Dubuque Racing Association - Line of CreditTO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: DRA Line of Credit for Renovation Expenses
DATE: February 23, 2009
Dubuque Greyhound Park & Casino CEO/General Manager Jesus Aviles is requesting
City approval fora $10 million line of credit with American Trust and Savings Bank
serving as the lead bank to fund the Dubuque Greyhound Park & Casino remodeling
project and to replace cash reserves used by the DRA for said construction.
The City's approval would include Assignment of the Lease between the City of
Dubuque and the DRA and authorization for the City Manager, in consultation with City
Attorney Barry Lindahl, to negotiate and execute a Negative Pledge Agreement from the
City of Dubuque.
As this is not yet a binding agreement between the bank and the DRA, and details are
to be finalized, City Council approval would also be contingent on the City Manager, in
consultation with City Attorney Barry Lindahl, giving final approval of the final
agreements. Unless they are not in substantial compliance with the attached credit
facility letter, then City Council approval would be required.
I respectfully request Mayor and City Council approval.
Michael .Van Milligen
MCVM/jh
Attachment
cc: Jesus Aviles, Dubuque Greyhound Park & Casino CEO/General Manager
Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
fiL16UCl1JE IiAClN6 A.SSO[fA7J0~F7
Date: February 20, 2009
~DUBUQU~~
GREYHOUND
PARK ~- °
To: Honorable Mayor Buol and City Council Members
CC: City Manager, Michael Van Milligen
From: Jesus Aviles, CEO/General Manager
Issue: DRA Line of Credit for Renovation expenses
Dubuque Greyhound Park and Casino underwent a major renovation to the facility beginning in
October 2008. The Dubuque Racing Association approved expenditures for this project at a
special board meeting of September 30, 2008. Staff has been working with American Tri.~st and
Savings Bank since that approval to finance this project and to replenish cash reserves used to
pay for the renovation project. Attached is a letter from American Trust and Savings extending a
line of credit.
As stated in the Third Amendment of the Lease Agreement between the City of Dubuque and the
Dubuque Racing Association, I am formally requesting City approval to move forward with the
financing of the renovation project.
If you need additional information, please feel free to contact nxe. Thank you for your assistance
with this matter.
American Tfrust
"° Simply better banking: '°'""
895 Main Street
P.O.Bax 938
Dubuque, Iowa 62004-0938
563.589.0827
Pax 689.0860
trichfer@amerlcantrust.com
www.americantrust.cam
Victoria J. (Tort) Richter
2nd Senior Vice President
Commercial Banking
February 4, 2009
Mr. Jesus Aviles, General Manager
Dubuque Greyhound Park & Casino
P.O.box 3190
Dubuque, IA 52004-3 1 9 0
Dear Jesus:
American Trust & Savings Bank ("Bank") is pleased to provide the following credit facility to the Dubuque
Racing Association ("D1ZA") for the current remodeling of the Dubuque Gxeyhound Park & Casino.
Borrower: Dubuque Racing Association, Ltd.
Lead Arrangez: American Trust & Savings Bank
Administrative Agent: American Trust & Savings Bank
Lenders; American Trust & Savings Bank and a syndicate of financial
institutions and other entities (each a "Lender," and collectively, the
"Lenders"} arranged by the Lead Arranger in consultation with the
Borrower and Administrative Agent
Facility: A closed-end, multiple advance line of credit to be used to complete the
construction for the Dubuque Greyhound Pazk & Casino remodeling
project and to replace cash reserves used by the DRA for said
construction. The maximum loan amount is $10,000,000.
Rate: 5.50 percent, fixed
Payment Dates: Interest on the unpaid principal balance of the Note shall be payable
monthly beginning the first day of the month after the closing date and
the final payment of principal plus accrued interest shall be due
December 1, 2010.
Default Rate: At any time when au event of default has occurred and is continuing
beyond suy cure period, all amounts due ender the Facility shall beaz
interest rate of 18% per annum.
Rate Basis: All per annum rates shall be calculated on the basis of a year of 360
days and the actual number of days elapsed.
American Trust & Savings Bank
lVlr. resus Aviles
February 4, 2009
Page 2 of 3
1Viaturity December 1, 2010
Secur[ty: This credit will be collateralized by a general business security
agreement on substantially ail assets of the Dubuque Greyhound Park
& Casino, an Assignment of Lease bettiveen the City of Dubuque and
the DRA, a Negative Pledge Agreement from the City of Dubuque, and
will becross-eollateralized with pxomissory notes 45868 and 45869
issued by American Trust & Saviuags Bank to the Dubuque Racing
Association, Ltd.
Loan Origination Fee: $25,000, to be paid upon acceptance of this proposal
Prepayment: The Borrower may prepay the credit facility during anytime of the
term of the lean, and will only pay a Prepayment Fee if such
prepayment of the Loan is being financed with proceeds from a loan
issued by a financial.institution o#her than American Ttust & Savings
Bank or an affiliate thereof
ether General Conditions:
The proposed credit facility will be governed by a Laan Agreement behveen the Bank and the DRA dated
June 16, 2004, and amended to include the new credit facility. The terms in said Loan Agreement will
remain in place. Additional conditions include, but are not limited to:
1. The credit facility will be subject to documentation as maybe required by the Bank and its legal
counsel.
2. The DRA will provide the Bank with annual audited financial statements as well as monthly
internal fraancial statements.
3. The DRA will be responsible for expenses related to the preparation and closing of the credit
facility including, but not limited to, filing fees and legal expenses.
American Trust & Savings Bank shall serve as the lead bank for the credit facility. Dubuque Bank & Trust
Company will participate in up to half of this loan. I-Iowever, we will be offering portions of this loan to a
syndicate of financial institutions as pxeviously discussed. By utilizing American Trust & Savings Bank
and Dubuque Bank & Trust Company, we can expedite the approval process, assure efficiencies, and
assure the majority of this credit facility will remain within the Local community. Any additional lenders
will be selected among the Local banks.
Purpose of Letter:
This letter shall not be deemed as evidence of a binding agreement on the part of either the Bank or the
Borrower. Important terms may remain to be negotiated, and even if an agreement is principal should be
reached on the terms of the fmancing at a subsequent dated, neither party to the fmancing shall be legally
bound until definitive loan documents have been signed by the respective parties.
American Trust & Savings Bank
Mx. 3esus Aviles
February 4, 2009
Page 3 of 3
If the foregoing terms are in accordance with what tive discussed, please indicate acceptance on both of the
enclosed originals of this letter, and return one fully signed original. If such acceptance is not received by
us on or before Febxuary 28, 2009, this proposal shall expire. ff the final loan documents are not executed
by December 1, 2009, this proposal shaIl expire.
Sincerely,
~~~~~~
Victoria 7. Richter
2°~ Senior Vice President
Accepted this _ day of b'ebruary 2009.
Dubuque Racing Association, Ltd.
By:
7esus Aviles, General Manager