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Casino Hotel Lease amendment D~~ ~<!N--~ MEMORANDUM March 16, 2005 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Dubuque Casino Hotel Corporation Counsel Barry Lindahl is recommending adoption of an amendment to the City-Dubuque Casino Hotel Lease. I concur with the recommendation and respectfully request Mayor and City Council approval. MiCha~~~ ~til MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager BAR R Y A. L I N D A H L, E S CORPORATION COUNSEL, CITY OF DUBUQUE MEMO To: Michael C. Van Milligen City Manager DATE: March 8, 2005 RE: Dubuque Casino Hotel Mike: Enclosed is correspondence from Brian Kane indicating that Hilton Inns, Inc. is requiring an amendment to the City-Dubuque Casino Hotel Lease before the License Agreement for the hotel is signed. The Amendment changes the date for commencement of construction of the Phase I improvements to November 1, 2004, rather than the August 1, 2004 date required by the original lease. The parties acknowledge that even due to the later commencement of construction, the Phase I improvements have been timely commenced and that there are no defaults under the lease. I recommend that the Amendment No. 1 To Lease Agreement be submitted to the Mayor and City Council Members for approval at the March 21, 2005 City Council meeting. cc: Brian Kane, Esq. (no enc.) SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 TELEPHONE (563) 583-4113/ FAX (563) 583-1040/ EMAIL balesq@cityofdubuque.org Brian J. Kane Gary K. Norby Les V. Reddick* D. Flint Drake** BradJ. Heying Todd L. Srevenson* MaryBeth pfeiler Fleming Kevin T. Deeny John D. Freund KANE, NORBY & REDDICK, P .C. A TIORNEYS 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 March 7, 2005 Barry A. Lindahl, Esq. Corporation Counsel 300 Main St., Ste. 330 Harbor View Place Dubuque, IA 52001 RE: DUBUQUE CASINO HOTEL- AMENDMENT TO LEASE AGREEMENT Dear Barry: Enclosed please find a copy of an e-mail that we received from Hilton Gardens. Please note that they are now requiring the executed Amendment No.1 to Lease Agreement before they will sign the License Agreement. This is contrary to what they told us previously. Also enclosed please find a copy ofan e-mail dated February 14,2005, from Hilton Gardens in which they have approved the franchise application subject to receipt of the Amendment of the Lease. We would appreciate it if you could have the Lease Amendment executed so that we may forward it to Hilton and obtain the license agreement. If you have any questions, please do not hesitate to contact us. Thank you. Best regards, By: BJK:sa Bncs. cc: Wayne A. Briggs Page 1 of 1 Brian Kane From: To: Sent: Attach: Subject: "Brad Bierman" <bbierman@epicgc.com> <bkane@kanenorbylaw.com> Friday, March 04, 2005 11 :08 AM HGI Dubuque IA App Approval and FLA Transmittal 021405.doc FW: HGI Dubuque Downtown -----Original Message---- From: Ann Marie Favors [mailto:Ann_Marie]avors@Hilton.com] Sent: Friday, March 04, 2005 11:03 AM To: Brad Bierman Cc: Matt Wehling; Sara Bovasso Subject: HGI Dubuque Downtown Brad, We are in receipt of the License Agreement for the above property, thank you. However, pursuant to the approval letter dated 2/14/05 and as part of the due diligence requirement we will need the amended, executed copy of the ground lease showing future completion dates for construction commencement and completion of the hotel before we can sign the License Agreement. Once we are receipt of the executed ground lease, an executed original License Agreement will be forwarded for your files. I have attached a copy of the approval letter for your reference. Thanks, Ann Marie Favors Sr. Coordinator-Franchise Administration Franchise Hotel Group 9336 Civic Center Drive Beverly Hills, CA 902/0 (p) 310/205-7810 (f) 310/205-7655 anll_ marie Javors@hilton.com fI') /fI'7/"IflflI:: February 14,2005 VIA OVERNIGHT MAIL Dubuque Casino Hotel, L.L.C. 13 7 Main St., Suite 500 Dubuque, IA 52001 Attention: Mr. Bierman RE: PROPOSED HILTON GARDEN INN DUBUQUE DOWNTOWN Dear Mr. Bierman: Congratulations! On February 10, 2005, the Franchise Executive Committee of Hilton Inns, Inc. ("Licensor") approved your franchise application and issuance of our current standard franchise license agreement (the "License Agreement") in the name of Dubuque Casino Hotel, L.L.C. ("Licensee") for the development of the proposed 110-room Hilton Garden Inn (the "Licensed Brand") hotel located or to be located at Greyhound Park Drive between Highway 16 and 151 and Kerper Blvd., Dubuque, IA 52001 (the "Hotel"). THE LICENSE AGREEMENT: Enclosed you will find three (3) execution copies of the License Agreement. For your convenience, a redlined version is also enclosed highlighting changes from the standard License Agreement disclosed in the current Uniform Franchise Offering Circular (the "UFOC"). The terms, conditions and requirements of the License Agreement are not subject to revision, deletion or waiver. Federal Trade Commission regulations require the License Agreement, in fmal form, be delivered to Licensee at least five (5) business days prior to execution. However, a condition of our signing the License Agreement is that the agreement be executed and returned by you within fifteen (15) days of the date of this letter. Therefore, please have an authorized representative sign and date the enclosed agreements and return all copies to my attention no earlier than February 23, 2005 but no later than March 1, 2005 (the "Deadline Date"). A fully executed copy of the License Agreement will be returned to you for your records. Please note, any waiver, condition or extension of the above Deadline Date is in our discretion and is not effective unless delivered to you in writing, even if we have ongoing discussions with you concerning the License Agreement after the Deadline Date. Further, in the event you do not sign and return the License Agreement on or before the Deadline Date, we may terminate our offer and retain the non-refundable application fee. DUE DILIGENCE: Prior to our executing the License Agreement, we must receive and review certain documentation, with regard to Licensee. Please submit the following items to my attention on or before the Deadline Date: Re: Hilton Garden Inn Dubuque Downtown March 7, 2005 Page 2 I. An amended, executed copy of the ground lease showing future completion dates for construction commencement and completion of the Hotel; 2. A Certificate of Good Standing of the Licensee from the state of organization, (certified within the last thirty (30) days of the date of this letter if Licensee was organized prior to such thirty (30) day period); and 3. Such other documents relating to the items above that we may reasonably request. INSURANCE REQUIREMENTS: Please note, at least thirty (30) days prior to the commencement of construction, Licensee must submit to Licensor's Risk Management department evidence of insurance coverage naming Licensor and its affiliates as additional insureds, all in accordance with the terms of the License Agreement and the Licensed Brand standards manual. PROJECT MANAGER: Wayne Huddleston of our Design and Construction Department will be your project manager and will assist you during the design and construction phases of this project. If you have not already done so, please contact Wayne at (901) 374-5617 to set up a meeting to discuss the project within the next 45 days as required in Attachment A, Paragraph A, of the License Agreement. You and your architect will need to attend. Please note, approval of your application does not mean we have approved your site plan or any other plans or designs that you may have already submitted to us. . Your project. manager will advise you . directly of any modifications you may need to make to your plans and designs to meet our standards and specifications. HOTEL MANAGEMENT: Pursuant to Paragraph 6.c. of the License Agreement, you are required to obtain our prior written approval of the proposed operator of the Hotel, including (i) you or a third-party management company and (ii) your general manager (collectively, "Managemenf'). Please note that this approval of your application does not constitute written approval of your proposed Management. You should direct your Management approval requests to Dawn Berry, Vice President - Hilton Garden Inn Brand Management, at 310/205-8690 at least six months prior to the anticipated opening of the Hotel. HILTON GARDEN INN OWNER'S ORIENTATION: As an approved Licensed Brand licensee, you are required to attend an Owner's Orientation session as soon as possible before you begin construction of the Hotel. These sessions are currently held three times per year at the Hilton Garden Inn LAX/El Segundo, generally in January, May and October. There is no charge for you and one associate to attend; however, you are responsible for associated travel and hotel C:\W1NDOWS\TEMPOR-1\CONTENT.lE5\4X8AFJPO\HGI Dubuque IA App Approval and FLA Transmittal 021405.doc Re: Hilton Garden Inn Dubuque Downtown March 7, 2005 Page 3 expenses. For more information and to register for Owner's Orientation, please contact Gillian Cook at 310/205-4080. Once again, congratulations on the approval of your application. Should you have any questions regarding the above, please feel free to contact your franchise developer, Matt Wehling, at (312) 294-6666 or me at (310) 205-3345. We look forward to hearing from you at your earliest convenience. Regards, HILTON INNS, INC. (S;~- ':F:,ova~c. Sara K. Bovasso Sr. Manager - Franchise Administration Enclosures: License Agreement cc: Dawn Beghi Marybelle Arnett Matt Wehling Wayne Huddleston Jamie lobe C:\WINDOWS\TEMPOR-1\CONTENT.lE5\4XBAFJPOIHGI Dubuque IA App Approval and FLA Transmittal 021405.doc Prepared by Brian J. Kane, KANE, NORBY & REDDICK, P.C., 2100 Asbury Road, Suite 2, Dubuque, lA 52001563/582-7980 Space Above This Line for Recorder . AMENDMENT NO.1 TO LEASE AGREEMENT This Amendment No.1 to Lease Agreement ("Amendment No.1") is made and entered into as ofthe _ day of , 2005, 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 and Lessee entered into that certain Lease Agreement dated July 6, 2004 (hereinafter the "Lease"); B. Pursuant to Exhibit "B" ofthe Lease, Lessee was to commence construction of the Phase I Improvements by no later than August 1, 2004; C. The parties desire to execute this Amendment No.1 to acknowledge that construction of the Phase I Improvements commenced after August 1,2004; and D. All other terms and conditions of the Lease shall remain in full force and effect. THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Amendment of Exhibit B. The parties hereby acknowledge that construction of the Phase I Improvements commenced on November 1, 2004, and the third paragraph of Exhibit B is amended in its entirety to read as follows: Lessee shall commence construction ofthe Phase I Improvements by no later than November 1, 2004, and the Phase I Improvements shall be substantially complete by no later than July 1,2005. 2. Acknowledgment of Commencement. The parties acknowledge that construction of the Phase I Improvements has been timely commenced in accordance with this Amendment No. 1 and that there are no defaults under the Lease as of the date hereof. Page 1 of 2 IN WITNESS WHEREOF, the parties have executed the foregoing Amendment No.1 as of the date and year first above written. CITY OF DUBUQUE, IOWA, Lessor By: Its DUBUQUE CASINO HOTEL, L.L.C. By: Wayne A. Briggs, Its Authorized Representative F,\WPDOCS\SaDdy\BndIDobCasinoHolel-AJlleadm'" No. 110 Lcue ArI. wpd Page 2 of 2