This Development Agreement involves
Title: FIRST AMENDMENT TO REDEVELOPMENT AGREEMENT AND
FIRST AMENDMENT TO OPTION FOR GROUND LEASE
Governing Law: Delaware Date: 3/16/2006
Industry: Casinos and Gaming
FIRST AMENDMENT TO REDEVELOPMENT AGREEMENT AND
FIRST AMENDMENT TO OPTION FOR GROUND LEASE
THIS FIRST AMENDMENT TO REDEVELOPMENT AGREEMENT AND FIRST AMENDMENT TO OPTION FOR GROUND LEASE (“ Amendment ”) is made and entered into effective this 23rd day of December, 2004, by and between LAND CLEARANCE FOR REDEVELOPMENT AUTHORITY OF THE CITY OF ST. LOUIS (hereinafter the “ LCRA ”), a public body corporate and politic established pursuant to the Land Clearance for Redevelopment Authority Law of the State of Missouri, for itself and on behalf of the City of St. Louis, Missouri (hereinafter the “ City ”), a political subdivision of the State of Missouri, and PINNACLE ENTERTAINMENT, INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter the “ Redeveloper ”).
W I T N E S S E T H :
WHEREAS , on April 22, 2004, LCRA and Redeveloper entered into that certain Redevelopment Agreement (the “ Redevelopment Agreement ”) which governed the development of certain real property described in Exhibit A to the Redevelopment Agreement and referred to as the “ Redevelopment Area ”; and
WHEREAS , LCRA and Redeveloper desire to extend the time in which to obtain the preliminary site plan approval from the Missouri Gaming Commission (hereafter “ MGC ”) contemplated in Section 4.1.2(iv) of the Redevelopment Agreement; and
WHEREAS , the LCRA and Redeveloper desire to clarify their agreement regarding the preliminary site plan approval of the MGC;
WHEREAS , LCRA and Redeveloper entered into that certain Option for Ground Lease (the “ Option ”) for certain real property bounded by Martin Luther King Drive, Carr Street, First Street and Leonor K Sullivan Drive in the City of St. Louis, Missouri (the “ Option Area ”); and
WHEREAS , the Option permits the Redeveloper to exercise the Option for Ground Lease for Non-Gaming Uses (as defined in the Ground Lease and which definition is incorporated herein by reference); and
WHEREAS , LCRA and the Redeveloper desire to amend the Option to permit the Redeveloper to purchase the fee interest in the Property in the event that Redeveloper elects to use the Property for a mixed-use project that is substantially comprised of residential units sold on an individual basis as a Non-Gaming Use under the provisions provided herein; and
WHEREAS , LCRA is obligated under the Option to exercise its power of eminent domain to attempt to acquire any property in the Option Area not owned by the LCRA in order to lease or sell such property to Redeveloper if Redeveloper exercises certain rights under the Option; and
WHEREAS , the form of Ground Lease which is Exhibit B to the Option sets forth the process for determining the Base Rent to be paid by Redeveloper under the Ground Lease in the event that Redeveloper exercises its rights under the Option and uses the property in the Option Area for Non-Gaming Uses; and
WHEREAS , LCRA and the Redeveloper desire to amend the form of Ground Lease to provide that the Base Rent for Non-Gaming Uses shall be subject to adjustment based on the amount that the LCRA may be required to pay for any property in the Option Area under its exercise of eminent domain;
WHEREAS , upon a determination of Market Based Rent as set forth herein and in the Option, the Redeveloper contemplates entering into the Ground Lease immediately and redeveloping the Option Area in accordance with the Redevelopment Agreement, including obtaining all approvals of the City and other governmental agencies having jurisdiction over the Option Area.
NOW, THEREFORE , in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties hereto, the LCRA and Redeveloper agree as follows:
1. Extension . Sections 4.1.1(viii) and 4.1.2(iv) of the Redevelopment Agreement are each modified to substitute the date January 31, 2005 for December 31, 2004.
2. Preliminary Site Plan Approval . The references to the preliminary site plan approval by the MGC in the Redevelopment Agreement, shall mean the issuance of findings of fact and conclusions of law by the MGC determining that Redeveloper’s site plan appears to comply with Missouri gaming law, and allowing Redeveloper to proceed to the next step of the investigation process, subject to the review and approval by MGC of the final design and licensure.
3. Amendment to Option .
a. The first paragraph of the Option following the “Witnesseth” clause shall be amended and restated as follows:
“In consideration of the option money hereinafter described, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Owner does hereby grant unto Optionee, the exclusive right and option (the “Option”) to lease, under the terms and conditions set forth in the Ground Lease attached hereto as Exhibit B (the “ Ground Lease ”), up to seven (7) acres of real estate located in the City of St. Louis and further described in Exhibit A, attached hereto and made a part hereof, together with all appurtenances thereto and improvements thereon (the “ Property ”). In the event that the Optionee elects to use the Property for a mixed-use project that is substantially comprised of residential units sold on an individual basis (the “ Residential Uses ”) as a Non-Gaming Use, the Optionee may elect to acquire fee simple title to the Property from the Owner.”
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b. Section 3 is amended to add the following new paragraph to the end of the section:
“If the Optionee elects to acquire the Property for the Residential Uses in fee simple interest as herein provided, the Optionee shall provide its written notice of such election to the Owner (“Fee Option Notice”) within the Option Term or the Renewal Term. Upon receipt of the Fee Option Notice by Owner, the parties shall agree to a closing date to be set not later than ninety (90) days from the date of the Fee Option Notice. The purchase price for the fee simple interest in the Property shall be determined in accordance with the Appraisal Procedure in Section 3.5 of the Ground Lease for determining the fair market value of the Property for Non-Gaming Uses except that such provisions shall be applied as closely as possible to a fee valuation rather than a leasehold valuation as therein stated. Optionee shall acquire a marketable fee simple interest title in the Property in accordance with Section 5.2 of this Option.”
c. Section 5.2 is amended to add the following to the end thereof:
“In the event that Optionee has elected to acquire fee simple interest in the Property for Residential Uses, then Owner shall convey marketable fee simple interest to Optionee by Special Warranty Deed which title shall be insured by a title insurance policy insuring such title subject only to such encumbrances and exceptions as are reasonably acceptable to Optionee. All taxes, fees, costs and expense items related to the Property shall be prorated between the parties as of the closing date and in the customary manner of the St. Louis City area for commercial transactions of this nature. Otherwise all provisions applicable to the transfer of the leasehold title as set out herein shall be reasonably adopted between the parties to apply as closely as possible to a fee transaction rather than a leasehold transfer unless otherwise agreed by both parties.”
4. Amendment to Ground Lease .
a. Section 3.1 of the Ground Lease entitled: “Definitions” shall be amended by adding the following definition immediately following “Option Notice”:
“Rent Notification Date” shall mean the later of (i) two (2) business days after approval of the preliminary site plan by MGC or (ii) thirty days after commencement of the Appraisal Procedure.
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b. Section 3.5 of the Ground Lease entitled: “Market Rental Rate” Determination for Non-Gaming Use” shall be amended as follows: