Casino Hotel Lease amendment
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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.
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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
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