matter of this Lease.
LESSOR:
CITY OF DUBUQUE, IOWA
Attest: By:
Jeanne F. Schneider, City Clerk
Terrance M. Duggan, Mayor
LESSEE:
PLATINUM HOLDINGS, LLC
Attest: By:
EXHIBIT "A"
LEGAL DESCRIPTION OF DEMISED PREMISES
Preparer
Information
Thomas D. Johnson 666 Grand Ave.. Ste. 2000 Des Moines
Individual's Name Stxeet Address City
(515) 242-2414
Phone
P~G USE AGREEMENT
SPACE ABOVE TI-PIg LINE
FOR RECORDER
THIS PARKhNG USE AGREEMENT (the "Agreement") is made and entered into effective the
__ day of March, 2001, by and between the City of Dubuque, Iowa, a municipal corporation (the
"City"), acting pursuant to Chapter 403 of the Code of Iowa, and Platinum Holdings, LLC, an Iowa
limited liability company ("Platinum") and its successors and assigns.
WHEREAS, the City and Platinum are parties to an Amended Development Agreement dated
January , 2001 (the "Development Agreement"), whereby the City acquired and leased to Platinum
approximately 3.5 acres located in the Ice Harbor Urban Renewal District so that Platinum may develop
and construct a hotel and water park project (the ?roject"); and
WHEREAS, the City has agreed to provide parking for the Project.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
herein, each of them does hereby covenant and agree x~Sth the others as follows:
1. Term of Am:cement. The term of this Agreement (the "Term") shall commence on the
date thirty (30) days immediately prior to the anticipated date of the issuance of the Certificate of
Completion (as defined in Section 3.4 of the Development Agreement), and shall terminate upon the
expiration or termination of that certain Lease Agreement dated March , 2001, by and between the
City and Platinum related to the lease of the Project area (the "Lease"), or if the Lease is amended,
extended or renewed, the term of this Agreement shall terminate on the expiration or termination of such
amended, extended or renewed term of the Lease. This A~reement shall be transferable '~Sth the Lease.
2. Parkin~ and Legal Description. During the Term of this Agreement, the City shall
provide a surface lot for vehicular parking in the areas designated Phase I par'king and legally described
on Exhibit A attached hereto (the "Phase I Parking Area") for the exclusive use by Platinum, and its
guests, vendors, suppliers and employees. The Phase I Par'king Area shall include pedestrian access and
vehicular access to the Phase I Parking Area. The City and Platinum agree that the Phase I Parking Area
shall include a minimum of 290 parking spaces to the ~vest of the M/nimum Improvements (as defined in
the Development Agreement). In the event that the Developer consm~cts the Phase II Improvements (as
defined in the Development Agreement), the City shall provide a surface lot for vehicular par-king in the
areas designated Phase II parking as described on E.xh/bit A (the "Phase II Parking Area") for the
exclusive use by Platinum and its guests, vendors, suppliers and employees. The Phase II Parking Area
shall include pedestrian access and vehicular access to the Phase II Parking Area. The City and Platinum
agree that the Phase II Parking Area shall include a minimum of an additional 110 parking spaces for the
Phase II Improvements (a minimum 0£400 parking spaces for both Phase I and Phase II projects). For
purposes of this Agreement, Phase [ Parking Area and Phase II Parking Area shall collectively be referred
to as the "Parking Area".
I
The City shall not charge any fee to Platinum or its guests, vendors, suppliers and employees for use of
the Parking Area. Platinum .m.~..~ r~:.~._... ~-~--,~n ~. .......... ..v ~u~..~ P!atim:m,shall be responsible for alt routine day
to day custodial maintenance~-'~ .~v-.-;- of the Parking Area during the Term of this Agreement,
including, without lim/tafion, sweeping, trash collection, landscape trimming, snow removal and clearing
of ice from the Parking Area. The City shall be responsible, at no cost to Platinum. for the replacement.
repair and other maintenance associated with the Par 'kin~ Area. including, without limitation, the repair.
replacement and maintenance of surface potholes, surface reconstruction and restoration, landscape
replacements, parkin~ space strip[n_* and re-caulking of the parkin_* area. Platinum, and its guests,
vendors, suppliers and employees, shall at all times have reasonable access to the Park/ng Area and the
City shall keep the Parking Area reasonably clear at all times in order that Platinum, and its guests,
vendors, suppliers and employees, may use the Parking Area. The City shall be responsible for obtaining
and maintaining all necessary permits for the construction and operation of the Parking Area, including all
necessary permits to allow the collection, retention and discharge of stormwater. Prior to construction of
the Parking Area, the City and Platinum shall meet to discuss and agree on the layout of the Parking Area.
The Parking Area and all streets leading to the Parking Area shall be constructed in a manner to allow
heavy truck access.
3. Pedestrian Into'ess/Em'ess. The City shall provide a reasonably direct and converfient
means ofpublic pedeslxian ingress and egress to the Parking Area. Such pedestrian access shall include a
connection to the public sidewalk fronting and connecting the Project. Such pedestrian access shall
comply with the handicap accessibility standards alrplicable at the time the Parking Area is conslructed.
The City shall be responsible, at no cost to Platinum, for the construction of any and all sidewalks,
landscaping and lighting for the Parking Area, such sidewalks, landscaping and lighting shall be
consistent with the character and requ~remants of the surrounding area.
4. Vehicular Into'ess/Em'ess. The City shall provide a reasonably direct and convenient
means of public vehicular ingress and egress between the public streets adjoining the Parking Area and
the Parking Area. The vehicular access shall be sufficient to permit automobiles, sports utility vekicles,
vans and buses to be driven from the street to the Parking Area and back to the street without being
blocked by parked vehicles or other obstructions. The City shall be responsible, at no cost to Platinum,
for ail streets, landscaping and lighting for the Parking Area, such streets, landscaping and lighting shall
be consistent ~vith the character of the surrounding area.
5. Traffic Sim~als. The City shall install such traffic signalization related to the increased
traffic on the public streets adjoining the Parking Area caused by the Minirmun Improvements (as deemed
in the Development Agreement) as the City shall determine to be necessary and appropriate.
6. Hold Over Vehicles. Any unauthorized vehicles using the Parking Area may be removed
by Platinum at any time by any lawful means.
7. Rental. No additional consideration shall be due the City from Platinum for the use of
the Parking Area pursuant to this Agreement. The parties agree that full and adequate consideration for
the obligations undertaken by the City pursuant to this Agreement has been provided by the obligations
undertaken by Platinum pursuant to the Development Agreement.
8. Relationship Between Parties. It is mutually understood and agreed that nofidng in fids
Agreement shall be construed as establishing a relationship of lessor/lessee, principal/agent or co-parmers
bet~veen the City and Platinum.
9. Reciprocal Covenants. Platinum covenants and agrees that the City shall have no
responsibility for or liability arising from any release of a Hazardous Substance (as defined in the
Development Agreement) on or under the Par'king Area, which is caused by Platinum, or its guests,
vendors, suppliers, or employees. The City agrees that Platinum shall not have any responsibility for any
Hazardous Substances existing or found on or under the Parking area (except for Hazardous Substances
deposited by Platinum or its agents or assimas). There shall be a rebuttable presumption that any
Hazardous Substances found on or under the Parking area were not deposited by Platinum. Except for
Hazardous Substances released or deposited by Platinum or its a~ents or assians on the Parking Area, the
City shah retain any cm'rant!y :xizting legal responsibility or liability, subiect to available defenses, the
Citv may have under law ~at c:dsts for any Hazardous Substances existing, located or found on or under
the Parking Area. This retained responsibility and duty includes the duty to assess, remove and remediate
any Ha?ardons Substances on or affecting the Parking Area as ordered by a state or federal agency,
subiect to the availability ora comfort letter. This provision shall not inure to the benefit of third parties
and shall not be interpreted to enlarge any liabilities owed by the City or to require the City to absorb any
duties, responsibilities or liabilities that it does not already have for any Hazardous Substances existing,
located or found on or under the Parking Area. To the tidiest extent allowed by law, the City agrees to
indemnify Platinum for reasonable costs and expenses associated with responding to any legally
enforceable order regarding Ha:mrdous Substances fi:om any governmental agency or court with proper
jurisdiction to the extent that the City, after Platinum has ha;~g bccn given reasonable notice of the
governmental order to the Cit% does nbt timely and reasonably respond to said inquiry or order and if
Platinum allo~vs full access to the Parking Area as necessary, as provided herein. The City's right of
appeal and negotiation are not ~valved by the foregoing and the filing of an appeal or negotiation ~vith the
governmental agency are considered timely and reasonable response. However, the City agrees to
indemnify Platinum for any penalties and fines Platinum incurs as a result of any such appeal or
negotiation. The City shall minimize any disruption and wilt not materially or unreasonably restrict or
interfere with the use of the Parking Area by Platinum or its guests, vendors, suppliers or employees. In
the event the City restricts or interferes with the use of any part of the Parking Area, the City shall provide
Platinum, and its guests, vendors, suppliers and employees, with access to reasonably comparable parking
within a close proximity of the Project for the period of time that the portion of the Parking Area is not
available.
10. Ri~_ht of First Refusal.
(a) If the City desires to sell, lease, condemn, develop, assign or other~vise transfer
(collectively referred to herein as a "Transfer") all or any part of the Phase II Parking Area and/or any
propert-,, to be used for Phase II Improvements (as defined in the Development A~eement) as desi~nated
and described as Phase II Improvements on Exhibit A attached hereto (the "Phase II Improvement
....... ~ ......... ~ .......... ~ during the Term of this Agreement, Platinum shall have an option and
right of first refusal to purchase or lease. ~ ~ ~ ....' a ~... m~:
.......... ~ne~ w ............the Phase II Parking Area and/or
Phase II Improvement Property, as the case may be ............... v ............. ~
any part thereof to be transferred, as provided in this Section 10. If the City has received a bona fide offer
to purchase or lease the Phase II Parking Area and/or the Phase I[ Improvement Property
Development .~ca fi:om a third party ~vhich the City desires to accept, the City shall deliver to Platinum a
copy of such offer specifying the name and address of the perspective transferee, the portion of the Phase
ti Parking Area and]or Phase II Improvement PropertY, as the case may be ....... r ~: .... pmcn .... ,x,, as
tke :az: may ha, to be transferred, the proposed purchase price or lease payment and ali other important
terms of the proposed Transfer, and the City shall offer to sell, transfer or lease the Phase II Parking Area
and]or Phase II Improvement Propertv, as the case may be, ..a~. n~,.~ ...... ^ .......
bo, to Platinum on the terms contained in such bona fide offer. Platinum shall, within sixty (60) days
after receipt ora copy of the bona fide offer, by ,a~tten notice to the City, elect either to: (a) exercise its
rights of first refusal to purchase or lease the Phase II Parking Area and/or Phase II Improvement I
Propert'< as the case ma', be, ............. v ........ '.rea, az ~:e ea:e ma.v be, proposed to be transferred on
3
the terms recited in the bona fide offer; or (b) waive its right of first refusal to purchase or lease the
Par'king Area and/or Phase II Improvement ProperW .... r ~; c.a~mcn~, ~rea proposed to be transferred.
If Platinum exercises its right of first refusal, the City shall transfer or lease, as the case ma,/ be,
~.~ ........ ~. ..... ,,urn, the Phase II Parking Area and/or Phase II Improvement Propertv ~ .... r .~c
...... v ......................... ., bu, to Platinum within ninety s~x~%' (9060) days of the exercise by
Platinum of its right of first refusah If Platinum waives its right of first refusal in the manner set forth
above, the City shall have the right for a neriod of one v ~-..--~-~ ....... r~'~n~ ~ ....
.... , ~ . ~-, ~ (I) . ear ............... ., ~.~~, ~.2o after the date
or matmum s ~va~ver, to consummate the Transfer upon terms and conditions substantially the same as
and no less favorable to the City then those contained in the bona fide offer. Provided, notwithstanding
any waiver by Platinum of its fight of first refusal, the Transfer of the Phase I1 Parking Area and/or Phase
II Improvement Property ........... v ............. cazc ma;,' be, to any third party shall be subject
to the terms of this Agreement. If a proposed Transfer is not consummated ~vithin the aforementioned
one (1) -fear ........ ~-~ ~x;,' period follo~ving waiver by Platinum, the Phase II Parking Area and/or
Phase II Improvement Property, as the case may be ........... v .................. may ~e, shall
not thereafter be released from the effect of this Section I0.
(b) If the City desires to Transfer all or any part of the development propertw- desimaated and
described as development property on Exhibit A attached hereto (the "Development Propertx,") durine the
fifteen (15) year period coum~encin_o the commencement date of the Term of this Azreement. Ptatlmml
shall have an option and rieht of first refusal to purchase or lease the Development Property. or any part
thereof to be transferred, as provided in this Settlor/10. If the City has received, durin_* the fifteen veer
period described in the precedinc~ sentence, a bona fide offer to purchase or lease the Development
Property from a third party' which the Citv desires to accept, the City shall deliver to Platinum a notice
and offer as specified in Section 10(a) above and Platinum shall have a right of first refusal to purchase or
lease, as the case may be. the Development Property pursuant to the terms and procedures set forth in
Section 10(a) above. On completion of the Phase II Improvements, the fifteen (15) year rieht of first
refusal period with respect to the Development Property shall be extended for the appropriate period of
time in order that the rieht of first refusal period shall be for a period of fifteen (15) years commencine
the date Platinum receives the certificate of completion from the City related to the completion of the
Phase H Improvements. Durine the fifteen (15) year period described above and any extension of such
period, the Development Property shall be subiect to the terms of the rizht of first refusal as set forth in
Section 10(a) above. Provided. notx~4thstandin~ any waiver by Platinum of its right of first refusal, the
Transfer of the Development Proper~, to any third party shall be subiect to the terms of this Azreement
11. Remedies. Except as other~vise provided in this Agreement, in the event of any default in
or breach of this Agreement, or any of its terms or conditions, by any party, or any successors, such party
(or successors) shall, upon written notice from the other party, proceed promptly, and, in any event,
within thirty (30) days after receipt of such notice, to cure or remedy such default or breach. In case such
action is not taken or not diligently pursued, or default or breach shall not be cured or remedied with/n a
reasonable time, the aggrieved party may institute such proceedings as may be necessary or desirable in
its opinion to cure and remedy such default or breach, including, but not limited to, proceedings to compel
specific performance by the party in default or breach of its obligations.
12. Notice~. A notice, demand or other communication under this Agreement by any party
by the other party shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally,
(a) In the case of the City, is addressed to the City Manager, City Hall, 50 W. 13th
Street, Dubuque, Iowa 5200 I.
(b) In the case of Platinum, ts addressed to James P. Rix, c/o Platinum Holdings,
LLC, 801 Jackson Street, Dubuque, Iowa 52001.
Or to such other person or address with respect to any party as that party may from time-to-time designate
by notice to the other party as provided in this Section. Any notice delivered hereunder shall be deemed
delivered upon the earlier of the actual receipt or two (2) business days after posting.
13. Govemin~ Law. It is agreed that this Agreement shall be governed by, construed and
enforced in accordance ~vith the laws of the State of Iowa.
14. Amendments. Any amendment or modification of this Agreement shall be binding only
if evidenced in a writing signed by an authorized representative of each party.
15. Parties Bound. This Agreement (i) shall follow and nm with the Lease between the City
and Platinum, (ii) shall be transferable with the Lease, and (iii) shall remain in effect for the length of the
Lease and any extension or renewal of the Lease. This Agreement shall be binding on and shall inure to
the benefit of the City and Platinum and their respective successors and assigns.
16. Entire Am:cement. This Agreement, along with the Development Agreement and Lease,
constitutes the entire agreement between the City and Platinum regarding the provision and use of the
Parking Area and supercedes all previous oral or written agreements between the parties regarding the
subject matter of this Agreement.
IN WTNESS WHEREOF, the parties have caused this Agreement to be duly executed effective
the day fzrst above written.
CITY OF DUBUQUE, IOWA
PLATI2qUM HOLDhNGS, LLC
By: By:
Terrance M. Duggan, Mayor
James P. Rix, Chief Executive Office
By:.
Jearme F. Schneider, City Clerk
[NOTARY BLOCKS TO BE ADDED]
5
EXHIBIT A
Par'king Area
FACILITY MANAGEMEI'~ AGREEMENT
THIS FACILITY MANAGEMENT AGREEMENT (the ~Agreemeat") is made end entered into as of this
__ day of Juls~M~ll~ 200~ by and between The City of Dubuque, Iowa (hereinatter referred to as "City") end
Platinum Hospitality Group, LLC, c,r,. ....... .,.~L~,~-' ,~,,~,.~,.-~': .................... ~,,,~,,~,,~ o~ J,~ P. ..~:-- (hereinafter referred to as
"Manager").
WITNESSETH:
WHEREAS; the Cttyplens to construct a ........... ~ ~ ~6~,eeute~,fa¢~__ _ . located m
the lee Harbor Urben Renewal District located in Dubuque, Iowa (the "Facility"); end
WHEREAS, the financial end operational success of the Facility is of the highest importance to the City;
end
WHEREAS, the Manager desires the exclusive right end privilege of menaging the Facility; end
WHEREAS, The City is unable to provide these services to its attendees end patrons through its own
personnel end facilities end the Manager is experienced end skilled at providing these services;
NOW THEREFORE, in consideration of the premises end of the terms, covenents end conditions
hereinafter contained, it is agreed as follows:
1. Retention of Manager. The City hereby retains the Menager as an independent contractor for the purpose
of performing the menagement services for the Facility described in this Agreemem. ~
Subject to the terms end conditions set forth herein, the Menager agrees to provide the management
services for the Facility in accordance with this Agreement end consistent with reasonable policies approved by the
City. The Menager shall use its best efforts to maximize revenues in the marketing, operating end menagemeut of
the Facility.
2. Menenement Rights. The City hereby grants to the Manager the exclusive right end license,
subject to the terms end conditions contained herein to:
(a) Operate, manage, market, and arrenge programming for the Facility.
(b) Provide end sell, cna/or sublicense for the provision end sale of, all food, beverages, souvenirs,
merchandise and printed materials at the Facility. The foregoing shall include the exclusive right to provide end sell
alcoholic beverages.
(c) Provide all services required for the management, use end operation of the Facility, including, but not
limited to, all of those services end matters specifically identified in this Agreement, end excluding only those matters
specifically identified in this Agreement as being the responsibilities of the City.
(d) Charge admission to patrons of all events held at the Facility end to charge for use of the Facility.
5~(5'?;~ ::3. Cenitalization of Facility.
__S~x mouths prior ~ ~,. opemg of the Faciltty (the Cap ~tehzatmn Date"), the Ctty shall promde
$243,949:00 (the "Capitalization Amount") to, t~z Manager to capitalize the Manager's Facility Operating Account (the
"Operating Account"). On the one year anniversary ,:~at¢ of the Capitalization Date, the Capitalization Amount shall be
z~c, by the CPI-U, up to but not to exceed a three percent (3%) adjustment, and the City shall contribute
such ~ Capitalization Amount to the Operating Account.
;, ,~:($~ ~ ~ition to the p~?nt p~[he Capitalization .... ~t~ g~ promdcd for m
Section 3fb~ ~¢oIV. on the c, ac yca~a~ anmversary of the opcmmg date of the
Facihty ......... : ........ j ............ the C~ly shall ~tlfe to the .... ~,~
an mount equal to lhe actual ~:operafiug deficit of t~,; raz~cj for tllc, i?~},,; ~;cl-cc (12) raonth
.......... j~ as determined by an accotmtmg firm mmtually agreed to by the Manager and the C~ty.
~-~~.flot'~tb exceed the wamediately prcccdhxg ,;el-cc (12) ~nc, nth hotc'J, not,;l tax,~ ~- ~i~
g erated by the ...... ,.j ............ ,j ~,,~.tcxt ~
4. Management Res_ggnsibilities. Except as otherwise provided in this Agreement, all aspects of the
management, use and operation of the Facility shall be the responsibility of the Manager including, without limitation
the following responsibilities:
(a) Subject to Section 3, the Manager shall be responsible for all uperating costs and expenses of the
Facility including all ensts and expenses incurred in connection with the management, marketing, use,
occupnney and operation of the Facility. The Manager shall prepare and submit to the City Manager, prior to
November 1 of each year, an annual budget for the Facility~ The annual budget shall be submitted to the City
Manager for informational purposes and shall not be subject to the approval of the City. The Manager shall
operate the Facility within the scope of the budget or any amendments thereto which the Manager has
previously submitted to the Cit
(b) The Manager shall operate and conduct all operations of the Facility with the objective that all
persons who patronize the Facility shall be treated in an orderly, safe and courteous manner.
(c) The Manager shall act in accordance with prevailing industry standards to prevent any nuisance or
hazardous activity to occur at, on, about or within the Facility. The Manager shall take all reasonably
necessary action consistent with industry standards to ensure that employees, performers, vendors, lessees,
subconWactors or any other persons utilizing, occupying or patronizing the Facility, shall not engage in any
activity that may cause reasonably foreseeable damage to the Facility or persons.
(d) The Manager shall be solely responsible for safety, security and maintaining good order wittfin the
Facility at all times. The Manager shall take and shall cause all subcontractors to take commercially
reasonable precautions at all times for the protection of persons and property within the Facility, including, but
not limited to, instructing, maintaining and supervising safety precautions and programs in connection with the
management, use, occupancy and operation of the Facility.
(e) The Manager shall use commercially reasonable efforts to ensure that its personnel and all
subcontractors observe and obey laws in connection with all of their work at or about, or otherwise involving
the Facility.
5. Murketin Res onsibilities. The Manager shall direct all marketing activities. The Manager shall
~!? anf! ~nplamem a promotional plan for the Facility that shall be submitted to the City~ for
~ ~a~ys al~r the date ~~ e~ O~s~
~o£th~l~. The plan shall be reviewed and updated by the Manager and submitted to the City
Manager once each year. The plan shull be submitted to the City Manager for informational pm'pnsas and shall not be
subject to the approval of the City. The City agrees to cooperate with the Manager to obtain the support of the Chamber
~ C~'~ ~onve~9~ and Visitors' Bureau in the marketing of the Facility,:
6. ~nsibiliti~. The Manager shall develop and maintain all schedules for events held at
the Facility and shall be accomplished in a manner to maximize the use of the Facility. The Manager shall use an event
rental agreement acceptable in form to the City. The Manager is authorized to negotiate rental agreements for the
Facility.
7. Em~lovea Mananement Resoonsibilifies. The Manager shall have the following responsib~ities with
respect to the management of the staff and employees of the Facility:
4
(a) The Manager shall have sole responsibility for, and the sole right to control and supervise its
personnel and subcontractors, including all of the means, methods, details and other aspects of the
management, use and operation of the Facility, to the extent this Agreement does not provide otherwise.
(b) The Manager shall determine staffing needs for the operation and management of the Facility and
shall be responsthle for providing personnel to fulfill such positions and shall determine the terms and
conditions of their employment/engagement and shall be responsible for paying all compensation and benefits.
(c) The Manager shall assign an operation manager to oversee the services to be provided under this
Agreemant. The operation manager shall be capable of and responsible for assuring the integrity of the
services provided by Manager as required by this Agreement. The Manager shall promptly notify the City
Manager of the selection of the operation manager of the Facility.
(d) The Manager shall employ, train and supervise all personnel who will be providing any services by
the Manager in connection with the purposes of this Agreement. All such personnel shall have appropriate
qualifications and experience and be in sufficient numbers to provide all services for the opcmfious under this
Agreement.
(e) The Manager shall address all employee training needs and COnduct regularly scheduled training
programs for the personnel who will be furnishing services for the Facility.
(f) The Manager shall take reasonable steps and shall direct all of its employees and subcontractors to at
all times present a neat and attractive appearance, to be courteous, efficient and properly trained, and not to use
improper language or act in a loud or boisterous manner.
(g) The Manager shall be responsible for providing all personnel nceassary to set up, operate, and clean
the Facility.
(h) The Manager agrees, represents and warrants that it will not at any time discriminate against any
employee or subcontractor, or against any invitee or other person or entity whatsoever, because of race, creed,
color, reilgion, sex, age, national origin, disability, or status as a disabled veteran. The Manager shall post in
conspicuous places within the administrative offices at the Facility, which shall be available to employees and
applicants for employment, notices setting forth the provisions of the nondiscrimination clause required by this
Paragraph. In all solicitations and advertisements for employment placed by or on behalf of the Manager, the
Manager shall state that it is an equal opportunity employer.
(i) The Manager shall pay to the appropriate authority for all Federal, State, local and other payroll taxes,
workers' compensation insurance, employer's portion of State and Federal unemployment compensation taxes,
social security taxes, and, at the Manager's discretion, to eligible employees and independent contractors,
accident and health insurance, life insurance, and retirement benefits for all employees affiliated with the
operation of the Facility.
8. Onerational Maintenance Resnonsibilitias. e Manager shall have the
following respousthilities with respect to the operational malnt~ce of the Facility:
(a) The Manager shall repair, repince, clean, paint and provide normal day-to-day maintenance and
repair as necessary to all equipment and leasehold improvements located in the Facility.
(b) The Manager shall deposit in receptacles provided by the Manager all waste, garbage and refuse
which shall accumulate in the Facility and shall keep the Facility in a good, clean and sanitary condition.
Foodservice trash and garbage removal from or generated by the Facility shall be the sole responsibility of the
Manager.
(c) The Manager shall provide ail r~:day to day custodial and ordinary maintenance services
required to maintain the mtenur ~ exterior of the Facthty m good, safe, clean and sanitary condition and
gh fthis Agree ..................................................
5
Manager shall promptly notify the City of any need, known to the Manager, for the repair or replacement of
uny defect, malfunction or other inadequacy in the Facility, including the stmcture.!'~i*~ exterior und uny
capital improvements regardless of who has financial responsibility for the repair or replacement of such.
Ordinary maintenance end individual repairs costing less than $1,000 shall be made by the Manager up to an
aggregate in uny fiscal year of $15,000. The City shall be respons~le for repairs or malntenunce in excess of
$1,000 individually end $15,000 in the aggregate in uny fiscal year. The Manager shall prepare a rolling five
year capitol improvement budget for the Facility end make a recommendation to the City Manager end the City
shall fund und make the capital improvearents as approved by the City Council in the capital improvement
budget.
(ed~_ The Manager shall keep in force all maintenance end service contraets including but not limited to
telephones, fire extinguishers, air conditioners, Simplex clocks, fire alarm system and sprinkler system. The
City shall cooperate wilh the Munager to provide the Munager with the benefit of eny maintenance or service
contracts the CRY may be a party to.
(~_) The Manager shall maintain a schedule of all needed repairs known to the Manager including capital
improvements end/or replacement. Said schedule shall be provided to the CRy Munager not later thun
November 1 annually.__
(g~)_ Except as otherwise provided in this Agreement, the Manager shall be responsible for all financial
affairs, other than debt service~ of the Facility, und all services related to the marketing, management, use end
operation of the Facility, including without limitation, ~, ~:V,s~' ~xes licenses, costs of all events,
professional services involving Facility operations; und all budgeting, accounting end reporting systems
required by this Agreement und the generation of all required finuncial reports detailing revenues and
The Manager shall not do, or cause to be done, unything which will interfere with the effi~cliveness or
accessibility of any ufilRy connections or service in, at or about the Facility, inclading~ but not limited to, water,
eleetricity, telephones, waste und sewage disposal, heating, ventilation and ak conditioning, fire und security
monitoring systems, or uny portions of the foregoing without prior written approval of the City, which shall not
be unreasonably withheld. The Munager shall not do or cause to be done enything that would unreasonably
interfere with flee access and passage in the Facility und the adjacent and adjoining public areas, streets,
parking lots and sidewalks.
9. Food Produ~ The Manager shall have the following responsibilities with respect to the
food product management of the Facility:
(a) The Munager shall munage all appropriate food und beverage requirements necessary to fulfill the
purposes of this Agreement.
(b) The City shall not be respons~le for uny goods, food, beverages, merchendise or equipment stored at
the Facility by third parties, nor will it be responsible for damages resulting fi.om a power failure, flood, fire, explosion
und/or other causes which result in the damage or destruction of the foregoing items, other than for gross negligence or
intentional misconduct on the part of the City or its employees, agents or legal representatives.
(c) During all events at the Facility where them are concession sales, the Manager shall post signs und
provide means advertising the prices of all items offered for sale.
10. Oueration Plen. The Menager shall at least annually develop end submit to the City end at ail times
have in effect un operation plun ("Operation Plan") which provides for the guidelines and usage of the Facility by the
6
Manager, control of the services being provided by the Manager and other such matters as necessary to fulfill the
purposes of this Agreement. The Operation Plan shall cover and include but not be limited to the following matters:
A. Maintenance, repair, replaeemant and usage of the equipment and leasehold improvements.
B. Prices of the food, beverages and services being provided at the Facility.
B. Menus and items offered for sale.
D. Use of equipment and leasehold improvements.
E. Rules and regulations relating to the sale and distribution of food and beverages.
F. Sponsomhip, advertising and promotion of the Facility and the services being provided pursuam to
this Agreement.
G. The method, type and form of the financial records to determine the payments to be made by the
Manager under this Agreement.
H. Usage of "logos", on menus, cups, napkins and the like used in conjunction with the providing of food
and beverage for an event.
L Sanitation and cleaning guidelines.
J. Off-site sales of food and beverages in conjanetion with an event.
K. Scheduling the usage by the Manager of the Facility or any of its facilities.
L. Crowd control.
M. A dress code and training program for the Manager and Facility employees providing food, beverages
and other services, as well as staffing guidelines for each event.
N. Operation Slamdards.
O. Entrance procedures for employees working an event.
P. Procedures to address revenue sharing and sponsorship opportunities for selected events at the Facility.
Q. Procedures for selecting con, actors and vendors.
11. Imurovements. Improvements for the Facility shall be as provided below:
(a) The City shall provide at its sole cost and expense a mm key convention facility that shall include all
equipment necessary for the operation of the Facility, including without limitation, all tables, chairs, tableware and all
other equipment necassary for the operation ofthe Facility. The City guarantees that the equipmeut will be sufficient to
provide the services required under this Agreement. The equipment and location for the installation of the same shall be
mutually agreed upon by the City and the Manager. Replacement of non-capital equipment shall be the respensibllity of
the Manager. For purposes ofthis Section I l, non-capital equlpmeut shall mean any nun-capital equipment as defined
by generally accepted aceouuting principles.
(b) The City shall be responsible for capital improvements to the Facility. Capital improvements shall be
expenditures that are ora long-term character and as defined by generally accepted accounting principles. The Manager
shall not later than November I annually provide the City Manager with a five year capital improvement plan that shall
propose capital improvements of the Facility.
(c) The Manager shall not permit any waate, injury, or damage upon or to the Facility, ordinary wear and
tear excepted. At the expiration of this Agreement, the Manager shall leave the Facility in at least the same condition
that existed at the commencement of this Agraemant, ordinury wear and tear excepted. All eqdipment shall be the
property of the City at the termination of this Agreement.
(d) The Manager shall not, without the prior wilton approval of the City, remove or cause to be removed
or permit the removal of, or fi-om the Facility any property provided by or belonging to the City, except for ordinary and
necessary repairs.
(e) The Manager shall no~ install or remove or cause or permit, (unless permitted by the City) the
installation or removal of any fixtures, partitions, equipment, furnishing, or other property where to do so will deface,
injure or damage the floors, walls, ceilings, or any portion of the Facility or proper~ canuec~ed or adjacent thereto. The
Fac'flity shall not eanse or allow any stmatural alterations or physical modification in or to the Facility without having
obtained prior written approval fi-om the City. Such approval may be conditioned upon the Manager's express, written
agreement to return the same to its original condition immediately following the use or purpose for which any such
change or alteration has been made. Any such approval by the City to a particular alteration or ehenge shall not be
deemed a consent to any other or additional alteration or change at that time or thereafter unless specifically so stated in
the advance wr~en approval executed by the City.
12. Permits. Licenses, Taxes. The Maanger shall apply, procure and pay for and maintain all permits and
licenses that are required or necessary for the management, use, occupancy or operation of the Facility. The City shall
fully cooperate with the Manager with its efforts as they relate to licenses and permits and shall execute any and all
agreements, instruments and documents and take such actions to accomplish these purposes. The Manager, ifraquired,
shall charge, collect and pay over to the appropriate taxing authority, all applicable taxes due as a result of the
performance of the Manager's duties under this Agreement, including but not limited to Iowa Sales and Use taxes on
admissions, if any. The Manager shall cause a statement substantially similar to the following to be included in all
written agreements entered into a~er execution of this Agreement, with third parties to which the Manager is a party
with respect to the Facility: "Yendor agrees that it shah look solely to the Manager for all claims and damages arising
out of this ~4greement, and that it shall have no recourse against the City or any of its employees, agents, officers or
officials with respect to any claims or damages arising under this .4greement. "
13. Term and Termination. The term of this Agreement shall be for a ten year period commencing six
(6) months prior to the date of the opening of the Facility (the "Commencement Date"). After the first three years of the
operation of the Facility, this Agreement may be terminated by either party hereto, without cause, upon six (6) months
notice to the other party. Either party shall have the fight to terminate this Agreement upon sixty (60) days notice in the
event of a mmerial breach by the other party, provided the party receiving the notice shall have thirty days O0) fi-om
receipt ofthe notice to cure the default. Upon termination, all obligations ofthe parties hereunder shall cease.
14. O;~eratine Profit. -The Manager shall be entitled to retain and pay itself from the Opcra:k~g
; ~.a~ ~?fits ~ mcom~ ~ ~ ~F~ty ~.~x~ss of the expenses of the Facility
15. Insuections. Upon reasonable prior notice to the Manager, the City shall have the right to enter the
Facility at all reasonable limes for the purpose of determining whether the terms, covenants and conditions contained in
this Agreement and the Operation Plan are being fully and faithfully observed and performed.
16. Records.. The Manager shall maintain books and records for the services provided under this
Agreement and said books and records shall be open for inspection by the City or its designated representative at
reasonable times during the term of this Agreement and for a period not to exceed three (3) years thereafter. The
Manager shall provide the City with sales records, bank deposit receipts, cash register receipts, banquet contracts,
banquet deposits, final banquet invoices and other accouming forms reasonably requested by the City.
17. Indemnification. The Manager hereby agrees to indemnify, defend and hold harmless the City and its
officers, commissioners, employees, agents, servants or representatives fi-om and against any and all claims, demands,
damages, liabilities, actions, judgments, or execution of third parties of any kind or nalure whatsoever, whether at law or
in equity, including, but not limited to, reasonable attorney's fees end court costs, arising out of, relating to, resulting
8
from, or caused by the negligence or willful misconduct of the Manager, its officers, employees, agents, servants,
subconlractors or representatives during the term of this Agreement. The Manager shall be given prompt notice of any
claims for which the indemnification will be sought, and shall be given full and complete cooperation from the City in
the defense or settlement of all such claims, and shall be given full authority in the defense or settlement of any such
claims, with the exception of claims which relate to City reimbursement responsibilities. Neither party shall have the
authority to bind the other to any settlement without such partes prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed.
The City hereby agrees to indemnify, defend end hold harmless the Manager and its officers, commissioners,
employees, agents, servants or representatives from and against any and all claims, demands, damages, liabilities,
actions, judgments, or execution of third parties of any kind or nature whatsoever, whether at law or in equl~, including,
but not limited to, reasonable attorney's fees and court costs, arising out of, relating to, resulting from, or caused by
negligence or willful misconduct of the City, its officers, employees, agents, servants, subcontractors or representatives
during the term of this Agreement.
18. Insurance. The Manager shall obtain ~naiutain, pursuant to the annual budget for the Facility, the
insurance as set forth in the atIeched Schedule in such amounts as the parties shall mutually agree. The Manager shall
recommend specifications and submit a plan annually as part of the budget process, to the City for approval. The ~
19. Miscellaneous.
(a) The Manager shall not use or permit to be used any property of the City other than for its intended
purpose.
(b) This Agreement and the Exhibits attached hereto embodies the entire Agreement between the Cily and the
Manager, and there are no other representation, promises, agreements, conditions or understandings, either oral or
written, between the City and the Manger other than as set forth in this Agreement.
(c) No subsequent alteration, amendment, change or modification to this Agreement shall be binding upon any
party unless in writing and signed by the party to be charged, which writing must expressly refer to the fact that it is
altering, amending, changing or modifying this Agreemeut.
(d) Any and all changes, modifications or amendments to this Agreement may only be made jointly by the City
and the Manger. Any and all such abanges shall be subject to the approval of the Mayor and City Couucil of the City of
Dubuque.
(e) By entering into this Agreement, none of the parties hereto intend to create, nor shall this Agreement be
deemed or construed as creating, any partnership, joint venture, agency or other legal relationship between the City
and/or the Manager, other than that of the City as owner, and the Manager ns independent contractor.
(f) This Agreement is not intended by any of the provisions hereof to make any person or entity not a party to
this Agreement a third party beneficiary hereunder, and is not intended to benefit any such third party.
(g) This Agreement shall be governed by the laws of the State of Iowa. The City and the Manager expressly
submit themselves to the jurisdiction of the Courts of the State of Iowa.
(h) The Manager shall not transfer or assign this Agreement nor the rights, privileges or premises granted
under this Agreement in whole or in part to any other person, firm or corporation, without the prior written consent of
the City, v&,~,~h ~c,r~cat shall ~,,t b~ ur~ca~aably ;;-~L,~Id, ~,,~;5dc~ th~ t~-d p,.,ty tranzfzrcc a~'czs t,, ~--~,15- v~r~h ~
(i) The City's representative for purposes of this Agreement is its City Manager and the Manager's
representative is its President.
O) The Manager shall, upon the expiration or earlier terminmion of this Agreement, for any reason,
peacefully surrender to the City possession of the Facility, and the Manager shall forthwith remove all of its property
fi.om the Facility. Unless the City has agreed otherwise, the Manager shall forthwith retm-n the Facility to the same
condition it was upon the commencement of this Agreement, reasonable wear and tear excepted for repairs which the
Manager is not obliguted to make pursuant to this Agreement.
(k) City reserves the right to name the Facility.
IN WITNESS HEREOF, the parties hereto have executed this Agreement as of the day and year first above
CITY:
City of Dubuque, Iowa
MANAGER:
Platinum Hospitality Group, LLC
By:. By:
Its: Its:
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