Hotel Lease Greyhound Park
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MEMORANDUM
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June 28, 2004
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TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Hotel Lease
The City of Dubuque and the Dubuque Racing Association have negotiated a Lease
and Parking Agreement with Dubuque Casino Hotel, LLC to build a new hotel adjacent
to Dubuque Greyhound Park and Casino.
The hotel would be an approximately 111-room Hilton Gardens Hotel with a swimming
pool and an attached major chain restaurant. The hotel would be upscale with an
approximately $12 million project budget. The City is providing no financial assistance.
Dubuque Casino Hotel would lease land from the City for the footprint of the hotel and
the employee parking at a rate of $45,000 an acre per year beginning in July 2005,
based on a $450,000 per acre land value. It is estimated that approximately one acre
would be leased. The lease would be for 40 years, with an appraisal to adjust the lease
payments at 10 years, and every 5 years thereafter. Dubuque Casino Hotel is
responsible for any property taxes.
If the developer adds 100 rooms or more in the first 10 years, the Lease would be
extended for 10 years.
Parking will be provided in a shared Parking Agreement between the hotel and the
casino.
The City owns the hotel at the end of the lease. In today's dollars, the project could
generate about $1.25 million in lease revenues at that time.
I respectfully recommend Mayor and City Council approval of the lease.
Mic{1J¿!£ i~1:\
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
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MEMORANDUM
June 22, 2004
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Hotel Lease
The City of Dubuque and the Dubuque Racing Association have successfully negotiated
a lease with Dubuque Casino Hotel, LLC, to build an approximately 111 room
hotel/restaurant project as part of the Dubuque Greyhound Park and Casino expansion.
I respectfully request that the Mayor and City Council set the proposed lease for a
July 6, 2004 public hearing.
(YLd//( AlL
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
R 77-; `1
Prepared by: Brian J. Kane, Kane, Norby & Reddick, P.C., 2100 Asbury Rd., Ste. 2 Dubuque, IA 52001 563-582-7980
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made and entered into as of the 4/� day of
R=, 2004, by and between the CITY OF DUBUQUE, an Iowa municipal corporation, ("Lessor")
and DUBUQUE CASINO HOTEL, L.L.C., an Iowa limited liability company ("Lessee").
RECITALS
A. Lessor is the owner of that certain real estate described on Exhibit "A" attached
hereto and by this reference made a part hereof, a portion of which Lessor desires to lease to Lessee,
and Lessee desires to lease from Lessor (the "Demised Premises"); and,
B. Lessor desires to lease the Demised Premises for the purpose of Lessee constructing
a certain hotel, restaurant and other improvements thereon ( (hereafter the "Project"); and,
C. For the purpose of authorizing the City's Lease of certain property to DCH for
purposes of the Project, which property is a currently leased to DRA under the Prior Lease, DRA
Joins in this agreement with respect to paragraphs 25, 26, 27, and 28 only; and concurrently with
such agreement, DRA enters into a Parking Use Agreement with the City and DCH for the purpose
of lessening the burdens of the City's duties under the Lease with respect to provision of parking
areas and parking area maintenance for the Project.
D. Lessor and Lessee desire to enter into this Lease in connection with the Project.
Therefore, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree upon the following mutual terms and conditions:
ARTICLE 1
DEMISE AND TERM
1.1 Demise and Term. In consideration of the rents hereinafter reserved and the terms,
covenants, conditions and agreements set forth in this Lease, Lessorhereby leases to Lessee the real
property described on 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
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and ending on the 40-year anniversary of the issuance of the Certificate of Completion (defIDed
below) for the completion of the Phase I Improvements (the "Initial Term") but in no event later than
July 1,2045, su]:¡iect to all of the terms, covenants, conditions and agreements contained herein.
Upon the issuance of a Certificate of Completion for the Phase IT Improvements (as defined in
Section 3.2(B) hereof) within ten (10) years of the date hereof, the Initial Term shall be extended
for an additional ten (10) years in order that the Lease term shall be fifty (50) years from the
issuance of the Certificate of Completion (defined below) for Phase I Improvements but in no event
later than July 1,2055.
1.2 Phase I Improvements. Lessee shall construct the Phase I Improvements in the time
and manner required pursuant to Exhibit "B" attached hereto and by this reference made a part
hereof (the "Project").
1.3 Parking Rights. F or the benefit of the Demised Premises, and su]:¡ject to the approval
of DRA and American Trust and Savings Bank, Lessee shall have the right to use such public
parking area(s) during the Initial Term (and any extension thereof) pursuant to the Parking Use
Agreement in the form attached hereto as Exhibit "C" and by this reference made a part hereof.
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 BaseRent. Until August 3 1, 2005, Lessee shall pay Base Rent in the amount of$1.00
per year. For each year thereafter for the first ten years of this Lease following receipt of such
Certificate of Completion, Lessee shall pay Lessor rent as follows: ($45,000.00 per acre per year x
acres constituting the Demised Premises. Upon issuance of a Certificate of Completion for the
Phase IT Improvements, Lessee shall pay Lessor rent as determined in accordance with the appraisal
procedure set forth below
All such Base Rent shall be payable in twelve (12) equal monthly installments on the fIrSt
day of each month beginning on the 1st day of:hrly September, 2005. Notwithstanding the
foregoing, in the event that Lessee completes the Phase IT Improvements in accordance with Section
3.2(B) hereof, the Base Rent shall increase as provided above effective on the date a Certificate of
Completion (defIDed below) is issued to Lessee and the new Base Rent shall be paid beginning on
the 1st day of the first month following the issuance of the Certificate of Completion.
Forrental payable after the time the flI'St ten (10) years of rent payment expires, Lessor and
Lessee shall have prepared ninety (90) days prior to such time and ninety (90) days prior to every
sixty (60) months anniversary thereafter, an appraisal of the Demised Premises (exclusive of Phase
I Improvements and Phase IT Improvements) by a certified appraiser experienced in appraising
similar types of properties in the Dubuque area mutually selected by Lessor and Lessee. If either
party is dissatisfied with the appraisal or the parties cannot agree on an appraiser, each shall, not
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later than forty-five (45) days prior to the end of the aforesaid ten (10) years and each sixty (60)
months anniversary thereafter, appoint its own appraiser, each of which shall be experienced in
appraising similar types of properties in the Dubuque area and the two appointed by the parties shall
select a third experienced appraiser. The average appraised values of the three appraisers shall be
the appraised value of the Demised Property for the purposes of this Article. The annual rent shall
be ten percent (10%) of the appraised value of the Demised Premises for the succeeding sixty (60)
month period. The Demised Premises shall be appraised as vacant, unimproved ground only without
regard to any buildings or other improvements on the Demised Premises. The annual rent as
determined shall be paid in twelve (12) equal monthly installments.
2.2 Utility Upgrade. Lessee aclmowledges that Lessor intended to upgrade a lift station
that serves the Demised Premises and that construction of the Improvements will cause Lessor to
incur additional costs for the lift station upgrade to serve the Improvements on the Demised
Premises, which additional costs the parties estimate to be $10,000 for increased pump size and
$15,000 for electrical installation. Lessee agrees to pay to Lessor such additional costs but not to
exceed the total of $25,000.
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 fixtures (the "Trade Fixtures") is and shall be the sole and exclusive property of
Lessee during the term of this Lease. Lessor aclmowledges and understands that it shall have no
right, title or interest in or to Lessee's Trade Fixtures during the term of this Lease. Lessor
aclmowledges and agrees that Lessee shall have the right to encumber, sell, or hypothecate Lessee's
Trade Fixtures, to remove them from the Demised Premises, or to otherwise deal with all or any
portion of such Lessee's Trade Fixtures, in Lessee's sole discretion. Upon ten (10) days' prior
written notice to Lessor, Lessor shall execute and deliver to Lessee a certificate in recordable 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.
(A) On delivery of possession of the Demised Premises to Lessee, Lessee shall construct
on the Demised Premises the Phase I Improvements pursuant to Exhibit "B" necessary to complete
the Project (the "Improvements"). Lessor agrees to apply as expeditiously as possible for all
permits, variances and approvals reasonably required by law to develop and construct the
Improvements on the Demised Premises. The Phase I Improvements shall be substantially complete
by no later than:hrly September 1,2005. All Improvements hereafter constructed on the Demised
Premises and all Trade Fixtures located on the Demised Premises are and shall be the property of
Lessee during the term of this Lease and the extension referred to in Par. 1.1 but in no event later
than July 1,2055 and no longer. Su]:¡iect to the payment obligations of Lessee herein, upon any
termination of this Lease, by reason of any cause whatsoever, if the Improvements or any part
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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 thereof then within the Demised Premises and all Trade Fixtures (in the rooms and lobby) shall
be surrendered by Lessee to Lessor (excluding furniture, fixtures, and equipment in the offices). At
the time of surrender, such Trade Fixtures shall be of the same quantity, type and quality as were
located in the rooms and lobby for the operation of the Improvements during the term of this Lease.
No further deed or other instrument shall be necessary to confirm the vesting in Lessor of title to the
Improvements or Trade Fixtures. However, upon any termination of this Lease, Lessee, upon
request of Lessor, shall execute, aclmowledge and deliver to Lessor a quitclaim deed confirming that
all of Lessee's right, title and interest in or to the Improvements or Trade Fixtures has expired, and
that title to the Improvements and Trade Fixtures has vested in Lessor. See Article 21 below.
(B) Phase IT Improvements. Attached hereto is Exhibit "D" and by this reference made
a part hereof is a schedule of the Phase IT Improvements for all purposes herein. Lessee, at its
option, may elect to construct the additional rooms contemplated by Exhibit "D" provided Lessee
provides Lessor thirty (30) days written notice thereof prior to commencing any such construction.
For all purposes hereunder, a Certificate of Completion shall mean such certificate (or any
certification or a similar written statement) by the City of Dubuque, Iowa, providing that any
Improvements hereunder are completed pursuant to applicable City ordinances.
ARTICLE 4
ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
4.1 Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by mortgage, deed
of trust 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
mail or deliver to the Holder, at such address, a duplicate copy of all notices in writing which Lessor
may, from 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 rights of Lessee shall be terminated as provided in this Lease, pay any of the rents due under this
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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 16.2. 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
Lessee agrees to pay as additional rent an amount equal to real estate taxes upon the real estate of
the Demised Premises that become payable (as such taxes come due) 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 lmown 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 rights 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 or otherwise reserved to Lessor hereunder.
Lessee shall at all times have the right 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 right to assess or levy
the same against or collect the same from said Demised Premises or Improvements, shall be disputed
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 right to redeem therefrom expires, whichever
will be the earlier, Lessee shall promptly pay and satisfy such disputed tax; assessment or other
charge as finally determined, together with all expenses, costs and attorneys' fees whatsoever
incurred in connection therewith.
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ARTICLE 6
REPAIRS
Lessee shall at all times during the term of this Lease, at Lessee's 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 structural 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) to make any such alteration, addition, or modification that equals or exceeds
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 (any alteration, addition or modification less than Fifty Thousand and
00/100 Dollars ($50,000.00) in cost shall not require Lessor's consent).
ARTICLE 9
USE OF DEMISED PREMISES
Lessee shall operate the Improvements/Project for the purposes outlined herein and shall not
lmowingly use or allow the Demised Premises or any buildings or Improvements thereon or any
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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.
After the issuance of the Certificate of Completion, Lessee shall not cause, allow or permit
any outdoor storage of any materials, objects or things of any kind, including refuse, trash or
garbage, at any time on the Demised Premises. Notwithstanding the foregoing, refuse storage is
permissible in an accessory storage enclosure if the City Manager determines that the structure is
in character with the principal building and constructed of the same quality permanent materials as
the principal building. The accessory structure shall be within close proximity to the principal
structure. Where the structure exceeds 200 square feet in area, at least 1/3 of the structure's exterior
perimeter shall be landscaped with ornamental trees and shrubs.
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 Lessor, furnish
Lessor with proof of payment of premiums on):
A. Builder's risk insurance, written on the Special Perils Form in an amount equal to one
hundred percent (100%) of the replacement value of Improvements as the same shall exist from time
to time during the construction process; and,
B.
Schedule.
Commercial general liability insurance as set forth in the attached insurance
10.2 Upon completion of construction ofImprovements, Lessee shall maintain, or cause
to be maintained, at its cost and expense (and from time to time at the request of Lessor 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, but 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 Lessor. The term
"replacement value" shall mean the actual replacement cost ofImprovements (excluding foundation
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 Lessor, but not more
frequently than once every three years, and paid for by Lessee.
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B. Commercial general liability insurance as set forth in Lessor's standard insurance
schedule for tenants of city property, which schedule may from time to time be amended by Lessor.
Lessor's current Insurance Schedule is attached hereto.
10.3 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 in possession of the Demised Premises, and that it has (or will have) full right and
authority to enter into this Lease for the full term hereof(subiect to Article 25 below), 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 Lessee will
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 permits with regard to the Demised Premises and its use, occupancy and control of
the Demised Premises.
B. 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, the obtaining thereof being a conditioned precedent to this Lease.
12.2
Environmental Matters.
A. Lessee covenants and agrees that Lessor shall have no responsibility for or liability
arising from any release of a Hazardous Substance which is caused by or results from Lessee's use,
occupancy or control of the Demised Premises, except for Lessor Hazardous Substances (any
Hazardous Substance which leaches or migrates upon the Demised Premises from any property
owned by Lessor). Notwithstanding any other provision of this Lease, Lessee shall not have any
responsibility for any Hazardous Substance which leaches or migrates upon the Demised Premises
from any adjacent property or any release of a Hazardous Substance which is caused by Lessor or
which pre-exists as of the date of this Lease, all of which shall be and remain the liability of Lessor .
B. Lessee covenants and agrees to notify Lessor promptly of any release of Hazardous
Substance in, on or about the Demised Premises of which Lessee has actual knowledge.
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C. Lessee covenants and agrees to take promptly any and all necessary and appropriate
response to address any release of Hazardous Substance for which Lessee is responsible under
Section l2.2A. Such response shall include, without limitation, notification to appropriate
governmental authorities, as may be required by law.
D. Lessee covenants and agrees not to manufacture, treat or dispose of Hazardous
Substances at the Demised Premises or lmowingly allow the manufacture, treatment, or disposal of
Hazardous Substances on the Demised Premises.
E. Lessee shall have the right to perform environmental site assessments of the Demised
Premises to assess the environmental condition of the Demised Premises for the purpose of
constructing and operating (even through an affiliate) a hotel and restaurant. Any results or reports
created by such site assessment shall be the property of Lessee and may be used by Lessee and
L,essor 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.
For the purposes of this Lease, "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 oflowa 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 45 5B, 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. ~690l et seq., (vi)
defined as a "hazardous substance" pursuant to ~ 10 1 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.l 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.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification of Lessee. To the extent allowed by law, Lessor will indemnify and
save harmless Lessee 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 Lessee 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 and
resulting from any act or omission of Lessor or anyone acting by, through, or under Lessor, (b) any
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
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be defended by counsel approved by Lessee, which approval will not be unreasonably withheld.
13.2 Indemnification 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 all other sums not directly attributable 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. Ifless 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
Page 10 of27
continue this Lease in full force and effect or terminate this Lease. If Lessee 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 structural 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 condemnation, 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 after 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.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
This Lease may not be assigned or sublet by Lessee without the prior written consent of
Lessor, which consent shall not be unreasonably withheld, provided said third party assignee or
sublessee agrees in writing 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 observed, 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 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
Page 11 of27
Premises and all persons occupying the Demised Premises and to use all necessary and legal 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
from 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 Lessor 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,
su]:¡ject 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 banlcruptcy, 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. Lessor agrees to execute
and deliver any nondisturbance and attornment agreements reasonably requested by Lessee's
lenders, from time to time, provided such nondisturbance and attornment agreement is consistent
with this section 16.2.
16.3 Lessee's Rights in the Event of Lessor'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 default 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
Page 12 of 27
Whenever and as often as a party shall fail 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 written 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. The 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. Either party, upon giving twenty (20) days' written notice to the other, may
offset amounts due to the other party for any amounts the notifying party pays or incurs hereunder
proper the obligation of the other party to whom such notice is sent.
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, aclmowledge 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 there 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 been 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
Page 13 of 27
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 right 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
rights of Lessor to enforce the payment of any other rent then or thereafter 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, free and clear of alllettings 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 Fixtures, personal property and other belongings of Lessee or of any Lessee
or other occupant of space in the Demised Premises (excluding furniture, fIXtures, and equipment
in room or the lobby) 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. See Article 3 above.
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 names 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 Base 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 mail,
registered and postage prepaid, and by facsimile addressed as follows:
Page 14 of27
To Lessor:
City of Dubuque, Iowa
Attn: Mr. Michael C. Van Milligen
City Hall
13th St. & Central Ave.
Dubuque, IA 52001-4864
To Lessee:
Dubuque Casino Hotel, LLC
Artn: Mr. Wayne A. Briggs
137 Main St., Ste. 400
Dubuque, IA 52001
To DRA:
Dubuque Racing Association, L TD
Attn: Mr. Bruce Wentworth
1855 Greyhound Park Rd.
Dubuque, IA 52001;
23.2 The 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 written notice given by the
party as above provided.
ARTICLE 24
MISCELLANEOUS
24.1
Time of the 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 ofIowa.
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 writing
signed by each party or an authorized representative of each party.
24.5 Parties Bound. 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 Majeure. In the event that either party 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,
Page 15 of27
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 Transient Boat Docking. During the Initial Term of this Lease, and as soon as
reasonably possible and practicable, City agrees to investigate with Lessee the feasibility of
providing transient boat docking facilities, at the expense of Lessee, for the benefit of the Project.
ARTICLE 25
DUBUQUE RACING ASSOCIATION, LTD. ("DRA")
The Dubuque Racing Association, LTD., an Iowa not for corporation ("DRA"), by and
through its authorized representatives, agrees that the City may Lease the Demised Premises to
Lessee, notwithstanding that certain Lease wherein the City of Dubuque, Iowa, a municipal
corporation, is the Lessor, and DRA is the Lessee, dated March 31,2004 (the "Prior Lease"). Lessor
and DRA agree to amend the Prior Lease at or prior to the execution hereof or within a reasonable
time thereafter.
ARTICLE 26
APPROVAL
This Lease shall not become effective until the prior written approval or consent ofDRA,
the Iowa Racing and Gaming Commission and American Trust & Savings Bank is received. If all
of the foregoing approvals are not received by July 15,2004, then this Lease shall be null and void
and of no further force or effect.
ARTICLE 27
RIGHTS OF FIRST REFUSAL
Lessee shall have the preemptive right during the Initial Term and the extension refered to
in Par. 1.1 to purchase the Demised Premises and the parking area described in the Parking Use
Agreement on the same terms and conditions as those of any bona fide offer received by and
acceptable to Lessor. Before making any sale or any agreement to sell, Lessor shall notify Lessee
in writing of the terms and conditions of the offer. Lessee, within sixty (60) days after receipt of
such notice, may exercise this preemptive right by written notice to Lessor. Failure of Lessee to
exercise this preemptive right on one or more occasions shall not affect Lessee's right to exercise
it on any subsequent occasion. Any sale or transfer of the Demised Premises, or any part thereof,
or of any larger tract ofland of which the Demised Premises may be a part, shall be expressly made
subject to all of the terms, covenants and conditions of this Lease.
DRA shall have the preemptive right during the Initial Term or any extension thereof to
Page 16 of 27
purchase the Improvements on the same terms and conditions as those of any bona fide offer
received by and acceptable to Lessee. Before making any sale or any agreement to sell, Lessee shall
notify Lessor and DRA in writing ofthe terms and conditions of the offer. DRA, within sixty (60)
days after receipt of such notice, may exercise this preemptive right by written notice to Lessee.
Failure ofDRA to exercise this preemptive right on one or more occasions shall not affect DRA's
right to exercise it on any subsequent occasion. Any sale or transfer of the Improvements shall be
expressly made subject to all of the terms, covenants and conditions of this Lease. In the event DRA
purchases the Improvements, Lessor shall lease the Demised Premises to DRA for the remainder of
the Initial Term or any extension thereof, subject to all of the terms, covenants and conditions of this
Lease.
ARTICLE 28
JOINT MARKETING
Any joint marketing or otherioint ventures or opportunities for business relationships by and
between DRA and Lessee with regard to the hotel and restaurant contemplated herein and the
gaming and related facilities operated by DRA shall be the subject of separate agreements, from time
to time, by and between Lessee and DRA.
DRA agrees that, during the entire time this Lease remains in full force and effect, Lessee
shall be the exclusive provider of any hotel, motel or similar facility on any part of the entire real
estate described on Exhibit ""A"" attached hereto and by this reference made a part hereof
(consisting of 43.73 acres, more or less), as well as the exclusive provider of any franchised or
otherwise casual fine dining restaurant on the Demised Premises. DRA further agrees thatDRA shall
not, without the consent ofDCH, operate or permit another to operate any franchised dining facility
on any part of the entire real estate described on Exhibit ""A"" attached hereto, other than a
franchised dining facility operated by DCH on the Demised Premises. Other than as provided in this
paragraph, nothing in this Lease shall, in any way, limit the operations of DRA adjacent to the
Demised Premises, including but not limited to the right or ability ofDRA to conduct its own (non-
franchised) food and/or beverage operations on or adjacent to DRA's facilities.
ARTICLE 29
FINANCING CONDITION
This Lease is subject to Lessee obtaining financing from or through a local financial
institution on prevailing terms for no less than eighty percent (80%) of the cost of the Project on or
before June 22, 2004.
Page 17 of 27
CITY
By its
By its
DUBUQUE CASINO HOTEL, L.L.C.,
L se n
By itsts aIL 'zed re sentative
DUBUQUE RACING ASSOCIATION, LTD,
("DRA") For purposes of Articles 25, 26, 27
and 28 only
By its authorized representative
Page 18 of 27
EXHIBIT "A"
LEGAL DESCRIPTION OF DEMISED PREMISES
That portion of the following-described real estate consisting of approximately one acre
depicted on the drawing attached to this Exhibit "A" and by this reference made a part hereof:
A parcel ofland containing 43.73 acres, more or less, located on Chaplain Schmitt Memorial
Island, lying immediately north of the Iowa-Wisconsin Bridge as set forth on the plat attached hereto
and made a part hereof and su]:¡ject to a utility and roadway easement located on and about the
southerly property line, a roadway easement located on and about the easterly property line, and a
roadway easement on and about the westerly property line. [Exact legal description to be supplied
later.]
Lessor and Lessee agree to amend this Exhibit A upon determination of the exact location
and extent of the Improvements and determination of the legal description. Lessor and Lessee intend
that the Demised Premises shall initially consist of approximately one acre upon which the Phase
I Improvements shall be constructed and that the Demised Premises shall be enlarged by the area
necessary for the construction of the Phase IT Improvements, if so constructed.
Page 19 of27
SCHEDULE ATTACHED TO EXIllBIT "A" [Need exhibit before city council action]
[Drawing of footprint of Demised Premises upon which hotel and restaurant are to be
constructed and Lessee's employee parking area.]
[This Schedule shall show the planned/approximate area of the Phase I and Phase II parking
areas.]
Page 20 of 27
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EXHIBIT "B"
PHASE I IMPROVEMENTS [Need exhibit before city council action]
Lessee shall construct on the Demised Premises at Lessee's option either a Sheraton Four
Points or Hilton Gardens Hotel, and a casual fIDe dining restaurant.
(Exact description of Phase I Improvements to be provided later].
Lessee shall commence construction of the Phase I Improvements by no later than August
1, 2004, and the Phase I Improvements shall be substantially complete by no later than July 1, 2005.
Plans and specifications with respect to the Improvements and the construction of the
Improvements shall be in substantial conformity with all applicable State and local laws and
regulations. Lessee shall submit to Lessor, for approval by Lessor, plans, drawings, specifications,
and related documents with respect to the Improvements to be constructed by Lessee on the Demised
Premises. All work with respect to the Improvements shall be in substantial conformity with the
construction plans approved by Lessor and shall be coordinated with any Lessor improvements in
the general vicinity of the Demised Premises. The Improvements shall include an indoor pool and
hot tub.
Lessee shall use its best efforts to maintain its affiliation with rSheraton Four Points or Hilton
Gardens Hotell during the Initial Term and the extension referred to in Par. 1.1. Lessor shall have
the right in its sole discretion to approve any change in such affiliation and no such change or
attempted change by Lessee shall be effective without Lessor's prior written approval.
Page 21 of 27
EXHIBIT "C"
PARKING USE AGREEMENT - SEE ATTACHED
Page 22 of27
EXHIBIT "D"
PHASE n IMPROVEMENTS [Need exhibit before city council action]
[Additional 100 rooms.]
[Exact specifications for these additional 100 rooms to be provided later.]
Plans and specifications with respect to the Improvements and the construction of the Improvements
shall be in substantial conformity with all applicable State and local laws and regulations. Lessee
shall submit to Lessor, for approval by Lessor, plans, drawings, specifications, and related
documents with respect to the Improvements to be constructed by Lessee on the Demised Premises.
All work with respect to the Improvements shall be in substantial conformity with the construction
plans approved by Lessor and shall be coordinated with any Lessor improvements in the general
vicinity of the Demised Premises.
Page 23 of 27
INSURANCE SCHEDULE
INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY
OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO THE CITY OF DUBUQUE
1. All policies of insurance required hereunder shall be with an insurer authorized to
do business in Iowa. All insurers shall have a rating of A of better in the current AM. Best Rating
Guide.
2. All policies of insurance shall be endorsed to provide a thirty (30) day advance notice
of cancellation to the City of Dubuque if cancellation is prior to the expiration date. This
endorsement supersedes the standard cancellation statement on the Certificate of Insurance.
3. Lessee shall furnish a Certificate of Insurance to the City of Dubuque, Iowa for the
coverage required in Paragraph 6 below. Such certificates shall include copies of the following
policy endorsements:
a)
b)
c)
d)
e)
Thirty day notice of cancellation to the City of Dubuque.
Commercial General Liability policy is primary and non-contributing.
Commercial General Liability additional insured endorsement.
Governmental Immunity Endorsements.
Waiver of recovery under workers compensation.
4. Each certificate shall be submitted to the Finance Department of the City of
Dubuque.
5. Failure to provide minimum coverage shall not be deemed a waiver of these
requirements by the City of Dubuque. Failure to obtain or maintain the required insurance
shall be considered a material breach of this agreement.
6. Lessee shall be required to carry the following minimum coverage/limits or greater
if required by law or other legal agreement:
a)
COMMERCIAL GENERAL LIABILITY
General Aggregate Limit
Products-Completed Operations Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (anyone occurrence)
Medical Payments
$2,000,000
$1,000,000
$1,000,000
$1,000,000
$ 50,000
$ 5,000
This coverage shall be written on an occurrence, not claims made, form per location. All
deviations or exclusions from the standard ISO commercial general liability form CG 0001 or
Page 24 of 27
Business owners form BP 0002 shall be clearly identified.
Governmental Immunity Endorsement identical or equivalent to form attached.
An additional insured endorsement identical or equivalent to ISO Form CG 2026 or CG 20 11
and include as additional insureds: "The City of Dubuque, including all its elected and appointed
officials, all its employees and volunteers, all its boards, commissions and/or authorities and their
board members, employees, and volunteers."
b)
WORKERS' COMPENSATION & EMPLOYERS LIABILITY
Statutory for Coverage A
Employers Liability:
$100,000 each accident
$100,000 each employee-disease
$500,000 policy limit-disease
Policy shall include an endorsement waiving right of recovery against City of Dubuque.
c) UMBRELLAlEXCESS LIABILITY $ 4,000,000
LIQUOR OR DRAM SHOP LIABILITY $ 1,000,000
Coverage to be determined on a case-by-case basis by Finance Director.
Page 25 of27
POLICY NUMBER
COMMERCIAL
GENERAL LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED - DESIGNATED PERSON OR
ORGANIZA nON
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person Or Organization:
The City of Dubuque, including all its elected and appointed officials, all its employees and
volunteers, all its boards, commissions and/or authorities and their board members, employees, and
volunteers.
(If no entry appears above, information required to complete this endorsement will be shown in the
Declarations as applicable to this endorsement.)
WHO IS AN INSURED (Section IT) is amended to include as an insured the person or organization
shown in the Schedule as an insured but only with respect to liability arising out of your operations
or premises owned by or rented to you.
Copyright. Insurance Services Office. Inc. 1994
CG 20 261185
Page 26 of27
CITY OF DUBUQUE, IOWA
GOVERNMENTAL IMMUNITIES ENDORSEMENT
1.
Nonwaiver of Governmental Immunity. The insurance carrier expressly agrees and states
that the purchase of this policy and the including of the City of Dubuque, Iowa as an
Additional Insured does not waive any of the defenses of governmental immunity available
to the City of Dubuque, Iowa under Code oflowa Section 670.4 as it is now exists and as
it may be amended from time to time.
2.
Claims Coverage. The insurance carrier further agrees that this policy of insurance shall
cover only those claims not suJ:¡ject to the defense of governmental immunity under the Code
of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those
claims not suJ:¡ject to Code of Iowa Section 670.4 shall be covered by the terms and
conditions of this insurance policy.
3.
Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for
asserting any defense of governmental immunity, and may do so at any time and shall do so
upon the timely written request of the insurance carrier.
4.
Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and
the insurance carrier shall not deny any of the rights and benefits accruing to the City of
Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a
court of competent jurisdiction has ruled in favor of the defense(s) of governmental
immunity asserted by the City of Dubuque, Iowa.
No Other Change in Policy. The above preservation of governmental immunities shall not
otherwise change or alter the coverage available under the policy.
F,\ WPDOCS\MissylDOCSlCily of Dubuque . DBQ Casino Hole¡ Lease Agreement BJK Floa!. wpd
Page 27 of27
'.,
Prepared by: Brian J. Kane, Kane, Norby & Reddick, P.C., 2100 Asbury Rd., Ste. 2 Dubuque, IA 52001 563-582-7980
PAIDaNG USE AGREEMENT
THIS PARKING USE AGREEMENT ("Agreement") is made and entered into effective the
- day of June 2004, by and between the DUBUQUE RACING ASSOCIATION, L TD, an Iowa
nonprofit corporation ("DRA"), and DUBUQUE CASINO HOTEL, LL.C., an Iowa limited liability
company ("DCH") and The City of Dubuque, an Iowa municipal corporation ("CITY").
RECITALS
A. CITY and DRA entered into that certain lease dated March 31, 2004 with regard to
certain real estate (described on Exhibit "A" attached hereto and by this reference made a part
hereof), (the "Prior Lease");
B. CITY and DCH are parties to a lease dated June -' 2004 (the "Lease") located
upon real estate formerly leased by DRA pursuant to the Prior Lease, upon which DCH shall
develop and construct a hotel, restaurant, and other improvement (the "Project"); and,
C. For the purpose oflessening the burden of the City's duties with respect to providing
parking areas and parking area maintenance for the Project pursuant to the City-DCH Lease, DRA
agrees to enter into this Parking Use Agreement with the City and DCH.
D.
The parties have entered into this Agreement to provide for parking for the Project.
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby aclmowledged, the parties agree upon the following mutual terms and conditions:
1. Term of Agreement. 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 the Lease), and shall terminate upon the expiration or termination of the
Lease. This Agreement shall be transferable, without further consent, with the Lease.
2. Parking and Legal Description, During the Term of this Agreement, the DRA shall
provide to DCH sufficient space on the real estate leased by DRA under the Prior Lease such that
DCH can construct a surface lot for vehicular parking, sidewalks, landscaping, and lighting for such
parking area, in the areas designated Phase I parking and legally described on Exhibit A attached
hereto (the "Phase I Parking Area") for the non-exclusive use by DCH, and its guests, vendors,
suppliers and employees. The Phase I Parking Area shall include pedestrian access and vehicular
access to the Phase I Parking Area from, among other things, the Project. DRA and DCH agree that
the Phase I Parking Area shall include a minimum of 400 parking spaces for the benefit of the Phase
I Improvements (as defined in the Lease). DRA shall pay to DCH the fIrst $220,000,00 in cost
related to construction ofthe Phase I Parking Area. Such payment shall be made in a manner as to
allow the funds to be available to DCH when DCH is required to pay its contractors related to such
construction. In the event that the DCH constructs the Phase II Improvements (as defined in the
Lease), DRA shall provide sufficient space on the real estate leased by DRA under the Prior Lease
such that DCH can construct a surface lot for vehicular parking in the areas designated Phase II
parking or as described on Exhibit A (the "Phase II Parking Area") for the non-exclusive use by
DCH and its guests, vendors, suppliers and employees. The Phase IT Parking Area shall include
pedestrian access and vehicular access to the Phase II Parking Area from, among other things, the
Project. DRA and DCH agree that the Phase II Parking Area shall include a minimum of an
additional 100 parking spaces for the Phase II Improvements (a minimum of 500 parking spaces
combined for both Phase I and Phase IT projects), DCH shall be responsible for all costs associated
with construction of the Phase II Parking Area. For purposes of this Agreement, Phase I Parking
Area and Phase II Parking Area shall collectively be referred to as the "Parking Area" The parties
shall mutually agree to the specifications of construction of the Parking Area.
During the term ofthe Prior Lease or any extension thereof, DRA shall be responsible for
all routine day to day custodial maintenance of the Parking Area during the Term ofthis Agreement,
including, without limitation, lighting, sweeping, trash collection, landscape trimming, snow
removal and clearing of ice from the Parking Area. DRA shall be responsible, at no cost to DCH,
for the replacement, repair and other maintenance associated with the Parking Area, including,
without limitation, the repair, replacement and maintenance of lighting, surface potholes, surface
reconstruction and restoration, landscape replacements, parking space striping and re-caulking of
the parking area. DCH, and its guests, vendors, suppliers and employees, shall at all times have
reasonable access to the Parking Area and D RA and! or CITY shall keep the Parking Area reasonably
clear at all times in order that DCH, and its guests, vendors, suppliers and employees, may use the
Parking Area. DRA 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, DRA
shall be responsible for security in the Parking Area, DRA and DCH shall meet to discuss and agree
on the layout ofthe Parking Area. The Parking Area and all streets leading to the Parking Area shall
be constructed in a manner to allow heavy truck access. However, in the event of a termination of
the Prior Lease for any reason, DCH shall assume and perform for all of DRA's duties and
responsibilities as set forth in this paragraph.
3. Pedestrian IngressÆgress. DRA shall provide a reasonably direct and convenient
means of public pedestrian 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 applicable at the time the Parking Area
is constructed including, but not limited to, the Americans with Disabilities Act.
4.
Outdoor Storage Prohibited. DCH shall not cause, allow or permit any outdoor
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storage of any materials, objects or things of any kind, including refuse, trash or garbage, at any time
on the Demised Premises. Notwithstanding the foregoing, refuse storage is permissible in an
accessory storage enclosure if the City Manager determines that the structure is in character with
the principal building and constructed of the same quality permanent materials as the principal
building. The accessory structure shall be within close proximity to the principal structure. Where
the structure exceeds 200 square feet in area, at least 1/3 of the structures exterior perimeter shall
be landscaped with ornamental trees and shrubs.
5. Vehicular IngressÆgress. DRA 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
vehicles, 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, DRA shall be responsible for cost,
maintenance, and repair of all non-public streets at no cost to DCH, for all non-public streets,
landscaping and lighting for the Parking Area, such non-public streets, landscaping and lighting
shall be consistent with the character of the surrounding area.
6. Hold Over Vehicles. Any unauthorized vehicles using the Parking Area may be
removed by DRA at any time by any lawful means.
7. Rental. DCH shall pay $5,000.00 per year to DRA as of the commencement date and
each year annually hereunder for the use of the Parking Area pursuant to this Agreement. The
parties agree that full and adequate consideration for the obligations undertaken by DRA pursuant
to this Agreement has been provided by the obligations undertaken by DCH as Lessee pursuant to
the Lease.
8. RelationshiD Between Parties. It is mutually understood and agreed that nothing in
this Agreement shall be construed as establishing a relationship oflessor/lessee, principal/agent or
co-partners between DRA and DCH and CITY,
9. ReciDrocal Covenants. DCH covenants and agrees that the DRA and CITY shall
have no responsibility for, or liability arising from, any release of Hazardous Substances (as defined
in the Lease) on or under the Parking Area, which is caused by DCH, or its guests, vendors,
suppliers, or employees. CITY agrees that DCH shall not have any responsibility for any Hazardous
Substances existing or found on or under the Parking Area (except for Hazardous Substances
deposited by DCH or its agents or assigns). There shall be a rebuttable presumption that any
Hazardous Substances found on or under the Parking Area were not deposited by DCH, Except for
Hazardous Substances released or deposited by DCH or its agents or assigns on the Parking Area,
CITY shall retain any legal responsibility or liability, subject to available defenses, CITY may have
under law 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
Hazardous Substances on or affecting the Parking Area as ordered by a state or federal agency,
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subject 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 CITY or to require CITY to
absorb any duties, responsibilities or liabilities that it does not already have for Hazardous
Substances existing, located or found on or under the Parking Area. To the fullest extent allowed
by law, CITY agrees to indemnify DCH for reasonable costs and expenses associated with
responding to any legally enforceable order regarding Hazardous Substances from any governmental
agency or court with proper jurisdiction to the extent that CITY, after DCH has given reasonable
notice of the governmental order to CITY, does not timely and reasonably respond to said inquiry
or order and if CITY allows full access to the Parking Area as necessary, as provided herein. 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 responses. However,
CITY agrees to indemnify DCH for any penalties and fines DCH incurs as a result of any such
appeal or negotiation. CITY shall minimize any disruption and will not materially or unreasonably
restrict or interfere with the use of the Parking Area by DCH or its guests, vendors, suppliers or
employees. In the event CITY restricts or interferes with the use of any part of the Parking Area,
CITY shall provide DCH, 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. Right of First Refusal. IfDRA desires to sell, lease, develop, assign or otherwise
transfer (collectively referred to herein as a "Transfer") all or any part of the Parking Area and/or
any property to be used for Phase IT Improvements (as defined in the Lease) during the term of this
agreement, DCH shall have an option and right of first refusal to purchase or lease such property,
as the case may be, or any part thereof to be transferred, as provided in this Section 10. IfDRA has
received a bona fide offer to purchase or lease such property as described in this Section 10 from
a third party which DRA desires to accept, DRA shall deliver to DCH a copy of such offer
specifying the name and address of the prospective transferee, the portion of the property hereunder,
as the case may be, to be transferred, the proposed purchase price or lease payment and all other
important terms of the proposed Transfer, and DRA shall offer to sell, transfer or lease such
property, as the case may be, to DCH on the exact terms contained in such bona fide offer. DCH
shall, within sixty (60) days afterreceipt ofa copy of such bona fide offer, by written notice to DRA,
elect either to: (a) exercise its rights of first refusal to purchase or lease, as the case may be; or (b)
waive its right offirst refusal to purchase or lease pursuant to such notice with regard to the property
covered by this Section 10 proposed to be transferred. If DCH exercises its right of first refusal,
DRA shall transfer or lease, as the case may be, such property to DCH within ninety (90) days of
the exercise by DCH of this right of first refusal. If DCH waives its right of first refusal in the
manner set forth above, DRA shall have the right, for a period of one (1) year after the date of
DCH's waiver, to consummate the Transfer upon terms and conditions exactly the same as and no
less favorable to DRA than those contained in the bona fide third-party offer. Provided,
notwithstanding any waiver by DCH of its right of first refusal, the Transfer of the Property to any
third party shall be subject to the terms of this Agreement. If a proposed Transfer is not
consummated within the aforementioned one (1) year period following waiver by DCH, the Property
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covered by this Section 10, as the case may be, shall not thereafter be released from the effect of this
Section 10.
11. Remedies. Except as otherwise 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 within 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 perforinance by the party in
default or breach of its obligations. Notwithstanding anything herein to the contrary, either party
may, after the above 30-dayperiod, cure the default of the other party and seek recovery of the cost
for such cure from the other party. The prevailing party in any actions brought under this paragraph
shall be entitled to recover reasonable attorneys fees and court costs and interest on unpaid sums at
the rate of ten percent per annum from the date due.
12. Notices. A notice, demand or other communication under this Agreement by any
party to the other party(ies) 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 ofDRA, is addressed to Dubuque Racing Association, LTD, Attn: Mr.
Bruce Wentworth, 1855 Greyhound Park Rd., Dubuque, IA 52001;
(b)
In the case ofDCH, is addressed to Dubuque Casino Hotel, LLC, Attn: Mr. Wayne
A. Briggs, 137 Main St., Ste. 400, Dubuque, IA 52001;
(c)
In the case of CITY, is addressed to City of Dubuque, Iowa, Attn: Mr. Michael C.
Van Milligen, 13th St. & Central Ave" Dubuque, IA 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. Governing Law, !tis agreedthatthis Agreement shall be governed by, construed and
enforced in accordance with the laws of the State ofIowa.
14. Amendments. Any amendment or modification ofthis 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 run with the Lease between
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CITY and DCH, and (ii) shall be transferable with the Lease, and (iii) shall remain in effect for the
length of the Lease (as defined therein) and the extension referred to in Par. 1.1 of the Lease. This
Agreement shall be binding on and shall inure to the benefit of the parties and their respective
successors in interest and assigns.
16. City Bound Upon Termination of Prior Lease. In the event the Prior Lease
terminates for any reason, prior to the end of the Term (or any extensions or renewals) provided
herein, CITY agrees that, except for the maintenance obligations described in Par. 2, it will continue
to be bound by the terms of this Parking Use Agreement and shall succeed to the rights and
obligations of DRA herein. In the event that upon termination of the Prior Lease, City enters into
a subsequent lease of Dubuque Greyhound Park & Casino, City shall require that the lessee in such
lease shall be responsible for the maintenance. obligations described in Par. 2 for the term of such
lease.
17. Limitation on City's Financial Obligations. Nothwithstanding any other provision
in this Agreement, the City shall have no fInancial obligation of any kind to DCH for any
improvements to the Demised Premises, the parking areas or otherwise.
18. Financing: Condition. This Agreement is subject to DCH obtaining financing from
or through a local fInancial institution on prevailing terms for no less than eighty percent (80%) of
the cost of the Project (as depicted in the Lease).
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
effective the day first above written.
DUBUQUE RACING ASSOCIATION, L TD
By its authorized representative
DUBUQUE CASINO HOTEL, LLC.
By its authorized representative
CITY OF DUBUQUE, IOWA
By its Mayor
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CITY OF DUBUQUE, IOWA
By its City Clerk
[NOTARY BLOCKS TO BE ADDED ON PARKING USE AGREEMENT]
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EXHIBIT A
PARKING AREAS
See attached.
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F:IWPDOCS\MissyIDOCSIDBQ !toeing Assn - DBQ e"ino Hotel P",king Use Ag=mcnt BJK Final.wpd
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Brian 1. Kane
Gary K. Norby
Les V. Reddick*
D. Flint Drake**
Brad 1. Heying
Todd L. Stevenson*
MaryBeth Pfeiler Fleming
Kevin T. Deeny
John D. Freund
KANE, NORBY & REDDICK, P.C.
ATTORNEYS
2100 ASBURY ROAD, SUITE 2
DUBUQUE, IA 52001-3069
Of Counsel:
Louis P. Pfeiler
All admitted in Iowa
* Also admitted in Illinois
**Also admitted in Wisconsin
Phone: (563) 582-7980
Facsimile: (563) 582-5312
E-mail: bkane@kanenorbylaw.com
June 23, 2004
Barry A. Lindahl, Esq,
Corporation Counsel
300 Main St., Ste, 330
Harbor View Place
Dubuque, IA 52001
Attorney Steve Krumpe
O'Connor & Thomas, p,c.
700 Locust St., Ste. 200
Dubuque, IA 52001
RE: DUBUQUE CASINO HOTEL, L.L.C./CITY OF DUBUQUE/
DUBUQUE RACING ASSOCIATION
Gentlemen:
Enclosed please find a copy ofthe most recent versions ofthe Lease Agreement and Parking
Use Agreement with regard to the above matter.
In the meantime, please do not hesitate to contact us directly should you have any questions.
Thank you.
Best regards,
DDICK, P.C.
By
BJK:mrk
Enclosures
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J-.
Prepared by: Brian J. Kane, Kane, Norby & Reddick, P.C., 2100 Asbury Rd., Ste. 2 Dubuque, IA 52001563-582-7980
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made and entered into as of the day of
June, 2004, by and between the CITY OF DUBUQUE, an Iowa municipal corporation, ("Lessor")
and DUBUQUE CASINO HOTEL, LLC., an Iowa limited liability company ("Lessee"),
RECITALS
A. Lessor is the owner of that certain real estate described on Exhibit "A" attached
hereto and by this reference made a part hereof, a portion of which Lessor desires to lease to Lessee,
and Lessee desires to lease from Lessor (the "Demised Premises"); and,
B. Lessor desires to lease the Demised Premises for the purpose of Lessee constructing
a certain hotel, restaurant and other improvements thereon ( (hereafter the "Project"); and,
C. For the purpose of authorizing the City's Lease of certain property to DCH for
purposes of the Project, which property is a currently leased to DRA under the Prior Lease, DRA
joins in this agreement with respect to paragraphs 25, 26, 27, and 28 only; and concurrently with
such agreement, DRA enters into a Parking Use Agreement with the City and DCH for the purpose
of lessening the burdens of the City's duties under the Lease with respect to provision of parking
areas and parking area maintenance for the Project.
D.
Lessor and Lessee desire to enter into this Lease in connection with the Project.
Therefore, for good and valuable consideration, the receipt and sufficiency of which is
hereby aclmowledged, the parties agree upon the following mutual terms and conditions:
ARTICLE 1
DEMISE AND TERM
1.1 Demise and Term. In consideration of the rents hereinafter reserved and the terms,
covenants, conditions and agreements set forth in this Lease, Lessor hereby leases to Lessee the real
property described on 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 ofthe date of this Lease
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and ending on the 40-year anniversary of the issuance of the Certificate of Completion (defined
below) for the completion ofthe Phase IImprovements (the "Initial Term") but in no event later than
July 1,2045, subject to all of the terms, covenants, conditions and agreements contained herein.
Upon the issuance of a Certificate of Completion for the Phase II Improvements (as defined in
Section 3.2(B) hereof) within ten (10) years of the date hereof, the Initial Term shall be extended
for an additional ten (10) years in order that the Lease term shall be fifty (50) years from the
issuance of the Certificate of Completion (defined below) for Phase I Improvements but in no event
later than July 1,2055.
1.2 Phase I Improvements. Lessee shall construct the Phase I Improvements in the time
and manner required pursuant to Exhibit "B" attached hereto and by this reference made a part
hereof (the "Project").
1.3 Parking Rights. For the benefit of the Demised Premises, and subject to the approval
of DRA and American Trust and Savings Bank, Lessee shall have the right to use such public
parking area(s) during the Initial Term (and any extension thereof) pursuant to the Parking Use
Agreement in the form attached hereto as Exhibit "C" and by this reference made a part hereof.
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 August 3 1, 2005, Lessee shall pay Base Rent in the amount of $ 1.00
per year. For each year thereafter for the first ten years of this Lease following receipt of such
Certificate of Completion, Lessee shall pay Lessor rent as follows: ($45,000.00 per acre per year x
acres constituting the Demised Premises. Upon issuance of a Certificate of Completion for the
Phase II Improvements, Lessee shall pay Lessor rent as determined in accordance with the appraisal
procedure set forth below
All such Base Rent shall be payable in twelve (12) equal monthly installments on the first
day of each month beginning on the 1st day of:hrly September, 2005. Notwithstanding the
foregoing, in the event that Lessee completes the Phase II Improvements in accordance with Section
3,2(B) hereof, the Base Rent shall increase as provided above effective on the date a Certificate of
Completion (defined below) is issued to Lessee and the new Base Rent shall be paid beginning on
the 1 st day of the first month following the issuance of the Certificate of Completion.
F or rental payable after the time the fIrst ten (10) years of rent payment expires, Lessor and
Lessee shall have prepared ninety (90) days prior to such time and ninety (90) days prior to every
sixty (60) months anniversary thereafter, an appraisal of the Demised Premises (exclusive of Phase
I Improvements and Phase II Improvements) by a certified appraiser experienced in appraising
similar types of properties in the Dubuque area mutually selected by Lessor and Lessee. If either
party is dissatisfied with the appraisal or the parties cannot agree on an appraiser, each shall, not
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later than forty-five (45) days prior to the end of the aforesaid ten (10) years and each sixty (60)
months anniversary thereafter, appoint its own appraiser, each of which shall be experienced in
appraising similar types of properties in the Dubuque area and the two appointed by the parties shall
select a third experienced appraiser, The average appraised values of the three appraisers shall be
the appraised value of the Demised Property for the purposes of this Article, The annual rent shall
be ten percent (10%) ofthe appraised value of the Demised Premises for the succeeding sixty (60)
month period. The Demised Premises shall be appraised as vacant, unimproved ground only without
regard to any buildings or other improvements on the Demised Premises. The annual rent as
determined shall be paid in twelve (12) equal monthly installments.
2.2 Utility Upgrade. Lessee aclmowledges that Lessor intended to upgrade a lift station
that serves the Demised Premises and that construction of the Improvements will cause Lessor to
incur additional costs for the lift station upgrade to serve the Improvements on the Demised
Premises, which additional costs the parties estimate to be $10,000 for increased pump size and
$15,000 for electrical installation. Lessee agrees to pay to Lessor such additional costs but not to
exceed the total of$25,OOO.
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 fixtures (the "Trade Fixtures") is and shall be the sole and exclusive property of
Lessee during the term of this Lease. Lessor aclmowledges and understands that it shall have no
right, title or interest in or to Lessee's Trade Fixtures during the term of this Lease. Lessor
aclmowledges and agrees that Lessee shall have the right to encumber, sell, or hypothecate Lessee's
Trade Fixtures, to remove them from the Demised Premises, or to otherwise deal with all or any
portion of such Lessee's Trade Fixtures, in Lessee's sole discretion. Upon ten (10) days' prior
written notice to Lessor, Lessor shall execute and deliver to Lessee a certificate in recordable 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.
(A) On delivery of possession of the Demised Premises to Lessee, Lessee shall construct
on the Demised Premises the Phase I Improvements pursuant to Exhibit "B" necessary to complete
the Project (the "Improvements"). Lessor agrees to apply as expeditiously as possible for all
permits, variances and approvals reasonably required by law to develop and construct the
Improvements on the Demised Premises. The Phase I Improvements shall be substantially complete
by no later than:hrly September 1,2005. All Improvements hereafter constructed on the Demised
Premises and all Trade Fixtures located on the Demised Premises are and shall be the property of
Lessee during the term ofthis Lease and the extension referred to in Par. 1.1 but in no event later
than July 1, 2055 and no longer, Subject to the payment obligations of Lessee herein, upon any
termination of this Lease, by reason of any cause whatsoever, if the Improvements or any part
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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 thereofthen within the Demised Premises and all Trade Fixtures (in the rooms and lobby) shall
be surrendered by Lessee to Lessor (excluding furniture, fixtures, and equipment in the offices). At
the time of surrender, such Trade Fixtures shall be of the same quantity, type and quality as were
located in the rooms and lobby for the operation of the Improvements during the term of this Lease.
No further deed or other instrument shall be necessary to confirm the vesting in Lessor of title to the
Improvements or Trade Fixtures. However, upon any termination of this Lease, Lessee, upon
request of Lessor, shall execute, aclmowledge and deliver to Lessor a quitclaim deed confirming that
all of Lessee's right, title and interest in or to the Improvements or Trade Fixtures has expired, and
that title to the Improvements and Trade Fixtures has vested in Lessor. See Article 21 below.
(B) Phase II Improvements. Attached hereto is Exhibit "D" and by this reference made
a part hereof is a schedule of the Phase II Improvements for all purposes herein. Lessee, at its
option, may elect to construct the additional rooms contemplated by Exhibit "D" provided Lessee
provides Lessor thirty (30) days written notice thereof prior to commencing any such construction.
For all purposes hereunder, a Certificate of Completion shall mean such certificate (or any
certification or a similar written statement) by the City of Dubuque, Iowa, providing that any
Improvements hereunder are completed pursuant to applicable City ordinances.
ARTICLE 4
ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
4.1 Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by mortgage, deed
of trust 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
mail or deliver to the Holder, at such address, a duplicate copy of all notices in writing which Lessor
may, from 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 rights of Lessee shall be terminated as provided in this Lease, pay any ofthe rents due under this
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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 16.2. 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
Lessee agrees to pay as additional rent an amount equal to real estate taxes upon the real estate of
the Demised Premises that become payable (as such taxes come due) 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 lmown 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 rights 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 or otherwise reserved to Lessor hereunder.
Lessee shall at all times have the right 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 right to assess or levy
the same against or collect the same from said Demised Premises or Improvements, shall be disputed
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 right to redeem therefrom expires, whichever
will be the earlier, Lessee shall promptly pay and satisfy such disputed tax, assessment or other
charge as finally determined, together with all expenses, costs and attorneys' fees whatsoever
incurred in connection therewith,
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ARTICLE 6
REPAIRS
Lessee shall at all times during the term of this Lease, at Lessee's 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 structural 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) to make any such alteration, addition, or modification that equals or exceeds
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 (any alteration, addition or modification less than Fifty Thousand and
00/100 Dollars ($50,000.00) in cost shall not require Lessor's consent).
ARTICLE 9
USE OF DEMISED PREMISES
Lessee shall operate the Improvements/Project for the purposes outlined herein and shall not
lmowingly use or allow the Demised Premises or any buildings or Improvements thereon or any
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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,
After the issuance of the Certificate of Completion, Lessee shall not cause, allow or permit
any outdoor storage of any materials, objects or things of any kind, including refuse, trash or
garbage, at any time on the Demised Premises. Notwithstanding the foregoing, refuse storage is
permissible in an accessory storage enclosure if the City Manager determines that the structure is
in character with the principal building and constructed of the same quality permanent materials as
the principal building. The accessory structure shall be within close proximity to the principal
structure. Where the structure exceeds 200 square feet in area, at least 1/3 of the structure's exterior
perimeter shall be landscaped with ornamental trees and shrubs.
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 Lessor, furnish
Lessor with proof of payment of premiums on):
A. Builder's risk insurance, written on the Special Perils Form in an amount equal to one
hundred percent (100%) ofthe replacement value ofImprovements as the same shall exist fÌ'om time
to time during the construction process; and,
B.
Schedule.
Commercial general liability insurance as set forth in the attached insurance
10.2 Upon completion of construction of Improvements, Lessee shall maintain, or cause
to be maintained, at its cost and expense (and fÌ'om time to time at the request of Lessor 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, but 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 Lessor. The term
"replacement value" shall mean the actual replacement cost ofImprovements (excluding foundation
and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and
equipment, and shall be determined fÌ'om time to time at the request of Lessor, but not more
fÌ'equently than once every three years, and paid for by Lessee.
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B. Commercial general liability insurance as set forth in Lessor's standard insurance
schedule for tenants of city property, which schedule may from time to time be amended by Lessor.
Lessor's current Insurance Schedule is attached hereto.
10.3 Lessee shall complete the repair, reconstruction and restoration ofImprovements,
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 in possession of the Demised Premises, and that it has (or will have) full right and
authority to enter into this Lease for the full termhereof(subject to Article 25 below), 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 Lessee will
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 permits with regard to the Demised Premises and its use, occupancy and control of
the Demised Premises,
B. 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, the obtaining thereof being a conditioned precedent to this Lease.
12.2
Environmental Matters.
A. Lessee covenants and agrees that Lessor shall have no responsibility for or liability
arising from any release of a Hazardous Substance which is caused by or results from Lessee's use,
occupancy or control of the Demised Premises, except for Lessor Hazardous Substances (any
Hazardous Substance which leaches or migrates upon the Demised Premises from any property
owned by Lessor). Notwithstanding any other provision of this Lease, Lessee shall not have any
responsibility for any Hazardous Substance which leaches or migrates upon the Demised Premises
from any adjacent property or any release of a Hazardous Substance which is caused by Lessor or
which pre-exists as of the date of this Lease, all of which shall be and remain the liability of Lessor.
B. Lessee covenants and agrees to notify Lessor promptly of any release of Hazardous
Substance in, on or about the Demised Premises of which Lessee has actuallmowledge.
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C. Lessee covenants and agrees to take promptly any and all necessary and appropriate
response to address any release of Hazardous Substance for which Lessee is responsible under
Section l2.2A. Such response shall include, without limitation, notification to appropriate
governmental authorities, as may be required by law.
D. Lessee covenants and agrees not to manufacture, treat or dispose of Hazardous
Substances at the Demised Premises or lmowingly allow the manufacture, treatment, or disposal of
Hazardous Substances on the Demised Premises,
E. Lessee shall have the right to perform environmental site assessments of the Demised
Premises to assess the environmental condition of the Demised Premises for the purpose of
constructing and operating (even through an affiliate) a hotel and restaurant. Any results or reports
created by such site assessment shall be the property of Lessee and may be used by Lessee and
L,essor 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.
For the purposes of this Lease, "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 ofIowa 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. ~690l 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.l 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.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification of Lessee. To the extent allowed by law, Lessor will indemnify and
save harmless Lessee 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 Lessee 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 and
resulting from any act or omission of Lessor or anyone acting by, through, or under Lessor, (b) any
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
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be defended by counsel approved by Lessee, which approval will not be unreasonably withheld.
13.2 Indenmification of Lessor. Lessee will indenmify 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 ofthis 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 Condenmation. 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 all other sums not directly attributable 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 Condenmation. Ifless 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
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continue this Lease in full force and effect or terminate this Lease, If Lessee 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 structural 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 condemnation, 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 after 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.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
This Lease may not be assigned or sublet by Lessee without the prior written consent of
Lessor, which consent shall not be unreasonably withheld, provided said third party assignee or
sublessee agrees in writing 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 ofthe 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 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 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 fÌ'om the Demised
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Premises and all persons occupying the Demised Premises and to use all necessary and legal 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
from 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 Lessor 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. Lessor agrees to execute
and deliver any nondisturbance and attornment agreements reasonably requested by Lessee's
lenders, from time to time, provided such nondisturbance and attornment agreement is consistent
with this section 16.2.
16,3 Lessee's Rights in the Event of Lessor'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 ofthirty (30) days after
written notice from Lessee setting forth the nature of Lessor'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 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
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Whenever and as often as a party shall fail 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 written 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. The 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. Either party, upon giving twenty (20) days' written notice to the other, may
offset amounts due to the other party for any amounts the notifying party pays or incurs hereunder
proper the obligation of the other party to whom such notice is sent.
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, aclmowledge 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 there 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 been 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
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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 right 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 ofthe
rights of Lessor to enforce the payment of any other rent then or thereafter 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 ofthe term ofthis 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, free and clear of alllettings 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 Fixtures, personal property and other belongings of Lessee or of any Lessee
or other occupant of space in the Demised Premises (excluding furniture, fixtures, and equipment
in room or the lobby) 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. See Article 3 above.
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 names 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 Base 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 mail,
registered and postage prepaid, and by facsimile addressed as follows:
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To Lessor:
City of Dubuque, Iowa
Attn: Mr. Michael C. Van Milligen
City Hall
13th St. & Central Ave.
Dubuque, IA 52001-4864
To Lessee:
Dubuque Casino Hotel, LLC
Attn: Mr. Wayne A. Briggs
137 Main St., Ste, 400
Dubuque, IA 52001
To DRA:
Dubuque Racing Association, L TD
Attn: Mr. Bruce Wentworth
1855 Greyhound Park Rd.
Dubuque, IA 52001;
23.2 The 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 written notice given by the
party as above provided.
ARTICLE 24
MISCELLANEOUS
24.1
Time of the Essence. Time is ofthe 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 ofIowa.
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 ofthis Lease or additional obligation
assumed by either party in connection with this Lease shall be binding only if evidenced in a writing
signed by each party or an authorized representative of each party.
24.5 Parties Bound. 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 Majeure. In the event that either party hereto shall be delayed or hindered in
or prevented ftom the performance of any act required hereunder by reason of strikes, lockouts,
labor troubles, unavailability of construction materials, unavailability or excessive price of fuel,
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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 Transient Boat Docking. During the Initial Term of this Lease, and as soon as
reasonably possible and practicable, City agrees to investigate with Lessee the feasibility of
providing transient boat docking facilities, at the expense of Lessee, for the benefit of the Project.
ARTICLE 25
DUBUQUE RACING ASSOCIATION, LTD. ("DRA")
The Dubuque Racing Association, LTD., an Iowa not for corporation ("DRA"), by and
through its authorized representatives, agrees that the City may Lease the Demised Premises to
Lessee, notwithstanding that certain Lease wherein the City of Dubuque, Iowa, a municipal
corporation, is the Lessor, and DRA is the Lessee, dated March 31,2004 (the "Prior Lease"). Lessor
and DRA agree to amend the Prior Lease at or prior to the execution hereof or within a reasonable
time thereafter.
ARTICLE 26
APPROVAL
This Lease shall not become effective until the prior written approval or consent ofDRA,
the Iowa Racing and Gaming Commission and American Trust & Savings Bank is received. If all
of the foregoing approvals are not received by July 15,2004, then this Lease shall be null and void
and of no further force or effect.
ARTICLE 27
RIGHTS OF FIRST REFUSAL
Lessee shall have the preemptive right during the Initial Term and the extension refered to
in Par. 1.1 to purchase the Demised Premises and the parking area described in the Parking Use
Agreement on the same terms and conditions as those of any bona fide offer received by and
acceptable to Lessor. Before making any sale or any agreement to sell, Lessor shall notify Lessee
in writing of the terms and conditions of the offer. Lessee, within sixty (60) days after receipt of
such notice, may exercise this preemptive right by written notice to Lessor. Failure of Lessee to
exercise this preemptive right on one or more occasions shall not affect Lessee's right to exercise
it on any subsequent occasion. Any sale or transfer of the Demised Premises, or any part thereof,
or of any larger tract ofland of which the Demised Premises may be a part, shall be expressly made
subject to all of the terms, covenants and conditions of this Lease.
DRA shall have the preemptive right during the Initial Term or any extension thereof to
Page 16 of27
,
. -
purchase the Improvements on the same terms and conditions as those of any bona fide offer
received by and acceptable to Lessee. Before making any sale or any agreement to sell, Lessee shall
notify Lessor and DRA in writing of the terms and conditions of the offer. DRA, within sixty (60)
days after receipt of such notice, may exercise this preemptive right by written notice to Lessee.
Failure ofDRA to exercise this preemptive right on one or more occasions shall not affect DRA's
right to exercise it on any subsequent occasion. Any sale or transfer of the Improvements shall be
expressly made subject to all of the terms, covenants and conditions of this Lease. In the event DRA
purchases the Improvements, Lessor shall lease the Demised Premises to DRA for the remainder of
the Initial Term or any extension thereof, subject to all ofthe terms, covenants and conditions of this
Lease.
ARTICLE 28
JOINT MARKETING
Any joint marketing or otherjoint ventures or opportunities for business relationships by and
between DRA and Lessee with regard to the hotel and restaurant contemplated herein and the
gaming and related facilities operated by DRA shall be the subject of separate agreements, from time
to time, by and between Lessee and DRA.
DRA agrees that, during the entire time this Lease remains in full force and effect, Lessee
shall be the exclusive provider of any hotel, motel or similar facility on any part of the entire real
estate described on Exhibit ""A"" attached hereto and by this reference made a part hereof
(consisting of 43.73 acres, more or less), as well as the exclusive provider of any franchised or
otherwise casual fine dining restaurant on the Demised Premises. DRA further agrees that DRA shall
not, without the consent ofDCH, operate or permit another to operate any franchised dining facility
on any part of the entire real estate described on Exhibit ""A"" attached hereto, other than a
franchised dining facility operated by DCH on the Demised Premises. Other than as provided in this
paragraph, nothing in this Lease shall, in any way, limit the operations of DRA adjacent to the
Demised Premises, including but not limited to the right or ability ofDRA to conduct its own (non-
franchised) food and/or beverage operations on or adjacent to DRA's facilities.
ARTICLE 29
FINANCING CONDITION
This Lease is subject to Lessee obtaining financing from or through a local financial
institution on prevailing terms for no less than eighty percent (80%) of the cost of the Project on or
before June 22, 2004.
Page 17 of 27
~
.
CITY OF DUBUQUE, IOWA, Lessor
By its Mayor
-
By its City Clerk
DUBUQUE CASINO HOTEL, LLC.,
Lessee
By its authorized representative
DUBUQUE RACING ASSOCIATION, L TD,
("DRA") For purposes of Articles 25, 26, 27
and 28 only
By its authorized representative
Page 18 of27
'.
.. .
EXHmIT "A"
LEGAL DESCRIPTION OF DEMISED PREMISES
That portion of the following-described real estate consisting of approximately one acre
depicted on the drawing attached to this Exhibit "A" and by this reference made a part hereof:
A parcel ofland containing 43,73 acres, more or less, located on Chaplain Schmitt Memorial
Island, lying immediately north of the Iowa-Wisconsin Bridge as set forth on the plat attached hereto
and made a part hereof and subject to a utility and roadway easement located on and about the
southerly property line, a roadway easement located on and about the easterly property line, and a
roadway easement on and about the westerly property line. [Exact legal description to be supplied
later.]
Lessor and Lessee agree to amend this Exhibit A upon determination of the exact location
and extent ofthe Improvements and determination ofthe legal description. Lessor and Lessee intend
that the Demised Premises shall initially consist of approximately one acre upon which the Phase
I Improvements shall be constructed and that the Demised Premises shall be enlarged by the area
necessary for the construction of the Phase II Improvements, if so constructed.
Page 19 of 27
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SCHEDULE ATTACHED TO EXHIBIT "A" [Need exhibit before city council action]
Wrawing of footprint of Demised Premises upon which hotel and restaurant are to be
constructed and Lessee's employee parking area.]
[This Schedule shall show the planned/approximate area ofthe Phase I and Phase II parking
areas.]
Page 20 of 27
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EXHIBIT "B"
PHASE I IMPROVEMENTS [Need exhibit before city council action]
Lessee shall construct on the Demised Premises at Lessee's option either a Sheraton Four
Points or Hilton Gardens Hotel, and a casual fine dining restaurant.
[Exact description of Phase I Improvements to be provided later].
Lessee shall commence construction of the Phase I Improvements by no later than August
1, 2004, and the Phase I Improvements shall be substantially complete by no later than July 1, 2005.
Plans and specifications with respect to the Improvements and the construction of the
Improvements shall be in substantial conformity with all applicable State and local laws and
regulations. Lessee shall submit to Lessor, for approval by Lessor, plans, drawings, specifications,
and related documents with respect to the Improvements to be constructed by Lessee on the Demised
Premises. All work with respect to the Improvements shall be in substantial conformity with the
construction plans approved by Lessor and shall be coordinated with any Lessor improvements in
the general vicinity of the Demised Premises. The Improvements shall include an indoor pool and
hot tub,
Lessee shall use its best efforts to maintain its affiliation with rSheraton Four Points or Hilton
Gardens Hotell during the Initial Term and the extension referred to in Par. 1.1. Lessor shall have
the right in its sole discretion to approve any change in such affiliation and no such change or
attempted change by Lessee shall be effective without Lessor's prior written approval.
Page 21 of27
)
.
EXHIBIT "C"
PARKING USE AGREEMENT - SEE ATTACHED
Page 22 of 27
'}
.
EXHmIT "D"
PHASE n IMPROVEMENTS [Need exhibit before city council action]
[Additional 100 rooms.]
[Exact specifications for these additional 100 rooms to be provided later.]
Plans and specifications with respect to the Improvements and the construction of the Improvements
shall be in substantial conformity with all applicable State and local laws and regulations. Lessee
shall submit to Lessor, for approval by Lessor, plans, drawings, specifications, and related
documents with respect to the Improvements to be constructed by Lessee on the Demised Premises.
All work with respect to the Improvements shall be in substantial conformity with the construction
plans approved by Lessor and shall be coordinated with any Lessor improvements in the general
vicinity of the Demised Premises.
Page 23 of27
..,
,.
INSURANCE SCHEDULE
INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY
OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO THE CITY OF DUBUQUE
1. All policies of insurance required hereunder shall be with an insurer authorized to
do business in Iowa. All insurers shall have a rating of A of better in the current A.M, Best Rating
Guide.
2. All policies of insurance shall be endorsed to provide a thirty (30) day advance notice
of cancellation to the City of Dubuque if cancellation is prior to the expiration date. This
endorsement supersedes the standard cancellation statement on the Certificate of Insurance.
3. Lessee shall furnish a Certificate of Insurance to the City of Dubuque, Iowa for the
coverage required in Paragraph 6 below. Such certificates shall include copies of the following
policy endorsements:
a)
b)
c)
d)
e)
Thirty day notice of cancellation to the City of Dubuque.
Commercial General Liability policy is primary and non-contributing.
Commercial General Liability additional insured endorsement.
Governmental Immunity Endorsements.
Waiver of recovery under workers compensation.
4. Each certificate shall be submitted to the Finance Department of the City of
Dubuque.
5. Failure to provide minimum coverage shall not be deemed a waiver of these
requirements by the City of Dubuque. Failure to obtain or maintain the required insurance
shall be considered a material breach of this agreement.
6. Lessee shall be required to carry the following minimum coverage/limits or greater
if required by law or other legal agreement:
a)
COMMERCIAL GENERAL LIABILITY
General Aggregate Limit
Products-Completed Operations Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (anyone occurrence)
Medical Payments
$2,000,000
$1,000,000
$1,000,000
$1,000,000
$ 50,000
$ 5,000
This coverage shall be written on an occurrence, not claims made, form per location. All
deviations or exclusions from the standard ISO commercial general liability form CG 0001 or
Page 24 of 27
I .
..
Business owners form BP 0002 shall be clearly identified.
Governmental Immunity Endorsement identical or equivalent to form attached.
An additional insured endorsement identical or equivalent to ISO Form CG 2026 or CG 20 11
and include as additional insureds: "The City of Dubuque, including all its elected and appointed
officials, all its employees and volunteers, all its boards, commissions and/or authorities and their
board members, employees, and volunteers."
b)
WORKERS' COMPENSATION & EMPLOYERS LIABILITY
Statutory for Coverage A
Employers Liability:
$100,000 each accident
$100,000 each employee-disease
$500,000 policy limit-disease
Policy shall include an endorsement waiving right of recovery against City of Dubuque.
c) UMBRELLA/EXCESS LIABILITY $ 4,000,000
LIQUOR OR DRAM SHOP LIABILITY $ 1,000,000
Coverage to be determined on a case-by-case basis by Finance Director.
Page 25 of 27
,
..
POLICY NUMBER
COMMERCIAL
GENERAL LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED - DESIGNATED PERSON OR
ORGANIZATION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person Or Organization:
The City of Dubuque, including all its elected and appointed officials, all its employees and
volunteers, all its boards, commissions and/or authorities and their board members, employees, and
volunteers.
(If no entry appears above, information required to complete this endorsement will be shown in the
Declarations as applicable to this endorsement.)
WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization
shown in the Schedule as an insured but only with respect to liability arising out of your operations
or premises owned by or rented to you.
Copyright. Insurance Services Office. Inc. 1994
CG 20 26 1185
Page 26 of 27
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J..,
CITY OF DUBUQUE, IOWA
GOVERNMENTAL IMMUNITIES ENDORSEMENT
1.
Nonwaiver of Governmental Immunity. The insurance carrier expressly agrees and states
that the purchase of this policy and the including of the City of Dubuque, Iowa as an
Additional Insured does not waive any of the defenses of governmental immunity available
to the City of Dubuque, Iowa under Code ofIowa Section 670.4 as it is now exists and as
it may be amended from time to time,
2.
Claims Coverage. The insurance carrier further agrees that this policy of insurance shall
cover only those claims not subject to the defense of governmental immunity under the Code
of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those
claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and
conditions of this insurance policy.
3.
Assertion of Government Immunity. The City of Dubuque, Iowa shall be responsible for
asserting any defense of governmental immunity, and may do so at any time and shall do so
upon the timely written request of the insurance carrier.
4.
Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and
the insurance carrier shall not deny any of the rights and benefits accruing to the City of
Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a
court of competent jurisdiction has ruled in favor of the defense(s) of governmental
immunity asserted by the City of Dubuque, Iowa.
No Other Change in Policy. The above preservation of governmental immunities shall not
otherwise change or alter the coverage available under the policy.
F,IWPDOCSlMissyIDOCSICity o!Dubuque - DBQ Casino Hotel Lease Ag=ment BJK FinaI.wpd
Page 27 of 27
Prepared by: Brian 1. Kane, Kane, Norby & Reddick, P.c., 2100 Asbury Rd., Ste. 2 Dubuque, IA 52001 563-582-7980
PARKING USE AGREEMENT
THIS PARKING USE AGREEMENT ("Agreement") is made and entered into effective the
- day of June 2004, by and between the DUBUQUE RACING ASSOCIA nON, L TD, an Iowa
nonprofit corporation ("DRA"), and DUBUQUE CASINO HOTEL, LLc., an Iowa limited liability
company ("DCH") and The City of Dubuque, an Iowa municipal corporation ("CITY").
RECITALS
A. CITY and DRA entered into that certain lease dated March 31, 2004 with regard to
certain real estate (described on Exhibit "A" attached hereto and by this reference made a part
hereof), (the "Prior Lease");
B, CITY and DCH are parties to a lease dated June -' 2004 (the "Lease") located
upon real estate formerly leased by DRA pursuant to the Prior Lease, upon which DCH shall
develop and construct a hotel, restaurant, and other improvement (the "Project"); and,
C. For the purpose oflessening the burden of the City's duties with respect to providing
parking areas and parking area maintenance for the Project pursuant to the City-DCH Lease, DRA
agrees to enter into this Parking Use Agreement with the City and DCH.
D.
The parties have entered into this Agreement to provide for parking for the Project.
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby aclmowledged, the parties agree upon the following mutual terms and conditions:
1. Term of Agreement. The term of this Agreement (the "Term" shall commence on
the date thirty (30) days immediately prior to the anticipated date ofthe issuance of the Certificate
of Completion (as defined the Lease), and shall terminate upon the expiration or termination of the
Lease. This Agreement shall be transferable, without further consent, with the Lease.
2. Parking and Legal Description, During the Term ofthis Agreement, the DRA shall
provide to DCH sufficient space on the real estate leased by DRA under the Prior Lease such that
DCH can construct a surface lot for vehicular parking, sidewalks, landscaping, and lighting for such
parking area, in the areas designated Phase I parking and legally described on Exhibit A attached
hereto (the "Phase I Parking Area") for the non-exclusive use by DCH, and its guests, vendors,
suppliers and employees, The Phase I Parking Area shall include pedestrian access and vehicular
access to the Phase I Parking Area from, among other things, the Project. DRA and DCH agree that
the Phase I Parking Area shall include a minimum of 400 parking spaces for the benefit ofthe Phase
I Improvements (as defined in the Lease). DRA shall pay to DCH the first $220,000.00 in cost
related to construction of the Phase I Parking Area. Such payment shall be made in a manner as to
allow the funds to be available to DCH when DCH is required to pay its contractors related to such
construction. In the event that the DCH constructs the Phase II Improvements (as defined in the
Lease), DRA shall provide sufficient space on the real estate leased by DRA under the Prior Lease
such that DCH can construct a surface lot for vehicular parking in the areas designated Phase II
parking or as described on Exhibit A (the "Phase II Parking Area") for the non-exclusive use by
DCH 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 from, among other things, the
Project. DRA and DCH agree that the Phase II Parking Area shall include a minimum of an
additional 100 parking spaces for the Phase II Improvements (a minimum of 500 parking spaces
combined for both Phase I and Phase II projects), DCH shall be responsible for all costs associated
with construction of the Phase II Parking Area, For purposes of this Agreement, Phase I Parking
Area and Phase II Parking Area shall collectively be referred to as the "Parking Area" The parties
shall mutually agree to the specifications of construction of the Parking Area.
During the term of the Prior Lease or any extension thereof, DRA shall be responsible for
all routine day to day custodial maintenance of the Parking Area during the Term of this Agreement,
including, without limitation, lighting, sweeping, trash collection, landscape trimming, snow
removal and clearing of ice from the Parking Area. DRA shall be responsible, at no cost to DCH,
for the replacement, repair and other maintenance associated with the Parking Area, including,
without limitation, the repair, replacement and maintenance of lighting, surface potholes, surface
reconstruction and restoration, landscape replacements, parking space striping and re-caulking of
the parking area, DCH, and its guests, vendors, suppliers and employees, shall at all times have
reasonable access to the Parking Area and DRA and/or CITY shall keep the Parking Area reasonably
clear at all times in order that DCH, and its guests, vendors, suppliers and employees, may use the
Parking Area. DRA 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, DRA
shall be responsible for security in the Parking Area, DRA and DCH 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, However, in the event of a termination of
the Prior Lease for any reason, DCH shall assume and perform for all of DRA's duties and
responsibilities as set forth in this paragraph.
3, Pedestrian Ingress/Egress. DRA shall provide a reasonably direct and convenient
means of public pedestrian 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 applicable at the time the Parking Area
is constructed including, but not limited to, the Americans with Disabilities Act.
4.
Outdoor Storage Prohibited. DCH shall not cause, allow or permit any outdoor
2
storage of any materials, objects or things of any kind, including refuse, trash or garbage, at any time
on the Demised Premises. Notwithstanding the foregoing, refuse storage is permissible in an
accessory storage enclosure if the City Manager determines that the structure is in character with
the principal building and constructed of the same quality permanent materials as the principal
building, The accessory structure shall be within close proximity to the principal structure. Where
the structure exceeds 200 square feet in area, at least 1/3 of the structures exterior perimeter shall
be landscaped with ornamental trees and shrubs,
5. Vehicular Ingress/Egress. DRA 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
vehicles, 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. DRA shall be responsible for cost,
maintenance, and repair of all non-public streets at no cost to DCH, for all non-public streets,
landscaping and lighting for the Parking Area, such non-public streets, landscaping and lighting
shall be consistent with the character of the surrounding area,
6, Hold Over Vehicles. Any unauthorized vehicles using the Parking Area may be
removed by DRA at any time by any lawful means,
7. Rental. DCH shall pay $5,000.00 per year to DRA as ofthe commencement date and
each year annually hereunder for the use of the Parking Area pursuant to this Agreement. The
parties agree that full and adequate consideration for the obligations undertaken by DRA pursuant
to this Agreement has been provided by the obligations undertaken by DCH as Lessee pursuant to
the Lease.
8, Relationship Between Parties. It is mutually understood and agreed that nothing in
this Agreement shall be construed as establishing a relationship oflessor/lessee, principal/agent or
co-partners between DRA and DCH and CITY.
9. Reciprocal Covenants. DCH covenants and agrees that the DRA and CITY shall
have no responsibility for, or liability arising from, any release of Hazardous Substances (as defined
in the Lease) on or under the Parking Area, which is caused by DCH, or its guests, vendors,
suppliers, or employees. CITY agrees that DCH shall not have any responsibility for any Hazardous
Substances existing or found on or under the Parking Area (except for Hazardous Substances
deposited by DCH or its agents or assigns). There shall be a rebuttable presumption that any
Hazardous Substances found on or under the Parking Area were not deposited by DCH. Except for
Hazardous Substances released or deposited by DCH or its agents or assigns on the Parking Area,
CITY shall retain any legal responsibility or liability, subject to available defenses, CITY may have
under law 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
Hazardous Substances on or affecting the Parking Area as ordered by a state or federal agency,
3
subject 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 CITY or to require CITY to
absorb any duties, responsibilities or liabilities that it does not already have for Hazardous
Substances existing, located or found on or under the Parking Area. To the fullest extent allowed
by law, CITY agrees to indemnify DCH for reasonable costs and expenses associated with
responding to any legally enforceable order regarding Hazardous Substances from any governmental
agency or court with proper jurisdiction to the extent that CITY, after DCH has given reasonable
notice of the governmental order to CITY, does not timely and reasonably respond to said inquiry
or order and if CITY allows full access to the Parking Area as necessary, as provided herein. 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 responses. However,
CITY agrees to indemnify DCH for any penalties and fines DCH incurs as a result of any such
appeal or negotiation. CITY shall minimize any disruption and will not materially or unreasonably
restrict or interfere with the use of the Parking Area by DCH or its guests, vendors, suppliers or
employees. In the event CITY restricts or interferes with the use of any part of the Parking Area,
CITY shall provide DCH, 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, Right of First Refusal. IfDRA desires to sell, lease, develop, assign or otherwise
transfer (collectively referred to herein as a "Transfer") all or any part of the Parking Area and/or
any property to be used for Phase II Improvements (as defined in the Lease) during the term of this
agreement, DCH shall have an option and right of first refusal to purchase or lease such property,
as the case may be, or any part thereof to be transferred, as provided in this Section 10. IfDRA has
received a bona fide offer to purchase or lease such property as described in this Section 10 from
a third party which DRA desires to accept, DRA shall deliver to DCH a copy of such offer
specifying the name and address of the prospective transferee, the portion ofthe property hereunder,
as the case may be, to be transferred, the proposed purchase price or lease payment and all other
important terms of the proposed Transfer, and DRA shall offer to sell, transfer or lease such
property, as the case may be, to DCH on the exact terms contained in such bona fide offer. DCH
shall, within sixty (60) days after receipt of a copy of such bona fide offer, by written notice to DRA,
elect either to: (a) exercise its rights of first refusal to purchase or lease, as the case may be; or (b)
waive its right of first refusal to purchase or lease pursuant to such notice with regard to the property
covered by this Section 10 proposed to be transferred. If DCH exercises its right of first refusal,
DRA shall transfer or lease, as the case may be, such property to DCH within ninety (90) days of
the exercise by DCH of this right of first refusal. If DCH waives its right of first refusal in the
manner set forth above, DRA shall have the right, for a period of one (1) year after the date of
DCH's waiver, to consummate the Transfer upon terms and conditions exactly the same as and no
less favorable to DRA than those contained in the bona fide third-party offer. Provided,
notwithstanding any waiver by DCH of its right of first refusal, the Transfer ofthe Property to any
third party shall be subject to the terms of this Agreement. If a proposed Transfer is not
consummated within the aforementioned one (1) year period following waiver by DCH, the Property
4
covered by this Section 10, as the case may be, shall not thereafter be released from the effect ofthis
Section 10.
11, Remedies, Except as otherwise 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 within 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, Notwithstanding anything herein to the contrary, either party
may, after the above 30-day period, cure the default of the other party and seek recovery of the cost
for such cure from the other party. The prevailing party in any actions brought under this paragraph
shall be entitled to recover reasonable attorneys fees and court costs and interest on unpaid sums at
the rate of ten percent per annum from the date due.
12. Notices. A notice, demand or other communication under this Agreement by any
party to the other party(ies) 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 ofDRA, is addressed to Dubuque Racing Association, LTD, Attn: Mr.
Bruce Wentworth, 1855 Greyhound Park Rd., Dubuque, IA 52001;
(b)
In the case ofDCH, is addressed to Dubuque Casino Hotel, LLC, Attn: Mr. Wayne
A. Briggs, 137 Main St., Ste. 400, Dubuque, IA 52001;
(c)
In the case of CITY, is addressed to City of Dubuque, Iowa, Attn: Mr. Michael C.
Van Milligen, 13th St. & Central Ave" Dubuque, IA 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. Governing Law. It is agreed thatthisAgreement shall be governed by, construed and
enforced in accordance with the laws of the State ofIowa.
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 run with the Lease between
5
CITY and DCH, and (ii) shall be transferable with the Lease, and (iii) shall remain in effect for the
length of the Lease (as defined therein) and the extension referred to in Par. 1.1 of the Lease. This
Agreement shall be binding on and shall inure to the benefit of the parties and their respective
successors in interest and assigns,
16. City Bound Upon Termination of Prior Lease, In the event the Prior Lease
terminates for any reason, prior to the end of the Term (or any extensions or renewals) provided
herein, CITY agrees that, except for the maintenance obligations described in Par. 2, it will continue
to be bound by the terms of this Parking Use Agreement and shall succeed to the rights and
obligations ofDRA herein. In the event that upon termination of the Prior Lease, City enters into
a subsequent lease of Dubuque Greyhound Park & Casino, City shall require that the lessee in such
lease shall be responsible for the maintenance obligations described in Par, 2 for the term of such
lease.
17. Limitation on City's Financial Obligations. Nothwithstanding any other provision
in this Agreement, the City shall have no financial obligation of any kind to DCH for any
improvements to the Demised Premises, the parking areas or otherwise.
18. Financing Condition. This Agreement is subject to DCH obtaining financing from
or through a local financial institution on prevailing terms for no less than eighty percent (80%) of
the cost of the Project (as depicted in the Lease).
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
effective the day first above written,
DUBUQUE RACING ASSOCIA nON, L TD
By its authorized representative
DUBUQUE CASINO HOTEL, LLc.
By its authorized representative
CITY OF DUBUQUE, IOWA
By its Mayor
6
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CITY OF DUBUQUE, lOW A
By its City Clerk
[NOTARY BLOCKS TO BE ADDED ON PARKING USE AGREEMENT]
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EXHIBIT A
PARKING AREAS
See attached.
F,IWPOOCS\Mi"yIDOCSIDBQ Racing A"n - DBQ C",ino Hntel P"king U" Agmment BJK FinaLwpd
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