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Dubuque Racing Association Lease Agreement_Third AmendmentTHE CITY OF ~ Dubuque DUB E Masterpiece on the Mississippi 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Third Amendment to Amended and Restated Lease Agreement between the City of Dubuque, Iowa and Dubuque Racing Association, Ltd. DATE: January 25, 2009 On January 23, 2009, the Dubuque Racing Association approved an amendment to the existing Lease Agreement between the City of Dubuque, as owner of Dubuque Greyhound Park and Casino, and the Dubuque Racing Association. The foundation of this amendment are the requests of new DRA General Manager Jesus Aviles, as he identified the flexibility he needed to operate a successful gaming and entertainment facility in light of the competitive environment that exists in this industry. The success of this facility is very important as the City receives one percent (1 %) of the coin-in as a lease payment, which is estimated at $7,167,954 in the Fiscal Year 2010 budget. The facility also provides over 400 jobs to the local economy and purchases millions of dollars each year in goods and services. The added entertainment option for residents and visitors adds to the community's quality of life. The City will be giving up several million dollars in revenues over the next three years because of the elimination of distributions of the DRA net cash remaining at the end of these fiscal years and additional dollars in future years because of the way the distributions are calculated. This is important to the long-term viability of Dubuque Greyhound Park and Casino. The DRA has decided to support the City of Dubuque's sustainability initiatives by creating a permanent endowment fund with a portion of their distribution that is reserved for charitable giving. As this endowment fund grows, it will annually provide about 5% of the fund balance to be distributed to charities. This will always be available to charities even when the DRA experiences financial challenges, as is occurring now, or if for some reason the concept of gaming is no longer attractive to the general public, as has happened with greyhound racing. This agreement is subject to final approval by the Iowa Racing and Gaming Commission. I want to acknowledge the hard work of City Attorney Barry Lindahl, Budget Director Jennifer Larson, former DRA Board President John Schmidt, current DRA Board President Dan Kruse, DRA Attorney Steve Krumpe of the O'Connor & Thomas Law Firm, and DRA General Manager Jesus Aviles in crafting this document. I respectfully recommend Mayor and City Council approval. t! Micha I C. Van Milligen MCVM/jh Attachment cc: Jesus Aviles, CEO & General Manager, Dubuque Greyhound Park & Casino Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager .#~ ~ _ a Y ~ ~ _'~' 1 T ~ F~~ ~JJ {~ February 23, 2009 Mr. Kevin Firnstahl City of Dubuque City Clerk's Office 50 West 13th Street Dubuque, Iowa 52001 Dear Kevin: L.s ~T..a ~~~ ~ 4e 4""^ `~ _ _ ~-- ~ ~~~ ~, ; .` ;= 1 - ,_ e~ ~. _-~1 `ate ~3on ~;~~,~ ~~ ~;r-~ Enclosed please find the original executed document of the Third Amendment to the Lease Agreement between the DRA and the City of Dubuque. As requested, I am sending the original to you and have kept a copy for my records. If you have any questions or need additional information, please feel free to contact me. Sincerely, r ,~ ~, fr ,. ,~~` ~ ~ r t~~ ~.~~ t; Andrea M. Greene ~ ~, ~ ` ~ ~ ~~ . r Executive Assistant/Recording Secretary Dubuque Greyhound Park & Casino/ Dubuque Racing Association Direct Phone: (563)585-2955 This THIRD AMENDMENT TO AMENDED AND RESTATED LEASE AGREEMENT is dated for reference purposes the 2nd day of February , 2009. Whereas, the City of Dubuque (City) and Dubuque Racing Association, LTD. (Association) are parties to an Amended and Restated Lease Agreement dated for reference purposes the 31 st day of March, 2004, as amended by the FirstAmendment dated April 4, 2005, and the Second Amendments dated June 29, 2005; and Whereas, the parties now desire to further amend the Amended and Restated Lease Agreement as set forth herein: Par. 1 is amended to read as follows: Term of Lease. The term of this Lease shall commence on the 1 St day of April, 2004, and terminate on the 31St day of March, 2024. 2. Par. 3 is amended to read as follows: 3. Rental. Association shall pay City monthly rent equal to one per cent (1%) of gross receipts from all gambling games (including but not limited to slot machines and video machines which simulate table games of chance) and four and eight-tenths per cent (4.8%) of the table game adjusted gross receipts (amounts actually wagered at table games less winnings paid to wagerers) for table games conducted at Dubuque Greyhound Park and Casino for each month such games are conducted. Such payments shall be due on the tenth day of the following month. City shall expend such funds for capital expenditures, including but not limited to, street lighting, street improvements, the Civic Center, parks & recreation, the replacement of motor vehicles and operating equipment, economic and tourism development projects. In the event rent payments under this paragraph exceed the budgetary needs enumerated for the foregoing capital expenditures in City's general fund capital improvements budget, then the City shall use remaining rents for funding of police, fire, and other public safety departments. City shall use any rent payments remaining after exhausting the foregoing purposes, if any, Page 1 of 7 ~;;/ for mass transit and library budgets. Notwithstanding the foregoing, however, City shall not be limited in any manner from the issuance of debt to fund capital improvements for other purposes or from using other revenue sources, required to be dedicated to capital improvements, to fund the capital improvement budget. All rent payments shall be used by City exclusively for the promotion of social welfare under IRC §501(c)(4). 3. Par. 34 is amended to read as follows: 34. Maintenance of Facility. a) The Association agrees that, at all times during the term of the sublease of Lot D by Association to Peninsula Gaming LLC and its successors, the Association shall, at its own expense, maintain, preserve and keep Lot D in good repair and in good working order and condition, including but not limited to snow removal, mowing, landscaping, sweeping of parking areas, lighting, cleaning, removal of litter, and repair and replacement of surfaces The assumption by a third party under a sublease of the premises of any such obligation imposed on the Association in this paragraph shall not relieve the Association of its obligation to the City hereunder. Association's obligationswith respect to Lot D shall terminate upon expiration or othertermination of the sublease of Lot D by Association to Peninsula Gaming LLC. b) The City agrees that, at all times during the lease term, the City shall, at its own expense and at commercially competitive rates, maintain, preserve and keep Lot C in good repair and in good working order and condition, including but not limited to snow removal, mowing, landscaping, sweeping of parking areas, lighting, cleaning, removal of litter, and repair and replacement of surfaces (hereinafter "maintenance"). The Association shall, during the term of the sublease of Lot C by Association to Peninsula Gaming LLC, reimburse City for City's actual annual cost for such maintenance within thirty days after receipt of a statement from City forsuch costs. The Association's obligation to reimburse City for such costs shall not commence until such time as City has notified the Association that it has exhausted the funds in the former Depreciation and Page 2 of 7 Improvement Fund for the repair and replacement of surfaces in Lot C. The Association agrees that City shall be entitled to the funds in the former Depreciation and Improvement Fund for such purpose. Association's obligations with respect to Lot C shall terminate upon expiration or other termination of the sublease of Lot C by Association to Peninsula Gaming LLC. 4. Par. 41 is amended to read as follows: 41. Distribution of Net Cash Proceeds. a) Association shall, following the end of each fiscal year (except as provided under subparagraph (e) below), distribute its net cash remaining after payment of the following expenses: i) operational expenses and expenses for normal replacement items; ii) required payments to the Depreciation and Improvement Fund underthe Dubuque Greyhound Park and Casino Lease (Part A) above; iii) provision for (i) operating funds, (ii) capital improvements, and (iii) a cash reserve fund not to exceed five per cent (5%) of total budget for Dubuque Greyhound Park and Casino forthe following fiscal year (the Cash Reserve Fund), which is calculated each year and is not cumulative; iv) required debt service payments (including prepayment of debt, upon Board approval and City consent) for debt incurred with the consent of City and for activities pursuant to Iowa Code Chapters 99D and 99F; v) distributions to charities or non-profit entities from operational funds, not to exceed the greater of Four Hundred Fifty Thousand Dollars ($450,000.00) orsixty- five (65) basis points (0.0065) ofAssociation'sadjusted gross receipts from all gambling games (slots and table games); vi) funds which Association is required to provide as collateral or otherwise for purposes of obtaining and securing any bond required by the Iowa Racing and Page 3 of 7 N°" Gaming Commission pursuant to Iowa Code Section 99D.10 (1995); and vii) payment into a capital reserve fund (the Capital Reserve Fund) subject to a maximum annual payment of Five Hundred Thousand Dollars ($500,000) and a total balance not to exceed Five Million Dollars ($5,000,000.00)), for use in funding future capital improvements or gambling devices (including but not limited to gaming devices and necessary hardware and/or software relating to the installation or operation of such gaming devices) in the discretion of Association's board ofdirectors; as follows: Fifty percent (50%) to City; and fifty percent (50%) to be distributed to charitable or non-profit recipients, and/or allocated to Association accounts for use in advancing Association's non-profit purposes (including, by way of illustration and not limitation, contributions to Association's Future Fund) in the discretion of Association's board of directors. Commencing at the end of Fiscal Year 2011, and continuing thereafter during the term of this Agreement, not less than 30% of the 50% not allocated to City shall be contributed to an irrevocable permanent endowment established at an organization in the City of Dubuque where the principal is invested, and only a portion of the investment earnings is spent and the restofthe earnings are directed back into the fund, so that the endowment grows over time. The portion of the investment earnings spent shall be available for distribution to other charitable and non-profit recipients and distributed in the discretion ofAssociation'sboard ofdirectors. However, if, after the 30% distribution to the endowment fund in a fiscal year, the amount available for distribution to other charitable and non-profitable recipients is less than One Million Dollars ($1 M), the distribution to the endowment may be reduced so that the amount available for distribution to other charitable and non-profit recipients shall be One Million Dollars ($1 M). The endowment fund shall be established by Association not later than July 1, 2009, on terms and conditions approved by Association's board ofdirectors. b) City shall use funds distributed to City under this Par. 41 in the same manner and for the same purposes that City is Page 4 of 7 authorized to use rent payments under Par. 3 of this Agreement. c) Monies deposited in the Cash Reserve Fund are the sole property of Association and shall be designated for the sole purpose of maintaining a cash balance for Association. Any interest accruing on the balance in the Cash Reserve Fund shall be available to the Operating Fund. d) Association shall be obligated under this Par. 41 to distribute City's share of net cash remaining at the end of each of fiscal year as described in subparagraph 41(f) no laterthan March 31 following the end of each such fiscal year, except as provided in Par. 41(e) below. e) Notwithstanding the foregoing, there shall be no distribution under this Par. 41 from net cash remaining following fiscal years 2008, 2009 and 2010 (ending November 30, 2008, 2009 and 2010, respectively). However, distributions to charitable/non-profit entities will be made from net cash remaining following Fiscal Year 2007, as set aside by Association's Board of Directors on January 15, 2008 to be under Association's Annual Grants Program, on the following schedule: i) one-third shall be distributed prior to June 30, 2009; ii) one-third shall be distributed after the end of fiscal year 2009 and prior to June 30, 2010; and iii) the remaining amount shall be distributed after the end of fiscal year 2010 and prior to June 30, 2011. f) All net cash remaining at the end of Fiscal Years 2008, 2009, and 2010, as computed under paragraph 41(a), shall be held by DRA and may be used for any of the purposes in paragraph 41(a). However, any net cash remaining at the end of Fiscal Year 2011 shall be distributed under Par. 41(g). g) Normal distributions to the City and charitable/non-profit recipients shall resume under Par. 41(a) following fiscal year 2011 and continue following each fiscal year thereafter during term of this Lease. Page 5 of 7 ~j/ CITY ®F ®UUQU, I®W~4 gy. Roy D. d~uol, Mayor 4 ®ul3uc~u~ LT ®. By. Page 6 of 7 ident~° ASS®C1,4T°I®IV, CONSENT TO AMENDMENT American Trust & Savings Bank consents t the foreg ing Third Amendment to Amended and Restated lease Agreement this ,~ay of , 2009, AMERICAN TRUST & SA~CiNCS BANK ay: Its ~,~,~ /~~ Page 7 of 7 ~- COMPARISON OF THIRD AMENDMENT TO AMENDED AND RESTATED LEASE 1._ Term of Lease. The term of this Lease shall commence on the 1St day of April, 2004, and terminate on the 31St day of March, 242024. 3._ Rental. Association shall pay City monthly rent equal to one ~er~cent (1 %) of gross receipts from all gambling games (including but not limited to slot machines and video machines which simulate table games of chance) and eeefour and eight-tenths per cent (44_8%) of the fisted stable game adjusted gross receipts (amounts actually wagered at table games less winnings paid to wagerers) for table games ,conducted at Dubuque Greyhound Park and Casino for each month such games are conducted. Such payments shall be due on the tenth day of the following month. -City shall expend such funds for capital expenditures, including but not limited to, street lighting, street improvements, the Civic Center, parks & recreation, the replacement of motor vehicles and operating equipment, economic and tourism development projects. -In the event rent payments under this paragraph exceed the budgetary needs enumerated for the foregoing capital expenditures in &City's general fund capital improvements budget, then the City shall use remaining rents for funding of police, fire, and other public safety departments.- City shall use any rent payments remaining after exhausting the foregoing purposes, if any, for mass transit and library budgets. Notwithstanding the foregoing, however, City shall not be limited in any manner from the issuance of debt to fund capital improvements for other purposes or from using other revenue sources, required to be dedicated to capital improvements, to fund the capital improvement budget. All rent payments shall be used by City exclusively for the promotion of social welfare under IRC ~ ~ 501(c)(4). 34. Maintenance of Facility. a~The Association agrees that, at all times during the lease-term of the sublease of Lot D by Association to Peninsula Gaming LLC and its successors, the Association shall, at its own expense, maintain, preserve and keep , a~-Lot D in good repair and in good working order and condition, including but not limited to snow removal, mowing, landscaping, sweeping of parking areas, lighting, cleaning, removal of litter, and repair and replacement of surfaces The assumption by ~D-~€~a third party under a sublease of the premises of any such obligation imposed on the Association in this paragraph shall not relieve the Association of its obligation to the City hereunder. Association's obligations with respect to Lot D shall terminate upon expiration or other termination of the sublease of Lot D by Association to Peninsula Gaming LLC. b) The City agrees that, at all times during the lease term, the City shall, at its own expense and at commercially competitive rates maintain, preserve and keep Lot C in good repair and in good working order and condition including but not limited to snow removal mowing, landscaping, sweeping of parking areas, lighting, cleaning, removal of litter and repair and replacement of surfaces (hereinafter "maintenance"). The Association shall during the term of the sublease of Lot C by Association to Peninsula Gaming LLC reimburse City for City's actual annual cost for such maintenance within thirty days after receipt of a statement from City for such costs. The Association's obligation to reimburse City for such costs shall not commence until such time as City has notified the Association that it has exhausted the funds in the former Depreciation and Improvement Fund for the repair and replacement of surfaces in Lot C. The Association agrees that City shall be entitled to the funds in the former Depreciation and Improvement Fund for such purpose. Association's obligations with respect to Lot C shall terminate upon expiration or other termination of the sublease of Lot C by Association to Peninsula Gaming LLC. 41._ Distribution of Net Cash Proceeds. a~_Association shall, a~following the end of each e~+ts fiscal yea~syear (except as provided under subparagraph (e) below), distribute its net cash remaining after payment of the following expenses: i) operational expenses and expenses for normal replacement items; sii required payments to the Depreciation and Improvement Fund under the P-afki~Dubuaue Greyhound Park and Casino Lease (Part ~~ above; d}-iii provision for operating funds ii capital improvements, and (iii) a cash reserve fund not to exceed five per cent (5%) of total budget for Dubuque Greyhound Park and Casino for the following fiscal year (the Cash Reserve Fund), which is calculated each year and is not cumulative; e}iv required debt service payments- ~~, (including prepayment of debt, upon Board approval and City consent) for debt incurred with the consent of City and for activities pursuant to Iowa Code Chapters 99D and 99F; f~--v) distributions to charities or non-profit entities from operational funds, not to exceed the greater of Four Hundred Fifty Thousand Dollars ($450,000.00) or sixty-five (65 basis points (0.0065) of Association's adjusted gross receipts from all gambling games (slots and table games); vi funds which Association is required to provide as collateral or otherwise for purposes of obtaining and securing any bond required by the Iowa Racing and Gaming Commission pursuant to Iowa Code Section 99D.10 (1995}; as-#el~e,~ ~ and o ° ~ }hir}~i r~ornon} /Z(10/ \ }n rocor~ro ~' \ I w u -rc..rvrvc fu~t~ ~~ y~j~noc nn I Innn tCl'tttii"~t~'1~J ~~-~ c v ~ n rne~CYFr-ttF d~J~~~etdtFe~-nQfr ?cnni~4inn' c~~~n }.~{j~p n~~r~on~ /7 0/B\ ~f s~n re~rvo ~Fi~n~ ch~~~ll ~~h~o' vii) payment into" a capital reserve fund (the Capital Reserve Fund) subject to a maximum annual payment of Five Hundred Thousand Dollars ($500,000) and a total balance not to exceed Five Million Dollars ($5,000,000.00)), for use in funding future capital improvements or gambling devices (including but not limited to gaming devices and necessary hardware and/or software relating to the installation or operation of such gaming devices) in the discretion of Association's board of directors as follows: Fifty percent (50%) to City; and fifty percent (50%) to be distributed to charitable or non-profit recipients and/or allocated to Association accounts for use in advancing Association's non-profit purposes (including, by way of illustration and not limitation contributions to Association's Future Fund) in the discretion of Association's board of directors. Commencing at the end of Fiscal Year 2011 and continuing thereafter during the term of this Agreement, not less than 30% of the 50% not allocated to City shall be contributed to an irrevocable permanent endowment established at an organization in the City of Dubuque where the principal is invested and only a portion of the investment earnings is spent and the rest of the earnings are directed back into the fund, so that the endowment grows over time. The portion of the investment earnings spent shall be available for distribution to other charitable and non- profit recipients and distributed in the discretion of Association's board of directors. However if after the 30% distribution to the endowment fund in a fiscal year, the amount available for distribution to other charitable and non-profitable recipients is less than One Million Dollars ($1M), the distribution to the endowment may be reduced so that the amount available for distribution to other charitable and non- profit recipients shall be One Million Dollars ($1 M). The endowment fund shall be established by Association not later than July 1, 2009, on terms and conditions approved by Association's board of directors. b~_City shall use funds distributed to City under this pa~agra~Par. 41 in the same manner and for the same purposes that City is authorized to use rent payments under a~Par. 3 of this Agreement. rlonicinnc f~rovnonrJi+~~ro frnm Accnni }inr~'c rnc+n f .J ~#Att-~c-rTmra~ cnlohi by Accnnir.}inn's Rn rr~ of fliron+nr c~_Monies deposited in the ~,~~~as;a+RaT,°~,~ n~-~;a Cash Reserve Fund are the sole property of Association.- and shall be designated for the sole purpose of maintaining a cash balance for Association. Any interest accruing on the balance in the Fes~'r f~ ~nr} oh-~n ho rlonnci}o~J +n +~~~.d f~Cash Reserve Fund shall be available to the Operating Fund. d) Association shall be obligated under this Par 41 to distribute City's share of net cash remaining at the end of each of fiscal year as described in subparagraph 41(fl no later than March 31 following the end of each such fiscal year except as provided in Par. 41(e) below. e) Notwithstanding the foregoing there shall be no distribution under this Par. 41 from net cash remaining following fiscal years 2008 2009 and 2010 (ending November 30, 2008 2009 and 2010 respectively). However, distributions to charitable/non-profit entities will be made from net cash remaining following Fiscal Year 2007 as set aside by Association's Board of Directors on January 15, 2008 to be under Association's Annual Grants Program, on the following schedule: i) one-third shall be distributed prior to June 30 2009 ii) one-third shall be distributed after the end of fiscal year 2009 and prior to June 30 2010 and iii) the remaining amount shall be distributed after the end of fiscal year 2010 and prior to June 30, 2011. f) All net cash remaining at the end of Fiscal Years 2008 2009 and 2010 as computed under paragraph 41(a), shall be held by DRA and may be used for anv of the purposes in paragraph 41(a). However any net cash remaining at the end of Fiscal Year 2011 shall be distributed under Par. 41(g). g) Normal distributions to the City and charitable/non- profit recipients shall resume under Par. 41(a) following fiscal year 2011 and continue following each fiscal year thereafter during term of this Lease. SUMMARY OF THIRD AMENDMENT TO DRA-CITY LEASE ¶ of 3'~ Amends Changes made Amend- Current meat Lease ¶ 1 1 TERM of DRA-CITY LEASE: Extends term of DRA-City lease; current expiration is December 31, 2018 (established by the 2°a Amendment to the DRA-City lease); the new expiration date would be March 31, 2024. 2 3 TABLE GAME RENT FORMULA: Changes the formula for computing rent from table games so that rent is based on actual table game win rather than on the amount of chips purchased by patrons; the change is revenue neutral to both City and DRA. 3 34 ICE HARBOR LOT C MAINTENANCE: Transfers maintenance of Lot C in the Ice Harbor (which is leased by the City to DRA, and subleased by DRA to Diamond Jo LLC) to the City. The City maintains the rest of the Ice Harbor parking areas. DRA will reimburse the City from the balance remaining in the former Ice Harbor Depreciation and Improvement Fund, then from operating revenues a$er the D&I fund has been exhausted. 4 41 The most substantial changes to the lease are the changes to paragraph 41 of the DRA-City lease. ¶ of 3'~ Amend- ment Amends Current Lease ¶ Changes made 4 41(a)-(f) NEw FINANCIAL PROTECTIONS Fox DRA: The elimination ofDRA from distributions of "net cash remaining" at the end of fiscal years is offset in several ways: a) Creation of a new Capital Reserve Fund, which can be funded with "above the line" contributions up to a maximum of $500,000 per year, and up to a total accumulation of $5,000,000. New ¶41(a)(vii). The CEO/General Manager (Jesus Aviles) believes that this fund is crucial for DRA operations going forward. b) Express provision is made in new ¶41(a)(v) for DRA charitable/non-profit distributions "above the line" (i.e., before "net cash remaining" is calculated) of $450,000.00 or 65 basis points of DRA's gaming revenues (.0065 multiplied by DRA's adjusted gross receipts from slots and table games), whichever is greater. In other words, a minimum of $450,000 will be available for "above the line" each fiscal year; if revenues recover beyond FY 2008 levels, the amount will increase. c) Express provision is made in new ¶41(a)(iii) for provision, at the end of a Fiscal Year, for operational funds, capital ~rovements, and a cash reserve fund of5% (which must be replenished when used). ¶ of 3'" Amends Changes made Amend- Current ment Lease ¶ 4 41(e)- SUSPENSION OF DISTRIBUTIONS TO CITY AND CHARITIES/NON- (g) PROFITS FOR FY 2008-2010: ¶41(e) would create an exception for distributions of "net cash remaining" after Fiscal Years 2008, 2009, and 2010. There will be no distributions of "net cash remaining" to the City following those fiscal years due to changes in the competitive environment and the projection of diminished revenues from DRA operations in those years. Approximately $3.6 million dollars was set aside for distribution to charities/non-profits in Fiscal Years 2008, 2009, and 2010 from Fiscal Year 2007 revenues; this action was taken by the DRA Board at its meeting on January 15, 2008. Cash accumulated during this period may be used by DRA for any purposes permitted under paragraph 41. Unused cash (if any) accumulated during Fiscal Years 2008-2010 will be distributed following Fiscal Year 2011 using the 50/50 formula. See 3rd Amendment, ¶41(e), (fl, (g)• 4 41(g) RESUMPTION OF "NET CASH REMAINING" DISTRIBUTIONS AFTER FY 2011: "Net cash remaining" following Fiscal Year 2011 and each fiscal year thereafter through the term of the lease will be distributed according to the 50/50 formula discussed in the following section. See 3`d Amendment, ¶41(g) and below. 4 41(a)-(fl CHANGE IN DISTRIBUTION FORMULA: In light of the changes discussed under the first heading above ("NEw FINANCIAL PROTECTIONS FoR DRA"), DRA is deleted as a recipient of distributions from "net cash remaining" at the end of a fiscal year; currently, "net cash remaining" is distributed forty percent (40%) to the City; thirty percent (30%) to charitable and non-profit distributees selected by DRA through its Grants Program; and thirty percent (30%) to a reserve fund established by Association. Under the 3`d Amendment, provision must be made before "net cash remaining" for DRA operational funds, capital improvements, and a 5% reserve fund. The new distribution formula for "net cash remaining" under the Third Amendment would be fifty percent (50%) to the City and fifty percent (50%) to charitable and non-profit distributees selected by DRA through its Grants Program and to an endowment fund (see next section). Distributions to the City are to made no later than March 31 following a fiscal year (3`d Amendment, ¶41(d)). ¶ of 3'~ Amend- ment Amends Current Lease ¶ Changes made 4 41(a)-(f) ENDOWMENT FUND: An endowment fund would be established by DRA under ¶41(a)(vii) ofthe Third Amendment with an organization in the City of Dubuque selected by DRA. Starting at the end ofFiscal Year 2011 and continuing through the end of the lease, the endowment fund would be allocated 30% of the 50% available for charitable/non-profit purposes (or 15% of the total amount of "net cash remaining" at the end of a fiscal year). However, a minimum of $1,000,000 of the "net cash remaining" would be reserved for charitable/non-profit distributions through the DRA Grants Program each year; if necessary, the amount of the endowment fund contribution will be reduced enough so that $1,000,000 is available. Once the $1,000,000 minimum is satisfied, additional funds would go to the endowment fund until the endowment fund has received 30% ofthe total "net cash remaining" allocated to the charitable/non-profit distributions; any amounts remaining after that would be allocated to the DRA Grants Program. The endowment fund would be set up in the City of Dubuque by July 1, 2009 but, as noted, funding would not begin until after FY 2011. The terms and conditions of the endowment would be established by the DRA board, consistent with the purpose of the endowment. ¶ of 3~d Amends Changes made Amend- Current ment Lease ¶ ¶ of 3'd amends Changes made Amend- Current ment Lease ¶ ¶ of 3'~ Amends Changes made Amend- Current ment Lease ¶