UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to________
Commission File No. 1-6697
Mirage Resorts, Incorporated
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Nevada 88-0058016
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3400 Las Vegas Boulevard South, Las Vegas, Nevada 89109
--------------------------------------------------------
(Address of principal executive offices - Zip Code)
(702) 791-7111
----------------------------------------------------
(Registrant's telephone number, including area code)
---------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Common Stock, $0.008 par value,
92,197,499 shares outstanding as of May 9, 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed consolidated financial information as of March 31, 1996
and for the three-month periods ended March 31, 1996 and 1995 included in this
report was reviewed by Arthur Andersen LLP, independent public accountants, in
accordance with the professional standards and procedures established for such
reviews by the American Institute of Certified Public Accountants.
<PAGE>
REVIEW REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------------
To the Directors and Stockholders
of Mirage Resorts, Incorporated
We have reviewed the accompanying condensed consolidated balance sheet of Mirage
Resorts, Incorporated (a Nevada corporation) and subsidiaries (the "Company") as
of March 31, 1996, and the related condensed consolidated statements of income
and cash flows for the three-month periods ended March 31, 1996 and 1995. These
consolidated financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Mirage Resorts, Incorporated and
subsidiaries as of December 31, 1995, and the related consolidated statements of
income, stockholders' equity and cash flows for the year then ended (not
presented herein), and, in our report dated February 9, 1996, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet of Mirage Resorts, Incorporated and subsidiaries as of December 31, 1995,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
May 6, 1996
2
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
BALANCE SHEETS
- --------------------------------------------------------------------------------
<CAPTION>
At March 31, At December 31,
1996 1995
- --------------------------------------------------------------------------------
(In thousands) (Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 50,808 $ 48,026
Receivables, net of allowance for doubtful
accounts of $53,020 and $47,161 92,258 76,859
Inventories 26,601 25,601
Deferred income taxes 20,785 42,553
Prepaid expenses and other 17,727 21,777
- --------------------------------------------------------------------------------
Total current assets 208,179 214,816
Property and equipment, net of accumulated
depreciation of $494,791 and $473,801 1,467,541 1,439,517
Other assets, net 140,324 137,380
- --------------------------------------------------------------------------------
$1,816,044 $1,791,713
================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 71,519 $ 84,831
Accrued expenses 97,306 89,005
Current maturities of long-term debt 421 515
- --------------------------------------------------------------------------------
Total current liabilities 169,246 174,351
Long-term debt, net of current maturities 209,544 248,548
Other liabilities, including deferred income
taxes of $142,375 and $148,615 153,232 159,471
- --------------------------------------------------------------------------------
Total liabilities 532,022 582,370
- --------------------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity
Common stock: 92,070 and 91,671 shares
outstanding 940 940
Additional paid-in capital and other 718,624 710,816
Retained earnings 714,757 650,170
Treasury stock, at cost: 25,504 and 25,903
shares (150,299) (152,583)
- --------------------------------------------------------------------------------
Total stockholders' equity 1,284,022 1,209,343
- --------------------------------------------------------------------------------
$1,816,044 $1,791,713
================================================================================
See note to condensed consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
STATEMENTS OF INCOME (Unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
Three months ended March 31 1996 1995
- --------------------------------------------------------------------------------
(In thousands, except per share amounts)
<S> <C> <C>
Gross revenues $408,668 $383,413
Less-promotional allowances (34,460) (30,475)
- --------------------------------------------------------------------------------
374,208 352,938
- --------------------------------------------------------------------------------
Costs and expenses
Casino-hotel operations 208,252 200,099
General and administrative 37,990 37,810
Depreciation and amortization 22,143 21,041
Corporate expense 7,699 8,431
- --------------------------------------------------------------------------------
276,084 267,381
- --------------------------------------------------------------------------------
Operating income 98,124 85,557
- --------------------------------------------------------------------------------
Other income and (expense)
Interest and other income 462 2,861
Interest cost (6,720) (9,597)
Interest capitalized 4,024 2,359
Other 6,615 10
- --------------------------------------------------------------------------------
4,381 (4,367)
- --------------------------------------------------------------------------------
Income before income taxes and extraordinary item 102,505 81,190
Provision for income taxes (37,918) (29,529)
- --------------------------------------------------------------------------------
Income before extraordinary item 64,587 51,661
Extraordinary item-loss on early retirement
of debt, net of applicable income tax benefit - (6,785)
- --------------------------------------------------------------------------------
Net income $ 64,587 $ 44,876
================================================================================
Income per share of common stock
Income before extraordinary item $ 0.66 $ 0.54
Extraordinary item-loss on early retirement
of debt, net of applicable income tax benefit - (0.07)
- --------------------------------------------------------------------------------
Net income per share of common stock $ 0.66 $ 0.47
================================================================================
See note to condensed consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
STATEMENTS OF CASH FLOWS (Unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
Three months ended March 31 1996 1995
- --------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Cash flows from operating activities
Net income $ 64,587 $ 44,876
Adjustments to reconcile net income to net
cash provided by operating activities
Provision for losses on receivables 6,043 7,289
Depreciation and amortization of property
and equipment, including amounts reported
as corporate expense 23,579 22,050
Amortization of debt discount and issuance
costs 3,496 3,143
Gain on sale of investment in Casino Iguazu (8,006) -
Loss on early retirement of debt - 10,439
Deferred income taxes 15,528 11,549
Changes in assets and liabilities
Increase in receivables and other current
assets (18,392) (16,436)
Increase (decrease) in trade accounts
payable and accrued expenses (7,400) 2
Other (1,203) (571)
- --------------------------------------------------------------------------------
Net cash provided by operating activities 78,232 82,341
- --------------------------------------------------------------------------------
Cash flows from investing activities
Capital expenditures (55,810) (24,025)
Joint venture and other equity investments (937) (18,387)
Proceeds from sale of investment in Casino
Iguazu 12,500 -
Other 2,680 48
- --------------------------------------------------------------------------------
Net cash used for investing activities (41,567) (42,364)
- --------------------------------------------------------------------------------
Cash flows from financing activities
Net reduction in bank credit facility and
commercial paper borrowings (41,882) (20,000)
Other reductions in debt (95) (15,353)
Exercise of common stock options, including
related income tax benefit 8,200 1,592
Other (106) (27)
- --------------------------------------------------------------------------------
Net cash used for financing activities (33,883) (33,788)
- --------------------------------------------------------------------------------
See note to condensed consolidated financial statements.
</TABLE>
5
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
STATEMENTS OF CASH FLOWS (Unaudited) - Cont.
- --------------------------------------------------------------------------------
<CAPTION>
Three months ended March 31 1996 1995
- --------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Cash and cash equivalents
Increase for the period $ 2,782 $ 6,189
Balance, beginning of period 48,026 47,142
- --------------------------------------------------------------------------------
Balance, end of period $ 50,808 $ 53,331
================================================================================
Supplemental cash flow disclosures
Cash paid during the period for
Interest, net of amounts capitalized $ 1,564 $ 3,961
Income taxes 5,000 -
- --------------------------------------------------------------------------------
See note to condensed consolidated financial statements.
</TABLE>
6
<PAGE>
NOTE TO CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Mirage Resorts, Incorporated (the "Company"), through wholly owned Nevada
subsidiaries, owns and operates some of the most successful casino-based
entertainment resorts in the world. These resorts include The Mirage and
Treasure Island on the Las Vegas Strip, the Golden Nugget in downtown Las Vegas
and the Golden Nugget-Laughlin in Laughlin, Nevada. The Company is also
constructing Bellagio, a major new 3,000-guest room luxury hotel, casino and
resort facility, on 120 acres near the center of the Las Vegas Strip.
Additionally, the Company is a 50% partner in a joint venture that is
constructing Monte Carlo, a 3,024-guest room, mid-priced resort on 46 acres
located adjacent to the Bellagio site.
The condensed consolidated financial statements have been prepared in accordance
with the accounting policies described in the Company's 1995 Annual Report on
Form 10-K and should be read in conjunction with the Notes to Consolidated
Financial Statements which appear in that report. The Condensed Consolidated
Balance Sheet at December 31, 1995 was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
interim periods have been included. The interim results reflected in the
condensed consolidated financial statements are not necessarily indicative of
expected results for the full year.
Certain amounts in the 1995 condensed consolidated financial statements have
been reclassified to conform with the 1996 presentation. These reclassifications
had no effect on the Company's net income.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Comparison of Operating Results for the Three-Month Periods Ended March 31, 1996
and 1995
RESULTS OF OPERATIONS
<TABLE>
Financial Highlights
<CAPTION>
% Increase
Three months ended March 31 1996 1995 (Decrease)
- --------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C>
Gross revenues
The Mirage $227,238 $215,555 5.4 %
Treasure Island 105,009 98,259 6.9 %
Golden Nugget 59,681 52,697 13.3 %
Golden Nugget-Laughlin 16,740 16,902 (1.0)%
- --------------------------------------------------------------------------------
$408,668 $383,413 6.6 %
- --------------------------------------------------------------------------------
Net revenues
The Mirage $207,487 $198,144 4.7 %
Treasure Island 96,959 91,447 6.0 %
Golden Nugget 54,668 48,010 13.9 %
Golden Nugget-Laughlin 15,094 15,337 (1.6)%
- --------------------------------------------------------------------------------
$374,208 $352,938 6.0 %
- --------------------------------------------------------------------------------
Operating income
The Mirage $ 62,812 $ 58,875 6.7 %
Treasure Island 25,884 22,653 14.3 %
Golden Nugget 14,461 9,886 46.3 %
Golden Nugget-Laughlin 2,666 2,574 3.6 %
Corporate expense (7,699) (8,431) (8.7)%
- --------------------------------------------------------------------------------
$ 98,124 $ 85,557 14.7 %
- --------------------------------------------------------------------------------
Operating margin (operating income/net revenues)
The Mirage 30.3% 29.7% 0.6 pts
Treasure Island 26.7% 24.8% 1.9 pts
Golden Nugget 26.5% 20.6% 5.9 pts
Golden Nugget-Laughlin 17.7% 16.8% 0.9 pts
Company-wide 26.2% 24.2% 2.0 pts
- --------------------------------------------------------------------------------
Income before extraordinary item $ 64,587 $ 51,661 25.0 %
Net income $ 64,587 $ 44,876 43.9 %
- --------------------------------------------------------------------------------
Income per share before extraordinary item $ 0.66 $ 0.54 22.2 %
Net income per share $ 0.66 $ 0.47 40.4 %
- --------------------------------------------------------------------------------
Company-wide table games win percentage 21.5% 22.2% (0.7)pts
Company-wide occupancy of standard guest rooms 99.3% 98.5% 0.8 pts
- --------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
Income before extraordinary and non-recurring items during the 1996 first
quarter set a new quarterly record for the Company, surpassing the previous
record set in the prior year's first quarter. Excluding a gain on the sale of
the Company's 50% equity interest in a small casino near Iguazu Falls,
Argentina, earnings per share were $0.61, versus $0.54 before extraordinary item
in the 1995 first quarter.
Overall, the Company's operating income increased 14.7%. This increase is
particularly noteworthy given the exceptionally high table games win percentage
of 22.2% in the prior year's quarter. The table games win percentage in the 1996
first quarter was 21.5%. By comparison, the Company-wide win percentage for the
full years 1995 and 1994 was 20.2% and 18.8%, respectively.
Operating income at all four of the Company's resorts increased over last year's
first quarter. Three of the four set new records for operating income.
The Mirage had the best quarter in its six-year history. Despite a decline in
the table games win percentage, casino revenues approximately equaled the strong
results of the 1995 first quarter, principally reflecting a 5.9% increase in
slot revenues. Led by a $5.3 million increase in room revenues, net non-casino
revenues at The Mirage grew by 13.1%. Between late February and mid-August 1995,
all 2,765 standard guest rooms and 61 of the 279 suites at The Mirage were
significantly refurbished and enhanced. This project resulted in 8% more
available room nights during the 1996 first quarter. The substantial improvement
in the quality of The Mirage's guest rooms allowed the facility to achieve
increases in both the average room rate and occupancy. Occupancy of available
standard guest rooms was 99.1%, versus 98.3% in the prior year's first quarter.
Treasure Island also had the best quarter in its history. Strong increases in
room rates and slot and entertainment revenues primarily accounted for the
increase in revenues and operating income. Treasure Island's operating income
has increased over the prior year's quarter in each of the five full quarters
since its first anniversary.
The success of the Fremont Street Experience, which opened in early December
1995, was readily apparent in the Golden Nugget's first quarter results. The
Golden Nugget had the highest quarterly room and slot revenues in its 49-year
history. Occupancy of available standard guest rooms was 99.0%, versus 97.4% in
the 1995 first quarter, and the average standard room rate increased by over
20%. The level of slot play was up 16.3%.
The Golden Nugget-Laughlin also had the highest quarterly operating income in
its history. Revenues during the 1996 quarter were comparatively flat. However,
a decline in depreciation and amortization expense resulted in an improvement in
the facility's operating margin.
OTHER FACTORS AFFECTING EARNINGS
Corporate expense declined by 8.7%, due largely to a greater concentration on
developing resorts in existing gaming jurisdictions rather than pursuing
projects in potential new jurisdictions.
Despite accelerating construction expenditures, the Company's debt levels
continued to decline. Total indebtedness at March 31, 1996 was $210.0 million,
versus $330.8 million at quarter-end 1995. This decline, together with an
increase in interest capitalized, resulted in a $4.5 million, or 62.8%, decrease
in interest expense.
9
<PAGE>
As noted previously, during the 1996 first quarter the Company sold its 50%
equity interest in a small casino located near Iguazu Falls, Argentina. The
casino opened in July 1994 with a total investment by the Company of $4.0
million. Although the casino was quite profitable, contributing $1.4 million (on
a pre-tax basis) to the Company's 1995 annual operating results, management
determined that the facility was not capable of being expanded into a resort of
meaningful size to the Company. Consequently, the Company's interest was sold
for $12.5 million in cash, resulting in a pre-tax gain of $8.0 million. Such
gain is included in the "Other" caption in the accompanying Condensed
Consolidated Statements of Income.
In March 1995, the Company called for redemption the remaining $126.0 million
principal amount of the 9 7/8% first mortgage notes associated with The Mirage
and Treasure Island. Although this early retirement was financially advantageous
to the Company, the call premium and the write-off of the related unamortized
debt issuance costs resulted in an extraordinary charge of $6.8 million ($0.07
per share) during the 1995 first quarter.
CAPITAL RESOURCES, CAPITAL SPENDING AND LIQUIDITY
During the first quarter of both 1996 and 1995, cash flow from operations was
the Company's principal source of funds for capital expenditures, investments,
debt repayments and other corporate requirements. Cash provided by operating
activities (as shown in the accompanying Condensed Consolidated Statements of
Cash Flows) was $78.2 million during the 1996 first quarter, versus $82.3
million in the prior year's quarter.
Capital expenditures during the 1996 first quarter totaled $55.8 million. This
amount includes $19.8 million, including capitalized interest of $2.3 million,
associated with the construction of Bellagio. Capital expenditures also include
$12.7 million for the acquisition of land for potential future development. The
remaining $23.3 million of capital expenditures during the 1996 first quarter
primarily reflect maintenance capital spending at the Company's four facilities
as well as various enhancement projects at The Mirage. These projects include
upgrading the special effects at the resort's volcano attraction and the
construction of an animal habitat that will allow guests to view the beautiful
exotic animals of Siegfried & Roy. Capital expenditures do not include amounts
relating to the construction of Monte Carlo, as such project is being built by a
50%-owned unconsolidated joint venture.
Capital expenditures during the 1995 first quarter totaled $24.0 million. Of
this amount, approximately $12.0 million relates to the guest room
enhancement program at The Mirage. A significant portion of the remaining amount
relates to the design and development of Bellagio.
Management expects the Company's future capital spending to increase
significantly with the ongoing construction of Bellagio and the commencement of
construction of its planned resort hotel-casino in Biloxi, Mississippi. Bellagio
is currently expected to cost approximately $1.1 billion (excluding land and
capitalized interest) and is scheduled to open in the spring of 1998. At March
31, 1996, the Company had incurred approximately $37.1 million of such amount.
The Biloxi facility is still in the design process, but major construction is
anticipated to begin in July 1996 with completion scheduled for early 1998 at a
total cost, excluding land and capitalized interest, of approximately $325
million. Including land and capitalized interest, Bellagio is expected to cost
between $1.2 billion and $1.3 billion and the Biloxi project is expected to cost
10
<PAGE>
approximately $375 million.
The level of future capital spending will increase further should the Company
proceed with its proposed 2,000-guest room, luxury resort hotel-casino in
Atlantic City, New Jersey. Management currently expects the project to cost
approximately $700 million and intends to begin construction in the fall of
1996. Construction is expected to require 24 to 30 months to complete. However,
because the project has not yet been designed, the actual project cost may be
significantly different and the construction schedule may vary from that which
is currently contemplated. Additionally, construction of the project is subject
to a number of conditions, including the receipt of all requisite licenses,
permits, allocations and authorizations, resolution of real estate title issues,
the Company determining that the costs of environmental remediation are not
unreasonable and the approval by the State of New Jersey of funding for certain
roadway improvements affecting the site. Accordingly, there can be no assurance
as to whether or when the Company will proceed with the project.
During the 1996 first quarter, the Company expended $41.9 million to repay bank
credit facility and commercial paper borrowings outstanding at December 31,
1995. There were no bank credit facility or commercial paper borrowings
outstanding at March 31, 1996. Debt repayments during the 1995 first quarter
totaled $35.4 million. These repayments principally consisted of a $20.0 million
net reduction in amounts outstanding under the Company's bank credit facility
and a $14.6 million prepayment of its floating rate aircraft loan.
Management believes that the Company's existing cash balances, anticipated
operating cash flow and amounts available under its $1 billion bank credit
facility will be sufficient to meet its future debt obligations and fund
construction of the Bellagio and Biloxi projects. Depending on which other
projects are undertaken by the Company as well as the ultimate size and timing
of such projects, construction of other facilities, including those contemplated
in New Jersey, may require additional financing.
PRIVATE SECURITIES LITIGATION REFORM ACT
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this Form 10-Q
and other materials filed or to be filed by the Company with the Securities and
Exchange Commission (as well as information included in oral statements or other
written statements made or to be made by the Company) contains statements that
are forward-looking, such as statements relating to plans for future expansion
and other business development activities as well as other capital spending,
financing sources and the effects of regulation (including gaming and tax
regulation) and competition. Such forward-looking information involves important
risks and uncertainties that could significantly affect anticipated results in
the future and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those relating to development and
construction activities, dependence on existing management, leverage and debt
service (including sensitivity to fluctuations in interest rates), domestic or
global economic conditions, changes in federal or state tax laws or the
administration of such laws and changes in gaming laws or regulations (including
the legalization of gaming in certain jurisdictions).
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
10.1 An Agreement Between the City of Atlantic City and Mirage Resorts,
Incorporated for the Development of the Huron North Redevelopment
Area, dated May 3, 1996 (without exhibits).
10.2 Completion Guaranty by the Registrant in favor of the City of Atlantic
City, dated as of May 3, 1996.
11 Mirage Resorts, Incorporated - Computation of Net Income Per Share of
Common Stock for the three-month periods ended March 31, 1996 and
1995.
15 Letter from independent public accountants acknowledging awareness of
the use of their report dated May 6, 1996 in the Registrant's
registration statements.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
The Registrant filed no reports on Form 8-K during the three-month
period ended March 31, 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mirage Resorts, Incorporated
May 10, 1996 By: DANIEL R. LEE
- ------------ -------------------------------------------
Date Daniel R. Lee
Senior Vice President - Finance and
Development, Chief Financial Officer
and Treasurer (Principal Financial Officer)
13
AN AGREEMENT BETWEEN THE CITY OF ATLANTIC CITY
AND MIRAGE RESORTS, INCORPORATED FOR THE
DEVELOPMENT OF THE HURON NORTH REDEVELOPMENT AREA
<PAGE>
TABLE OF CONTENTS
Page No.
SECTION 1. Initial Recitals............................. 1
SECTION 2. Definitions.................................. 3
2.0 Governing Definitions...................... 3
SECTION 3. Project Identification....................... 6
3.0 Purpose................................... 6
3.1 The Project............................... 6
3.2 The Redeveloper........................... 7
3.3 The City.................................. 7
3.4 The Site.................................. 7
SECTION 4. Environmental Issues......................... 8
4.0 Environmental Issues....................... 8
4.1 Current Status............................. 8
4.1.1 Landfill Investigation................... 8
4.1.2 Wetlands Investigation.................. 9
4.1.3 Other Environmental Assessments......... 9
4.1.4 Availability of Environmental
Data to City............................. 10
4.1.4.1. Release of Reports and Opinions...... 11
4.1.4.2 Prior Environmental Studies........... 11
4.2 Remediation Activities................... 11
4.3 Remediation Costs......................... 12
4.3.1 Availability of Funds - Other Sources... 12
4.3.1.1. Sharing Formula...................... 13
4.3.1.2. Use of Funds by City................. 13
4.3.2. Costs on Abandonment or Default........ 14
<PAGE>
4.4 Governmental Approvals................... 14
4.5 Hold Harmless Provision................... 15
SECTION 5. Development of Project....................... 16
5.0 General................................... 16
5.1 Covenant to Convey........................ 16
5.1.1 Conveyance of Project Parcels........... 17
5.1.2 Closing Date............................ 17
5.1.2.1 Authorization to Convey................ 18
5.1.3 Closing................................. 18
5.1.4 Site Preparation Prior to Closing Date... 19
5.1.4.1 Indemnification and
Non-Interference..................... 20
5.1.5 Existing Leases......................... 20
5.2 Project Schedule........................... 21
5.2.1. Necessary Governmental Approvals....... 21
5.2.2 Commencement of Project................. 22
5.2.3 Completion of Project.................. 22
5.3 Construction Assurances................... 22
5.3.1 Redeveloper Default..................... 22
5.3.1.1 Default Events....................... 23
5.3.1.2 Default Notice........................ 23
5.3.1.3 Default Remedies...................... 24
5.4 Tax Assessments........................... 24
5.4.1 Assessment During Construction.......... 25
5.4.2 Valuation Method........................ 25
5.5 Subsequent Conveyance by Redeveloper...... 25
5.6 Assignment to Subsidiary.................. 26
<PAGE>
SECTION 6. Relocation of City Facilities................ 27
6.0 City Facilities Defined................... 27
6.1 Relocation................................ 27
6.2 Assistance From City...................... 28
6.3 Configuration............................. 28
6.4 Redeveloper's Rights Prior
to Relocation............................. 29
6.5 Cost of Relocation........................ 29
6.6 Other Limitations......................... 29
SECTION 7. Title Issues................................. 30
7.0 Title Issues Generally.................... 30
7.1 State Title Issues........................ 31
7.2 Tax Foreclosure Issues.................... 32
7.3 Vacation of Streets....................... 33
7.4 Deed Restrictions......................... 33
7.5 Undetermined Title Issues................. 34
SECTION 8. Neighborhood Issues ......................... 35
8.0 Neighborhood Impacts...................... 35
8.1 Traffic................................... 35
8.1.1 Roadway Connector....................... 35
8.1.2 Conditions Precedent.................... 36
8.1.3 Roadway Connector Limitation............ 36
8.2 Rodent, Insect and Animal
Control................................... 37
8.3 Illumination, Noise and Pollution......... 37
8.4 Security and Safety....................... 37
8.5 Surrounding Housing Preserved............. 38
SECTION 9. Jobs and Business Opportunities.............. 39
<PAGE>
9.0 Purpose................................... 39
9.1 Redeveloper's Commitment.................. 39
9.2 Redeveloper's Commitment Goals............ 40
SECTION 10. Miscellaneous ............................... 41
10.0 Outparcels............................... 41
10.1 Utilities................................ 41
10.2 Billboards............................... 41
10.3 Jitney and Other Transit Service......... 42
10.4 Force Majeure............................ 42
10.5 Agreement Provisions..................... 42
10.5.1 Paragraph Headings..................... 42
10.5.2 Governing Law.......................... 42
10.5.3 Amendments to Agreement................ 44
10.5.4 Severability........................... 44
10.5.5 Incorporation of Recitals.............. 44
10.6 Condemnation/Casualty.................... 44
10.7 Cooperation By City...................... 45
10.8 Notices.................................. 45
<PAGE>
EXHIBITS
EXHIBIT A
Request for Qualifications issued by the City of
Atlantic City dated April 13, 1995
EXHIBIT B
Legal Description of Project Parcels
EXHIBIT C
Project Schedule
EXHIBIT D
"Intentionally Deleted"
EXHIBIT E
Project Description Materials
EXHIBIT F
City's Requirements for Relocation of City Facilities
EXHIBIT G
Portion of the Official Tax Map of the City of Atlantic
City which shows the Site
EXHIBIT H
Description of Streets to be Vacated
EXHIBIT I
Schedule of Outparcels
EXHIBIT J
Memo of Kenneth Platt dated February 13,1996
EXHIBIT K
Redeveloper's Recitation of Employment
Methods and Goals
EXHIBIT L
The Redevelopment Plan for the Huron North
Redevelopment Area
EXHIBIT M
Mirage Resorts, Incorporated Presentation on
Transportation Alternatives for the Marina/Midtown
Connector Improvement before the Governor's
Atlantic City Transportation Access Task Force
EXHIBIT N
Memorandum of Understanding (MOU) between the City
of Atlantic City and Mirage Resorts, Incorporated,
dated February 21, 1996
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EXHIBIT O
Completion Guaranty
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1. INITIAL RECITALS
THIS AGREEMENT known as "AN AGREEMENT BETWEEN THE CITY
OF ATLANTIC CITY AND MIRAGE RESORTS, INCORPORATED FOR THE
DEVELOPMENT OF THE HURON NORTH REDEVELOPMENT AREA" is made
this 3 day of May, 1996 by and between the City of
Atlantic City (the "City") and Mirage Resorts, Incorporated
(the "Redeveloper"), in consideration of the provisions set
forth hereinafter and the mutual promises contained therein,
as well as in the exhibits attached hereto.
WHEREAS the City is a political subdivision of the
State of New Jersey, located in the County of Atlantic, with
offices located at 1301 Bacharach Boulevard, Atlantic City ,
New Jersey 08401; and
WHEREAS the Redeveloper is a corporation formed under
the laws of the State of Nevada, with corporate offices
located at 3400 Las Vegas Boulevard South, Las Vegas,
Nevada 89109; and
WHEREAS the City is the owner of approximately 150
acres of undeveloped real property located in an area
bounded by Huron Avenue to the South, Atlantic-Brigantine
Boulevard and Massachusetts Avenue to the East, Clam
Thorofare and the Penrose Canal to the North and Absecon
Boulevard to the West (the "Site"); and
WHEREAS the Site represents one of the last remaining
large developable sites in the City; and
WHEREAS despite the pro-development zoning governing
the Site since 1929, the Site remains a vacant, fallow and
under-utilized tract of land and neither a variety of zoning
scenarios nor individual public or private initiatives have
resulted in any meaningful development within the boundaries
of the Site; and
WHEREAS in a further effort to stimulate development of
the Site, the City has designated the Site, which is also
known as the "Huron North Redevelopment Area", as an area in
need of redevelopment pursuant to N.J.S.A. 40A:12A-4; and
WHEREAS the Atlantic City Planning Board (the "Board")
was directed to prepare a Redevelopment Plan for the Site;
and
WHEREAS on or about March 9, 1995, the Board submitted
a Redevelopment Plan to the City and advised the City that
the Redevelopment Plan was consistent with the City Master
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Plan and, thereafter, on or about March 15, 1995, the City,
by ordinance, adopted the proposed Redevelopment Plan; and
WHEREAS the purpose of the Redevelopment Plan is to
provide the mechanism, by the conveyance of City-owned land,
for a public/private partnership leading to the development
of a "world class" entertainment/recreation complex located
on the Site, in order to stimulate new markets and
strengthen and diversify the City's economic base, providing
commercial facilities for year-round tourist and family
attractions, increased employment opportunities and the
generation of new hotel rooms, all of which maximizes tax
revenue and generates tax ratables by the return to the
active tax roles of land currently under public ownership;
and
WHEREAS the City has on April 13,1995 sought a request
for qualifications ("RFQ") from interested developers for
the purpose of entering into an agreement to redevelop the
Site in accordance with the Redevelopment Plan; and
WHEREAS the Redeveloper has responded to the RFQ with a
submission to the City dated July 12, 1995, which envisions
a development for the Site which contains numerous elements
including, but not limited to, a casino hotel; and
WHEREAS the City, by action of the governing body of
the City on or about September 6, 1995 designated the
Redeveloper to undertake the redevelopment of the Site as
set forth in the RFQ and consistent with the Redevelopment
Plan and the Redeveloper's initial development and design
concepts for the Site; and
WHEREAS pursuant to that designation and the RFQ, the
City and the Redeveloper have entered into a Memorandum of
Understanding ("MOU") dated February 21, 1996 with regard to
the issues and items that should be addressed in the
development of the Site; and
WHEREAS the City and the Redeveloper, as required by
the RFQ, desire to fully and thoroughly address the issues
and items involving the development of the Site by way of a
Redeveloper's Agreement; and
WHEREAS the City and the Redeveloper acknowledge that
the mutual promises contained in this Agreement are good and
valuable consideration for the binding execution of this
Agreement;
IT IS ON THE DATE STATED ABOVE AGREED BY AND BETWEEN
THE CITY AND THE REDEVELOPER AS FOLLOWS:
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2. DEFINITIONS
2.0 Governing Definitions. When used in this Agreement
the following words, phrases or terms shall have the
meanings set forth in the subsections which follow.
2.1.1 Agreement or this Agreement shall mean the
instant document which is entitled "An Agreement Between the
City of Atlantic City and Mirage Resorts, Incorporated for
the Development of the Huron North Redevelopment Area".
2.1.2 Board or the Board shall mean the Atlantic City
Planning Board.
2.1.3 CAFRA shall mean the New Jersey Coastal Area
Facility Review Act, N.J.S.A. 13:19-1 et seq.
2.1.4 City or the City shall mean The City of Atlantic
City by and through its governing body and shall include all
agencies, departments, boards or other subdivisions thereof
unless otherwise stated.
2.1.5 City Facilities shall have the meaning defined in
paragraph 6.0 of this Agreement.
2.1.6 Closing Date shall have the meaning defined in
paragraph 5.1.2 of this Agreement.
2.1.7 Commence Construction, Commences Construction,
Commencing Construction or Commenced Construction shall have
the same meaning as defined for the term Commence
Construction in paragraph 5.2.2 of this Agreement.
2.1.8 Default or in Default shall have the meaning
defined in paragraph 5.3.2 of this Agreement.
2.1.9 Default Notice shall mean such notice from the
City to the Redeveloper as defined in paragraph 5.3.2.2.
2.1.10 Environmental Data shall have the meaning
defined in paragraph 4.1.4 of this Agreement.
2.1.11 Environmental Reports shall have the meaning
defined in paragraph 4.1.4 of this Agreement.
2.1.12 LOI shall mean a wetlands regulatory line
verification letter of interpretation from NJDEP pursuant to
N.J.A.C 7:7-8.3.
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2.1.13 Memorandum of Understanding or MOU shall mean
the letter memorandum of understanding entered into between
the City and the Redeveloper dated February 21, 1996 and
attached as Exhibit N.
2.1.14 Mirage Resorts, Incorporated shall mean the
corporation formed under the laws of the State of Nevada
known by that name, with corporate offices located in Las
Vegas, Nevada and also referred to in this Agreement as the
Redeveloper.
2.1.15 NJDEP shall mean the New Jersey Department of
Environmental Protection.
2.1.16 Outparcels shall have the meaning defined in
paragraph 10.0 and as set forth on Exhibit I of this
Agreement.
2.1.17 Parties or the Parties shall mean both the City
(as defined in this Agreement) and Mirage Resorts,
Incorporated together and shall not refer to any other
person or entity.
2.1.18 Project or the Project shall mean that which is
identified in paragraph 3.1 and on Exhibit E to this
Agreement.
2.1.19 Project Parcel or Project Parcels shall mean all
that land and premises set forth on Exhibit B to this
Agreement and identified in paragraph 5.1.1.
2.1.20 Project Schedule shall have the meaning defined
in paragraph 5.2 and Exhibit C of this Agreement.
2.1.21 Redeveloper or the Redeveloper shall mean Mirage
Resorts, Incorporated.
2.1.22 Redevelopment Plan or Plan shall mean the plan
adopted by the City on or about March 15, 1995, and as may
be amended in accordance with the terms of this Agreement,
wherein the City designated the Site as an area in need of
redevelopment pursuant to N.J.S.A. 40A:12A-4, and attached
to this Agreement as Exhibit "L".
2.1.23 Relocation when used in reference to the Public
Works Facilities addressed in section 6 of this Agreement
shall have the meaning defined in paragraph 6.1 of this
Agreement.
2.1.24 Relocation Parcel shall mean that which is
defined in paragraph 6.1(1).
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2.1.25 Remediation when used in section 4 of this
Agreement (Environmental Issues) shall mean any clean up,
correction or adjustment to any environmental contamination
or environmental damage to any natural resource including
but not limited to air, groundwater, surface water, or soil
deemed necessary and advisable by the Redeveloper in order
for the Redeveloper to move forward with the Project.
2.1.26 RFQ shall mean the Request for Qualifications
issued by the City on April 13,1995 and attached hereto as
Exhibit A.
2.1.27 Site or the Site shall mean all that land and
premises identified in the RFQ as the "Project Area" and
generally bounded by Absecon Boulevard, Huron Avenue,
Brigantine Boulevard, Massachusetts Avenue, Clam Thorofare
and Penrose Canal and also referred to as the Huron North
Redevelopment Area.
2.1.28 Site Preparation shall have the meaning defined
in paragraph 5.1.4 of this Agreement.
2.1.29 State Task Force shall mean the State of New
Jersey Governor's Atlantic City Transportation Access Task
Force.
2.1.30 Third Party or Third Parties shall mean any
person or entity other than the City or the Redeveloper as
defined in this Agreement.
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3. PROJECT IDENTIFICATION
3.0 Purpose. The purpose of this Agreement is to
address and memorialize the items set forth in the
Memorandum of Understanding entered into by the City and the
Redeveloper on February 21, 1996, attached hereto as Exhibit
N which sets forth the issues to be addressed in the
development of the Site, and such other issues as may be
appropriate for the Project. The Redeveloper has been
selected by the City through a resolution adopted on
September 6, 1995, wherein the City chose the Redeveloper to
be the developer of the Site after the submission of
qualifications by the Redeveloper and others in response to
the RFQ issued by the City.
3.1 The Project. The Project which is the subject of
this Agreement shall generally consist of the initial
development and design concept submitted by the Redeveloper
in response to the RFQ as same may be modified by the
Redeveloper at the time that the Redeveloper submits its
application for development of the Site to the Board. The
Project shall include one or more casino hotels as the
Redeveloper may determine in its discretion, but in no event
shall the application for development of the Site to the
Board include a Project which calls for any less then one
casino hotel to be located on the Site. The Redeveloper, in
response to the RFQ, has submitted to the City an initial
development and design concept featuring a multi-faceted
development for the Site which included one or more casino
hotels and which would transform the Site in a fashion
sought by the City in the RFQ. The Redeveloper's initial
development and design concept is more specifically
described in documents and other material attached hereto as
Exhibit E. The City acknowledges and agrees that the
materials comprising Exhibit E are merely preliminary
conceptual designs and proposals based on the Redeveloper's
vision for the Site and that the Project will be more fully
described and formalized as the design process of the
Redeveloper proceeds. The City, however, agrees that the
present state of the description of the Project is within
the framework of the RFQ and that it meets the criteria set
forth therein for the development of the Site. However, if
modified by the Redeveloper, the Project shall be
substantially similar to the initial development and design
concept and consistent with the goals set forth in the RFQ
and the Redevelopment Plan. Furthermore, the Redeveloper
acknowledges that it will be required to comply with the
provisions of the Redevelopment Plan which has been adopted
by the City for the Site which will require more detailed
site plans and other documents to be submitted for review by
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the Board. Therefore, the City and the Redeveloper agree to
this Agreement in order to establish the provisions and
considerations which will govern the development of the Site
by the Redeveloper, the conveyance of real property within
certain areas of the Site to the Redeveloper, and the
construction of the Project.
3.2 The Redeveloper. The Redeveloper represents and
warrants that it is a corporation formed under the laws of
the State of Nevada and that it is duly organized and
existing in good standing. Redeveloper further represents
and warrants that it has full power and authority to enter
into this Agreement and to consummate the transactions
contemplated herein. It further warrants that the person
executing this Agreement on its behalf is authorized to do
so and that this Agreement constitutes a valid and legally
binding obligation of Redeveloper.
3.3 The City. The City represents and warrants that
it is the fee owner of the Project Parcels as defined in
this Agreement, and that there are no known defects in title
to those Project Parcels that have not been set forth
herein. Furthermore, the City represents and warrants, to
its knowledge, that there are no steps which may have been
taken by itself or any Third Party, other that those which
may be set forth in this Agreement, to alienate or encumber
the title to those parcels. The City further represents and
warrants that it is undertaking to execute this Agreement in
its capacity as a political subdivision of the State of New
Jersey and the County of Atlantic, as owner of the Project
Parcels and as the designated Redevelopment Agency for the
Site and that this Agreement constitutes a valid and legally
binding obligation of the City.
3.4 The Site. The Site which is the subject of this
Agreement is known as the Huron North Redevelopment Area.
The Site has been designated by the City as an area in need
of redevelopment pursuant to N.J.S.A. 40A:12A-4 et seq.
The Site is the location of the former Atlantic City
landfill and was used by the City as a site for the
deposition of municipal solid waste and construction debris
for many years. The City acquired title to many of the
parcels at the Site through various means and now owns
approximately 150 acres therein. There are several other
parcels within the Site which are owned by private Third
Parties.
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4. ENVIRONMENTAL ISSUES
4.0 Environmental Issues. Pursuant to the RFQ, certain
environmental concerns which may impact the Project have
already been partially addressed by the parties. These
concerns consist of but are not limited to issues which
involve the presence of the former City municipal landfill
on the Site, environmental assessments of the Site, wetlands
delineations of the Site, the existence of underground
storage tanks, environmental concerns related to the
existence of the City public works facilities currently
located on the Site, and potential general Site
contamination and remediation issues. The RFQ acknowledged
that certain environmental concerns were present and made
available to the Redeveloper information from a Fatal Flaw
Analysis performed on the Site. In addition however, the
City and Redeveloper acknowledge that further studies and
investigations have been undertaken by the Redeveloper after
it was designated as such by the City. As a consequence of
those studies and investigations, information has been
obtained by the Redeveloper and reports have been generated
by Redeveloper's consultants and agents which bear upon the
environmental issues on the Site. In addition the City and
Redeveloper acknowledge that further studies and
investigations are required to be performed by the
Redeveloper in order for it to determine whether it will be
able to develop the Project in accordance with the
Redeveloper's initial development and design concept and
this Agreement. Accordingly, the Redeveloper shall have
eighteen (18) months from the date this Agreement is
executed by the Parties and the City's actions in approving
the Agreement become final and unappealable in order to
conduct any further studies and investigations it deems
necessary in order to determine whether it will be able to
develop the Project in accordance with the Redeveloper's
initial development and design concept or such other
development and design concept acceptable to the Redeveloper
and consistent with the RFQ and the Redevelopment Plan.
4.1 Current Status. The City acknowledges that certain
environmental studies and/or investigations are currently
being undertaken by the Redeveloper on the Site for purposes
of proceeding with the Project. These studies are an active
and ongoing process. The City acknowledges and agrees that
all information, whether written or otherwise, generated by
the studies, unless otherwise made available to the City by
the Redeveloper, is the work product of the agents and/or
consultants of the Redeveloper and that such work product is
privileged and confidential. As a consequence the City
agrees not to make a claim against Redeveloper or any of its
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agents or consultants for production of any such work
product except as allowed under the conditions set forth
below in paragraph 4.1.4.
4.1.1 Landfill Investigation. Redeveloper acknowledges
that certain portions of the Site were used in the past as
the City municipal landfill over a period of several
decades, and therefore are likely to require disruption and
remediation in order for the Redeveloper to proceed forward
with the Project. Redeveloper has undertaken steps to
investigate the extent and location of the landfilling
activities and is currently in the process of assessing the
necessity of disrupting and remediating those portions of
the Site in order to be able to proceed with the Project.
The City agrees that it will defer to the Redeveloper with
regard to any decisions which Redeveloper makes in terms of
how areas may need to be remediated so long as the
Redeveloper proceeds with the Project and satisfies any
governmental or regulatory body with respect to the
remediation of the areas of the Site.
4.1.2 Wetlands Investigation. The Redeveloper and the
City acknowledge that there are certain areas of the Site
that may be delineated as either freshwater wetlands ,
pursuant to the New Jersey Freshwater Wetlands Protection
Act, or as coastal wetlands pursuant to other regulatory
requirements. In accordance with that recognition,
Redeveloper has made application to the New Jersey
Department of Environmental Protection ("NJDEP") for a
regulatory line verification letter of interpretation
("LOI") pursuant to N.J.A.C. 7:7A-8.3 in order to establish
the exact location of the wetlands on the Site. The City
acknowledges that it has been notified of such LOI
application and has specifically granted permission for said
filing as property owner of most of the parcels addressed in
that application. The Parties agree that they will take all
necessary steps to obtain the granting of the LOI by NJDEP.
4.1.3 Other Environmental Assessments. The City and
the Redeveloper acknowledge that there may be other areas of
the Site which are subject to investigation and possible
environmental remediation for various reasons. The
Redeveloper represents that it has begun to undertake
efforts to identify such areas of the Site that may impact
the development of the Project. The City agrees that it
will cooperate with the Redeveloper in any such
investigation effort, analysis, application to NJDEP or
other governmental or regulatory body, or any similar
undertaking of the Redeveloper designed to address the
existence of any possible environmental contamination at the
Site. By way of example and not of limitation, such areas
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may include the City's current or past public works
facilities, former City incinerator, police firing range and
police dog training facilities, underground storage tanks,
potential groundwater contamination and possible
geotechnical considerations.
4.1.4 Availability of Environmental Data to City. It
is acknowledged by the parties that as a consequence of the
studies, investigations and other work being performed or to
be performed at the Site by the Redeveloper related to all
environmental issues, certain data, information, studies,
recommendations, analyses, reports or conclusions
("Environmental Data") and written documents which contain
such Environmental Data ("Environmental Reports") will be
generated by Redeveloper, its consultants or other agents.
Both parties acknowledge that these Environmental Data and
Environmental Reports have and will be generated through
legal counsel for the Redeveloper in a confidential manner
in anticipation of the regulatory process and that such data
and reports are, for that reason, privileged documents
pursuant to the attorney-client privilege and/or the
attorney work product doctrine. However, Redeveloper
acknowledges and agrees that the City has an important
interest in acquiring information regarding the condition of
the Site as is necessary to adequately discharge its
obligations as the current owner of the property and
thereafter as a party to this Agreement in order to be
assured that the Site is properly redeveloped. Accordingly,
the Redeveloper and the City agree that the City will be
entitled to receive information from the Redeveloper
regarding Environmental Data generated about the Site in the
following manner. The Redeveloper will discuss with the
City on a regular basis the Environmental Data which it has
in its possession related to the Site. Such discussions
will be limited to the raw data about the conditions of the
Site obtained by Redeveloper's consultants or agents which
such consultants or agents deem to be of significant
importance to the redevelopment of the Site, as well as
general discussions between Redeveloper and the City about
steps Redeveloper intends to undertake to address or
remediate any environmental conditions found at the Site.
The Redeveloper shall also inform the City when it makes any
application to a governmental or other regulatory body with
respect to environmental conditions at the Site and if
necessary for said application, obtain authorization from
the City to do so. The City shall expeditiously provide any
such authorization. Under no circumstances shall
Redeveloper be obligated to inform the City of
recommendations, conclusions or opinions reached by the
Redeveloper or its consultants and agents regarding raw
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data or other Environmental Data except under the conditions
set forth in paragraph 4.1.4.1.
4.1.4.1 Release of Reports and Opinions. The City
shall be entitled to receive, and the Redeveloper shall
release, any recommendations, conclusions, or opinions
Redeveloper obtains from experts or consultants retained by
Redeveloper and any reports containing such recommendations,
conclusions or opinions (hereinafter "opinions or reports"),
only when any of the following occur:
(1) In the event such opinions or reports
are required to be released for purposes of
Redeveloper submitting any applications or
obtaining any permits or other permission
from any governmental entity to perform any work
on any environmental conditions at the Site, the
Redeveloper shall provide the City with a copy of
such documents at the time of such submission, or
(2) In the event that Redeveloper obtains or
receives any final, unappealable permits or
approvals from any governmental authority which
allow it to proceed with certain environmental
work on the Site, the Redeveloper shall permit the
City to review and/or copy any opinions or reports
which it has in its possession that were used in
obtaining said permits or approvals, or
(3) In the event that the Redeveloper is
found to be in material default under this
Agreement and any cure period has elapsed, and the
City takes possession of the Site prior to
completion of the Project in accordance with the
provisions of this Agreement, the City shall be
entitled to receive copies of all Environmental
Data and Environmental Reports in the possession
or control of the Redeveloper regarding the Site.
4.1.4.2 Prior Environmental Studies. The City hereby
warrants that it has previously provided Redeveloper with
any and all Environmental Data and Environmental Reports
concerning the Site known by the current administration of
the City, and hereby further warrants that to the extent
that the City obtains knowledge of or takes possession of
any Environmental Data or Environmental Reports, it will
make same immediately available to Redeveloper.
4.2 Remediation Activities. At the time of the
execution of this Agreement, Redeveloper has made no
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determination as to whether any specific remediation
activities may or may not be needed with respect to any
areas of the Site. In addition, both Parties warrant that,
to the best of their knowledge, as of the date of this
Agreement, no governmental entity has determined that any
specific remediation will be required on the Site in order
to proceed with the Project. The City acknowledges and
agrees that in light of the uncertainty of the remediation
efforts at this time, the Redeveloper shall be responsible
for all environmental issues, including permitting and any
remediation activities required to proceed forward with the
Project. It is expressly understood, however, that if any
environmental issue shall prevent the Redeveloper from
obtaining governmental or regulatory approval of its initial
development and design concept, or a development and design
concept otherwise acceptable to Redeveloper, the Redeveloper
shall not be required to proceed with the Project. The
Redeveloper warrants that, as of the date of this Agreement,
it knows of no environmental concerns that would prevent the
development of the Project on the Site in accordance with
the Redeveloper's initial development and design concept.
4.3 Remediation Costs. The City and the Redeveloper
acknowledge that the investigation, analysis and potential
remediation of any environmental contamination or other
environmental condition which may exist at the Site will be
a considerable expense which must be undertaken in order to
make the site viable for the development of the Project.
The Redeveloper acknowledges and agrees that it will be
solely responsible for undertaking such efforts.
Accordingly, the Redeveloper herein agrees that it will
undertake such efforts as are necessary to investigate,
analyze, remediate or address any environmental
contamination or condition at the Site that may be necessary
in order to proceed with the Project as envisioned in
Redeveloper's initial development and design concept. Such
efforts or undertakings shall be at Redeveloper's sole cost
and expense, except as set forth below in sub-paragraphs
4.3.1 and 4.3.2. Notwithstanding anything to the contrary
contained herein, whether express or implied, the
Redeveloper shall not be required to proceed with the
Project if it determines in its sole discretion that the
costs of remediation are unreasonable.
4.3.1 Availability of Funds - Other Sources. The
Redeveloper and the City acknowledge that there may be
sources of funds (other than from Redeveloper) which may be
available to be used for the payment or reimbursement of
some of the expenses of environmental remediation or
environmental work undertaken at the Site and related to the
Project as referred to in paragraph 4.3. Such sources may
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include sources of funding from programs offered by the
State of New Jersey which may now or later become available
to either the Redeveloper or the City. Any funds so
received shall inure solely to the benefit of the
Redeveloper to reimburse the Redeveloper for the expense of
environmental remediation or environmental work undertaken
at the Site and related to the Project as referred to in
paragraph 4.3. However, in the event that funds become
available to either the Redeveloper or the City, pursuant to
newly introduced legislation known as New Jersey Senate Bill
S-294 and also known as the "Municipal Landfill Site
Remediation and Redevelopment Act" in its present or
substantially similar form, such that the expense to
Redeveloper of undertaking any environmental remediation at
the Site is reduced by application of such funds, the
Parties agree that the benefit of the receipt of those funds
shall be shared by both the Redeveloper and the City by the
application of the formula set forth in paragraph 4.3.1.1
but that such sharing shall be strictly limited by the
provisions thereof.
4.3.1.1 Sharing Formula. In the event that funds are
obtained pursuant to newly introduced legislation known as
New Jersey Senate Bill S-294 and also known as the
"Municipal Landfill Site Remediation and Redevelopment Act"
in its present or substantially similar form, such funds
shall be applied as follows:
(1) As the Redeveloper receives credit
against its sales tax obligation for funds
expended to conduct reimbursable environmental
remediation activities at the Site, the amount of
money for which the Redeveloper receives credit
shall be transferred within sixty (60) days of
receipt of such amounts to an escrow account to be
established by the City to assist in effectuating
the purposes set forth in paragraph 4.3.1.2.
(2) The sharing required by (1) above shall
be limited to the first Eight Million Dollars
($8,000,000) Redeveloper receives credit for
against its sales tax obligation. The Redeveloper
shall have no obligation whatsoever to convey,
transfer, share or transmit an amount in excess of
the above amount to the City should the
Redeveloper receive credit for funds greater than
Eight Million Dollars ($8,000,000) and this figure
shall be considered an absolute cap for the
purposes described herein.
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(3) The funds so received by the City from
the Redeveloper shall be expended solely for
purposes established in paragraph 4.3.1.2.
4.3.1.2 Use of Funds by City. In the event funds are
received by the City under the sharing formula set forth in
paragraph 4.3.1.1, the City shall apply those funds for the
benefit of the residents of the City for approved projects.
Such projects have been defined generally by the Memo of
Kenneth Platt, Director of Planning and Development for the
City, dated February 13,1996 and attached to this Agreement
as Exhibit J. The City and Redeveloper shall form a
committee consisting of one (1) member appointed by the
Mayor, one (1) member appointed by the President of the City
Council and one (1) member appointed by the Redeveloper.
The responsibility of the committee will be to make a final
determination as to how and on what projects the funds will
be expended. The Party appointing any member of this
committee may remove or replace such member at any time.
4.3.2 Costs on Abandonment or Default. In the event
that Redeveloper is deemed to have abandoned the Project
prior to completion as defined elsewhere in this Agreement,
or in the event that Redeveloper is deemed to be in default
of this Agreement, as defined elsewhere in this Agreement,
the Redeveloper shall indemnify and hold the City harmless
for all costs that the City may be required to expend in
order to remediate any environmental contamination at the
Site which was caused by the acts or omissions of the
Redeveloper, its consultants or its agents in the
performance of work on the Project, and the Site shall be
left in the same or substantially similar condition as it
was when the Redeveloper took title to the Site or performed
activities on the Site in accordance with paragraph 5.1.4.
In addition, the City shall have the right to obtain, retain
and use for its own purposes the balance of all remaining
funds in any escrow established pursuant to the requirements
of the RFQ. The Redeveloper shall not be required to
reimburse the City or anyone else, or to expend funds of its
own for the remediation of any environmental contamination
which either preexisted its involvement at the Site or which
was not specifically caused by its work on the Project,
unless it otherwise moves forward with the Project in
accordance with this Agreement.
4.4 Governmental Approvals. It is acknowledged by
both parties that it will be necessary for the Redeveloper
to obtain various environmental permits and approvals in
order to undertake development of the Project. These
permits and approvals may include but are not limited to
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those obtained from NJDEP, the United States Environmental
Protection Agency, the United States Coast Guard, the United
States Army Corps of Engineers and other such agencies and
may include a wetlands LOI, a landfill disruption permit,
CAFRA permit, a stream encroachment permit, a treatment
works approval, a Water Quality Certificate, a Wetlands
Development Permit and State Riparian Grants. The
Redeveloper agrees that it will forthwith take all necessary
steps to prepare and apply for and proceed diligently to
attempt to obtain any needed permits at its sole cost and
expense in a timely fashion and utilizing its best efforts,
such that the development of the Project will not be
jeopardized. The City agrees to provide any pertinent
information in its possession and to provide any reasonable
assistance, without cost or expense to the City other than
payroll and internal administrative costs, which may be
required of it to enable the Redeveloper to properly apply
for and obtain such permits or approvals in a timely
fashion, including making applications in the name of the
City when reasonably advantageous or otherwise required to
do so.
4.5 Hold Harmless Provision. The City shall indemnify
and hold Redeveloper harmless from all environmental
obligations which result from pre-existing environmental
conditions at the Site, until Redeveloper closes on or
otherwise takes possession of the Site. Redeveloper agrees
that, after conveyance of the Project Parcels by the City
pursuant to this Agreement, it will indemnify and hold the
City harmless from any and all claims, suits or causes of
action that may be brought by any governmental entity or
private Third Party which have as their basis an
environmental obligation or environmental issue. In return
for such indemnification, the City agrees, upon the request
of Redeveloper, and to the extent permissible under
applicable policy provisions, to assign to Redeveloper all
rights which the City may have under any policies of
insurance which it may own or under which it may be named
insured, to seek insurance coverage for reimbursement or
payment of damages or expenses which may be expended or
required to be expended in order to remediate, clean-up or
otherwise address any environmental contamination or
condition. Such assignment shall not include the assignment
of the amount of the City's self-insured deductible on such
policies.
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5. DEVELOPMENT OF THE PROJECT
5.0 General. The Redeveloper and the City acknowledge
that the Project involves certain parcels of land
constituting approximately 150 acres of land adjacent to and
along Huron Avenue know as the "Huron North Redevelopment
Area" ("the Project Parcels") which the City, pursuant to
the RFQ and as owner of those parcels, was to transfer to
the redeveloper selected to develop the Site. The
Redeveloper, pursuant to the RFQ, is responsible to develop
the Project Parcels in a manner consistent with the RFQ and
the Redevelopment Plan.
5.1 Covenant to Convey. In consideration of the
promise of the Redeveloper herein to develop and construct
the Project in accordance with this Agreement, and other
mutual covenants and agreements contained herein, the City
covenants and agrees that it shall transfer and convey title
of the Project Parcels to the Redeveloper, and the
Redeveloper agrees to accept such title as conveyed in
accordance with the terms of this Agreement. The property
to be conveyed in accordance with this provision is more
specifically identified in paragraph 5.1.1, and shall be
conveyed and accepted subject to the following terms and
conditions:
(1) The conveyance by the City shall be of
all land, rights, title and interest together with
all appurtenances thereto, and shall include, but
not be limited to, any right, title and interest
of the City to easements, interior streets, alleys
or rights of way; and
(2) The City shall convey all buildings and
improvements owned by the City and situated on the
Project Parcels, together with all fixtures and
other property attached thereto (hereinafter
collectively called "Improvements") except as
further defined in section 9 of this Agreement;
and
(3) The conveyance by the City and the
acceptance by the Redeveloper shall be subject to
and in accordance with the provisions of this
Agreement regarding the relocation of existing
public works facilities in section 6 of this
Agreement and shall be subject to the continued
use of the Project Parcels by the City as provided
therein; and
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(4) The City shall terminate all existing
leases which may exist on the Project Parcels in
accordance with paragraph 5.1.5 of this Agreement;
and
(5) The conveyance by the City shall be in
accordance with paragraph 10.2 of this Agreement
regarding billboards on the Project Parcels; and
(6) The Project Parcels shall be conveyed by
bargain and sale deed with covenants as to
grantor's acts, and shall convey a good and clear
record and marketable and insurable title thereto,
free from encumbrances, except easements,
restrictions and reservations of record, if any,
as may be acceptable to the Redeveloper within its
reasonable discretion; and
(7) If the City shall refuse to or be unable
to convey title or to deliver possession of the
Project Parcels as herein stipulated, or at the
time of delivery, the Project Parcels do not
conform with the provisions hereof, then
Redeveloper is entitled to whatever remedies are
available to Redeveloper at law or in equity, or
the Redeveloper may elect, in its discretion, not
to proceed with the Project. In no event,
however, shall the City be required to expend any
funds other than payroll and internal
administration costs in connection with its
obligation to transfer title to the Project
Parcels as set forth in this Agreement.
5.1.1 Conveyance of Project Parcels. The property to
be conveyed by the City to the Redeveloper pursuant to the
terms and conditions of paragraphs 5.0 and 5.1 is identified
more specifically in Exhibit B to this Agreement.
5.1.2 Closing Date. The Project Parcels as identified
in paragraph 5.1.1 shall be conveyed by the City to the
Redeveloper on the Closing Date (the "Closing Date"). The
Closing Date shall be no later than seven (7) days after
Relocation of the City Facilities, as that term is defined
in paragraph 6.0 of this Agreement. The Closing Date shall
be scheduled provisionally by the City and the Redeveloper
at least ninety (90) days in advance of the anticipated
Relocation of the City Facilities, using information
available to the Redeveloper regarding the status of the
work being conducted by the Redeveloper in accordance with
its obligation to accomplish the Relocation under Section 6
of this Agreement. The provisional Closing Date may be
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adjusted or changed by the parties based on information
available to the Redeveloper with respect the timing of the
Relocation but under no condition shall the Closing Date be
delayed for any other reason without the consent of both
parties to this Agreement. The Redeveloper shall not be
required to proceed with the Project or the Closing if it is
unable to obtain ALTA title insurance in an amount equal to
the full cost of the Project, without any exceptions,
exclusions or conditions which are not acceptable to the
Redeveloper.
5.1.2.1 Authorization to Convey. The City agrees that
in adopting and executing this Agreement, it will
simultaneously adopt a resolution and ordinance authorizing
and directing the Mayor of the City of Atlantic City, or
some other duly designated official of the City, to execute
and deliver a deed or deeds conveying the Project Parcels in
accordance with the provisions of this Agreement,
immediately upon Developer completing the Relocation as set
forth in paragraph 6.1 of this Agreement
5.1.3 Closing. On the Closing Date the City shall
deliver or cause to be delivered to the Redeveloper the
following:
(1) A bargain and sale deed or deeds with
covenants as to grantor's acts, executed and
acknowledged by the City in conformance with New
Jersey law, conveying the Project Parcels to the
Redeveloper; and
(2) Evidence satisfactory to Redeveloper and
its title company, in their reasonable discretion,
that the person or persons executing this
Agreement and the closing documents on behalf
of the City, including but not limited to the deed
or deeds, have full right, power and authority to
do so; and
(3) If required by Redeveloper, an
assignment or assumption of leases and contracts
in force on the Closing Date with respect to the
Project Parcels and transferring to the
Redeveloper all of the City's right, title and
interest in and under all such leases and
contracts together with all rights and obligations
arising therefrom on and after the Closing Date;
and
(4) If required by the Redeveloper, a
quitclaim bill of sale conveying all of the City's
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interest, if any, in any personalty remaining on
the Project Parcels to which the City has not
expressly retained any right or title by virtue of
the provisions of this Agreement.
In addition to the above, on the Closing Date the City
and the Redeveloper shall cause to be delivered to the
Redeveloper's title company, or other closing agent, such
other documents as may be reasonably necessary and
appropriate to complete the Closing of the conveyance of the
Project Parcels.
5.1.4 Site Preparation Prior to Closing Date. The City
acknowledges and agrees that the Redeveloper may need to
enter the Project Parcels prior to the Closing Date in order
to commence certain site activities such as investigations,
site preparations, remediation work or actual pre-
construction or construction work in order to timely
commence and finish the Project. The City herein agrees
that it will permit the Redeveloper to initiate such
activities (hereinafter referred to as " Site Preparation")
on the Project Parcels under certain defined conditions.
Accordingly, the City herein grants the Redeveloper a
license to conduct Site Preparation prior to the Closing
Date and the conveyance of title, under the following
conditions:
(1) This license shall not take effect prior
to the signing of this Agreement and approval of
this Agreement by the governing body of the City.
(2) This license shall be limited to
activities to be conducted on the Project Parcels
by the Redeveloper which are necessary to the
timely commencement and completion of the Project.
(3) This license shall only permit such Site
Preparation that may be approved by the City in
advance of its commencement by the Redeveloper.
Approval shall be granted by the City to the
Redeveloper through the Redeveloper giving notice
to the City, in a manner and form specified by the
City, at least seven (7) days prior to the
commencement of the Site Preparation work sought
to be commenced. If the City does not
affirmatively notify the Redeveloper in writing
prior to the expiration of those seven (7) days
that it prohibits such Site Preparation work,
approval shall be deemed to have been granted.
Under no circumstances shall the City unreasonably
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withhold permission to the Redeveloper to
undertake Site Preparation work.
(4) Site Preparation, for purposes of this
license and this Agreement, shall be defined as
any work that the Redeveloper requires to be
performed on the Project Parcels prior to the
Closing Date, the timely commencement of which the
Redeveloper deems to be essential to the timely
completion of the Project.
(5) Site Preparation shall be undertaken by
the Redeveloper solely and exclusively at its own
risk and the City shall be in no way held
responsible to the Redeveloper for the Site
Preparation work so conducted.
5.1.4.1 Indemnification and Non-Interference. The
Redeveloper hereby agrees to indemnify and hold the City
harmless from and against any claims or damages which the
City might incur or be subject to by reason of any negligent
acts or omissions of Redeveloper's agents, servants,
consultants or anyone else on the Site for purposes of any
Site Preparation conducted by the Redeveloper prior to the
Closing Date and the transfer of title to the Project
Parcels. In addition, the Redeveloper covenants and agrees
that it will conduct no Site Preparation or other activity
on the Project Parcels prior to the Closing Date which will
unreasonably interfere with any City activities still being
conducted on the Site prior to the Relocation of same. The
Redeveloper agrees to use its best efforts to schedule Site
Preparation such that it will be compatible with the
activities of the City public works and police facilities
which may continue to exist on the Site prior to Relocation.
5.1.5 Existing Leases. The City acknowledges and
represents that at the time of execution of this Agreement,
there are tenants who hold leasehold interests in certain of
the Project Parcels and that such tenants use said parcels
as parking lots. The City further acknowledges that it is
essential that the Redeveloper have free and unimpeded
access to these parcels at the time that Site Preparation
work (or other work) commences on the Project. Therefore,
the City hereby covenants and agrees that all leasehold
interests will terminate on or before the Closing Date. In
the event that the Redeveloper reasonably determines that it
is required to have access to all or a part of a leased area
within the Project Parcels prior to the Closing Date in
order to perform Site Preparation work pursuant to paragraph
5.1.4 ("Affected Area"), the City agrees to cause such
Affected Area to be made available to the Redeveloper for
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such Site Preparation work. It is expressly understood,
however, that the City can continue to lease any area not
then needed by the Redeveloper for Site Preparation work so
long as the area was under lease prior to the execution of
this Agreement and the continued utilization of such area by
the tenant does not unreasonably interfere with the Site
Preparation work of the Redeveloper. As to the Affected
Area, the Redeveloper agrees to compensate the City by
paying the equivalent of the assessed real estate taxes for
the Affected Area until such time as the Redeveloper Closes
on the entire Site or the Redeveloper abandons the Project.
5.2 Project Schedule. It is acknowledged by the
parties to this Agreement that the construction of the
Project will be a substantial undertaking on the part of the
Redeveloper and that it will require the coordination of a
multitude of efforts by the Redeveloper, the City and other
governmental and private concerns. Furthermore, the Parties
acknowledge that at this stage of the planning for the
Project, no definitive construction schedules or deadlines
have been established by the City or the Redeveloper because
of the many undefined parameters and issues affecting the
Project. It is also acknowledged that the Redeveloper has
made a preliminary assessment of the time needed to
construct the project. Such assessment is attached hereto
as Exhibit C. Based on that assessment, the City and the
Redeveloper agree to the provisions of 5.2.1 through 5.2.3
herein.
5.2.1 Necessary Governmental Approvals. The Parties
acknowledge that the construction of the Project will
require a number of governmental approvals and permits that
will be necessary for the Redeveloper to obtain prior to the
commencement of any work on the Site. Such approvals
include, but are not limited to, State and Federal
environmental approvals and permits, CAFRA permits,
landfill disruption permits, wetlands LOI, local and county
planning approvals, highway access permits, construction
permits, and other various federal, state and local
approvals. The Redeveloper agrees that it is its
responsibility to obtain all planning approvals which may be
necessary to commence and complete the Project. Accordingly,
Redeveloper agrees that within twelve (12) months of the
execution of this Agreement by the Parties, Redeveloper will
apply for all the permits and approvals referenced above, to
the extent said approval(s) may be required for development
of the Project and shall diligently pursue such permits and
approval thereafter. The City agrees that it will use its
best efforts, without cost or expense to the City except for
payroll and internal administrative costs, to assist or
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provide information in its possession to the Redeveloper
when such assistance or information is needed by the
Redeveloper to obtain necessary permits or approvals
including, but not limited to, signing any and all
applications for permits or other approvals necessary for
the development of the Project and the Site. The City
acknowledges that the Redeveloper has already taken steps to
apply for certain of the necessary permits or has undertaken
studies or investigations needed to apply for others. The
Redeveloper agrees that it will continue to pursue the
applications currently under consideration by governmental
agencies for which it has applied.
5.2.2 Commencement of Project. In consideration of
the recitations contained in paragraphs 5.2 and 5.2.1, the
City acknowledges that the Redeveloper is not currently in a
position to Commence Construction of the Project without
first obtaining all necessary permits and approvals that are
required as a prerequisite to such construction.
Accordingly the Redeveloper agrees that it will Commence
Construction of the Project within one hundred and eighty
(180) days of the receipt of all final and unappealable
permits and approvals which are necessary to complete the
Project as well as satisfaction of all other conditions
contained herein. For purposes of this paragraph and this
Agreement, "Commence(s) Construction" shall mean any
affirmative act or event undertaken by the Redeveloper to
begin physical construction or site preparation work at the
Site in furtherance of the plans for the construction of the
Project.
5.2.3 Completion of Project. The Redeveloper agrees
that it will make a good faith effort to complete
construction of the Project in accordance with Exhibit C.
The City acknowledges and agrees that Exhibit C is
preliminary in nature and is only an approximation of the
time necessary to complete the Project. Therefore the City
agrees that the Redeveloper is permitted, from time to time,
to update and revise Exhibit C with the use of new or
updated information which it obtains as the Project
progresses. Under no circumstances will Exhibit C, or any
other schedule or timeline other than the dates and times
expressly set forth in this Agreement, be construed to be a
maximum or minimum time allowed the Redeveloper for the
commencement or completion of the Project.
5.3 Construction Assurances. Redeveloper, once it
Commences Construction, will proceed diligently to complete
construction of the Project. The City and the Redeveloper
agree that it is essential for the City to be assured that
the Project will be completed once the Redeveloper Commences
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Construction as defined in paragraph 5.2.2. Accordingly the
City requires, and the Redeveloper hereby agrees, to provide
reasonable assurances to the City that the Project will be
completed once Redeveloper Commences Construction. Said
reasonable assurance shall be the Completion Guaranty
attached hereto as Exhibit O.
5.3.1 Redeveloper Default. The City shall have the
right to declare the Redeveloper in default of this
Agreement ("Default") in the event that any of the events
set forth below in paragraph 5.3.1.1 occur. For purposes of
this Agreement, the term Default shall mean a determination
made by the City which is based on the occurrence of any of
the events set forth in paragraph 5.3.1.1 and which may
result in the City exercising any or all of its remedies
under paragraph 5.3.1.3 of this Agreement to terminate the
Redeveloper's rights under this Agreement. Under no
circumstances shall the City have the right to declare the
Redeveloper in Default of this Agreement other than for and
under the provisions of paragraph 5.3.1.1. In addition, the
City acknowledges and agrees that it shall have no right to
terminate any of the Redeveloper's rights under this
Agreement for any reason, occurrence, event or action taken
by Redeveloper other than those set forth in paragraph
5.3.1.1.
5.3.1.1 Default Events. The City shall have the
right to declare the Redeveloper in Default of this
Agreement only in the event of the occurrence of any of the
following events:
(1) A final and unappealable determination by
a court of competent jurisdiction that the
Redeveloper has materially breached this
Agreement; or
(2) The failure of the Redeveloper to
Commence Construction as provided in paragraph
5.2.2; or
(3) A final and unappealable determination by
a court of competent jurisdiction that the
Redeveloper is insolvent; or
(4) A notice in writing, in accordance with
the notice provisions of this Agreement, addressed
to the City by the Redeveloper that it has
determined not to proceed with the Project.
5.3.1.2 Default Notice. In the event that the City
declares the Redeveloper in Default pursuant to paragraphs
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5.3.1 and 5.3.1.1, it shall do so by advising the
Redeveloper in writing, pursuant to the notice provisions of
paragraph 10.8, that it has declared Redeveloper in Default
(hereinafter "Default Notice"). Absent such Default Notice,
no declaration of Default shall be deemed binding against
the Redeveloper. The Default Notice shall be given by the
City within ten (10) days of action by the governing body of
the City or its designee determining that the Redeveloper is
in Default and shall state with specificity the reasons for
declaring the Redeveloper in Default. Upon receipt of the
Default Notice, the Redeveloper shall have ten (10) days to
respond in writing, to the reasons given by the City in the
Default Notice. In addition the Redeveloper shall be
permitted ninety (90) days after its response to the Default
Notice to "cure" the Default by taking steps to eliminate
the reasons for the Default stated in the Default Notice.
If such cure is accomplished by the Redeveloper, the Default
shall be deemed to be void and all rights of the Redeveloper
under this Agreement shall be preserved and continue in full
force and effect. In the event that the Redeveloper does
not cure the Default as set forth herein, the City shall
have the right to exercise the remedies set forth in
paragraph 5.3.1.3. The Parties may agree, notwithstanding
the provisions of this paragraph, to extend the period of
time by which the Redeveloper must respond to the Default
Notice or the period of time in which the Redeveloper must
cure the Default.
5.3.1.3 Default Remedies. In the event that the
Redeveloper fails to cure the Default as set forth in
paragraph 5.3.1.2 or the Redeveloper abandons the Project,
the City shall be entitled to each of the following
remedies, which shall be deemed to be the City's exclusive
remedies:
(1) Obtain, retain and use for its own
purposes the balance of all remaining funds in any
escrow account established pursuant to the
requirements of the RFQ.
(2) The reversion and re-conveyance to the
City of title to all of the Project Parcels and
any other property interests which were conveyed
to the Redeveloper under this Agreement by the
City.
(3) Obtain from the Redeveloper the rights to and
delivery of the Environmental Data and Environmental Reports
generated by Redeveloper, its consultants or other agents,
as set forth in paragraph 4.1.4.
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(4) Terminate this Agreement and any rights
which the Redeveloper may have hereunder.
5.4 Tax Assessments. The City and the Redeveloper
acknowledge that as of the date of this Agreement, the
Project Parcels are exempt from real property taxes under
New Jersey law because they are owned by the City. The
Parties further acknowledge that upon transfer of title to
the Redeveloper, the Project Parcels will be subject to real
property taxation pursuant to N.J.S.A. 54:4-1 et seq.
Therefore the Parties agree as follows with regard to the
valuation and assessment of the Project Parcels after
conveyance to the Redeveloper.
5.4.1 Assessment During Construction. The Parties
agree that the Project Parcels must be assessed as of
October 1 of the pre-tax year pursuant to N.J.S.A. 54:4-23.
Since it is anticipated that the Project will be constructed
over several years there are likely to be several valuation
dates (October 1 of each year). The City agrees that it
will assess any partial construction on the Project Parcels
in a manner consistent with statutory and case law for
partial assessments.
5.4.2 Valuation Method The City and the Redeveloper
agree that the City shall not be obligated to use the
current assessed value of the Project Parcels (as of the
date of this Agreement) for the assessed value of the
Project Parcels at the time they are initially assessed
after the conveyance to the Redeveloper. The Redeveloper
further agrees that it will not allege in any tax appeal
which it may file with regard to the Project Parcels that
said parcels should have been assessed using their value as
of the date of this Agreement or that such assessments
should be the same as the price Redeveloper has paid herein.
5.5 Subsequent Conveyance by Redeveloper. After the
conveyance of the Project Parcels to the Redeveloper, the
Redeveloper may convey all or part of the Project Parcels to
one or more Third Parties, or the Redeveloper may enter into
a joint venture with one or more Third Parties, for the
purposes of the development and completion of the Project,
each for such consideration and on such terms and conditions
as the Redeveloper may determine in its sole discretion.
The City agrees that the Redeveloper is permitted to
reconvey all or part of the Project Parcels to, or joint
venture with, a Third Party on the condition that the
Project is completed in accordance with the other provisions
of this Agreement. The Redeveloper agrees, in the event
that all or part of the Project Parcels are conveyed or
otherwise utilized by the Redeveloper as part of a joint
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venture or similar joint business undertaking for purposes
of developing the Project or otherwise developing the Site,
that it will proceed as envisioned by this Agreement or will
make, as a condition of any conveyance to or joint venture
with any Third Party, the completion of the Project and the
development of the Site in accordance with the Redeveloper's
initial development and design concept or a development and
design concept substantially similar to same and consistent
with the goals set forth in the RFQ and the Redevelopment
Plan including the requirement that at least one casino
hotel be planned for the Site. In connection with such a
conveyance, the Redeveloper shall remain as the primary
redeveloper of the Site or shall be replaced by an
individual or entity holding a license granted by the New
Jersey Casino Control Commission ("CCC") to own or operate a
casino hotel or found qualified by the CCC to hold such a
license.
5.6 Assignment to Subsidiary. The City acknowledges
and agrees that the Redeveloper shall be permitted to assign
and delegate any and/or all of its rights and obligations
under this Agreement to its wholly owned subsidiary MAC,
CORP., or any other affiliate or subsidiary incorporated or
organized in the State of New Jersey. In the event that
such assignment occurs, the Redeveloper hereby acknowledges
and agrees to guarantee all of the obligations assigned by
it to such subsidiary or affiliate under this Agreement.
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6. RELOCATION OF CITY FACILITIES
6.0 City Facilities Defined. It is acknowledged by
the Redeveloper that the City has certain public works and
police facilities located upon certain portions of the
Project Parcels which provide necessary public services for
the City. The Redeveloper and the City agree that these
City Facilities include and are limited to all those
facilities located on Block RP-14/Lot 1, Block RP-15/Lot 1,
and Block RP-3/Lot 18 and which house or provide a location
for the City's Public Works Building (garage) and
Maintenance Yard and the Atlantic City Police Department' s
firing range and K-9 kennel. It is agreed by the Parties
that, when used in this Agreement, the term "City
Facilities" shall mean those, and only those blocks, lots,
improvements, buildings or others such facilities as are
described in the preceding sentence.
6.1 Relocation. The City and the Redeveloper
acknowledge that in order to proceed with the development of
the Site, the Redeveloper may utilize the Project Parcels
upon which the City Facilities are located. The Redeveloper
agrees that it will be responsible to relocate the City
Facilities to another location within the City in accordance
with the following provisions of this paragraph
("Relocation" or "the Relocation"). Accordingly the Parties
agree that:
(1) Upon the signing of this Agreement, the
Redeveloper will promptly undertake efforts to
find a suitable alternate location for the City
Facilities which is located within the City and
which is acceptable to the City (hereinafter
"Relocation Parcel");
(2) The City will then exercise its powers of
Eminent Domain to acquire the Relocation Parcel
with the understanding that the Redeveloper will
be responsible for all reasonable costs associated
with the acquisition of the Relocation Parcel;
(3) Using information from the City as
provided pursuant to paragraph 6.2 of this
Agreement, and subject to the prior approval of
the Director of Planning and Development for the
City, which approval shall not unreasonably be
withheld, the Redeveloper will design, construct
or remodel any new or existing buildings or other
facilities as may be required on the Relocation
Parcel to replace the existing City Facilities
located on the Project Parcels with the cost
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associated therewith being subject to the prior
approval of the Director of Planning and
Development for the City, which approval shall not
unreasonably be withheld. Such design, re-design,
construction or remodelling shall be such that at
the conclusion of the work thereon the City will
be in a position to obtain a certificate of
occupancy (if needed) and occupy and utilize the
Relocation Parcel and the improvements thereon for
substantially the same purposes as the City
Facilities were occupied and used; and
(4) The Redeveloper will use its best efforts
to obtain, with the assistance of the City as set
forth in paragraph 6.2 below, and assume the full
cost of, all necessary approvals and permits that
may be required to perform the Relocation, which
approvals and permits shall be sought by the
Redeveloper upon the designation and selection of
the Relocation Parcel and shall be diligently
pursued by the Redeveloper thereafter.
6.2 Assistance From City. In recognition of the
necessity of the Redeveloper to complete the Relocation, the
City agrees to do the following:
(1) Assist and cooperate with the Redeveloper
in all aspects of the Relocation including but not
limited to the items set forth below;
(2) Cooperate with and assist all of
Redeveloper's professionals and consultants during
any approval process necessary for the acquisition
of or construction on the Relocation Parcel,
including the waiver of any fees that might
otherwise be due the City for any necessary
permits and approvals;
(3) Identify in writing the City's
requirements for the facilities to be Relocated on
the Relocation Parcel which shall be attached to
this Agreement as Exhibit F; and
(4) So long as there is no unreasonable
interference with the operation of the City
Facilities, permit the employees of the
contractors and subcontractors working on the
Project to park their motor vehicles on the
Project Parcels in the event that the Redeveloper
conducts Site Preparation work in advance of the
Closing Date.
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6.3 Configuration. The configuration, interior fit-
up, size and location of the buildings and facilities to be
located on the Relocation Parcel shall be subject to
approval by both Parties, which approval shall not be
unreasonably withheld. In accordance therewith, the City
has prepared a list of its requirements for such facilities
which is attached to this Agreement as Exhibit F. The
Redeveloper acknowledges that the City may desire to locate
or construct City services, facilities, or operations, other
than the City Facilities, on the Relocation Parcel in order
to consolidate some or all of certain City functions or
operations. The Redeveloper will cooperate with the City in
the design of such facility. The Redeveloper, however,
shall not be required to acquire real estate for, design,
construct, pay for or demolish any City services, functions,
operations, buildings or other facilities other than those
identified as the City Facilities in paragraph 6.0 of this
Agreement. In addition, the Redeveloper shall not be
required to design, construct or acquire any real property,
building, improvement or other facility the size of which
substantially exceeds the size of the City Facilities or
exceeds the cost limitations of paragraph 6.5.
6.4 Redeveloper's Rights Prior to Relocation. In
addition to any rights which the Redeveloper may have to
commence work on the Project Parcels under paragraph 5.1.4
of this Agreement, the Redeveloper shall be permitted to
Commence Construction on the Site in advance of the Closing
Date and the Relocation, upon delivery to the City of a
final, non-appealable land use approval for the construction
or remodeling of the Relocation Parcel in accordance with
the requirements of the City contained in Exhibit F. Any
work performed on the Site pursuant to this provision by the
Redeveloper shall be undertaken at Redeveloper's sole risk
and the City shall have no obligation or be liable to the
Redeveloper in any way as a consequence of any such work
undertaken. It is not anticipated by Redeveloper that any
interim relocation of the City Facilities will be necessary
before relocation of the City Facilities to the Relocation
Parcel.
6.5 Cost of Relocation. The Redeveloper's obligations
to undertake and conduct the Relocation, contained in
paragraphs 6.0 through 6.4 of this Agreement inclusive,
shall be limited to the expenditure by the Redeveloper of
an amount not to exceed Fifteen Million Dollars
($15,000,000) and the Redeveloper shall have no obligation
to the City or to any Third Party for any undertaking in any
way related to the Relocation in excess of that amount.
However, it is expressly understood and agreed to by the
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Redeveloper that the City shall be entitled to the sum of
Fifteen Million Dollars ($15,000,000) to compensate the City
for the Relocation, regardless of the actual cost of the
Relocation. Nothing in this paragraph shall prevent the
City from expending an amount in excess of this figure for
the efforts undertaken to relocate the City Facilities, or
to consolidate other City services or facilities as set
forth in paragraph 6.3, so long as the cost of same is borne
exclusively by the City. The Redeveloper expressly agrees
to absorb all costs incurred by it in connection with the
Relocation for construction management, design
professionals, and attorneys' fees.
6.6 Other Limitations. The Redeveloper's obligations
to undertake and conduct the Relocation are subject to all
conditions and provisions set forth in this Agreement. The
parties acknowledge and agree that it is not the intention
of this Agreement that the City be required to expend any
funds (other than payroll and internal administration costs)
as part of this Agreement. The Parties recognize that an
obligation to expend funds without corresponding
appropriations would be in violation of the Local Budget Law
(N.J.S.A. 40A:4-1 et seq.). Without limiting the generality
of the foregoing, the Parties acknowledge and agree that the
City shall not be required to take final action to condemn
the Relocation Parcel unless requested to do so by the
Redeveloper and until the Redeveloper has escrowed
sufficient money for the condemnation award (or contract
price acceptable to the condemnee), and the City shall not
be required to cause the Redeveloper to effectuate such
relocation of the City Facilities which would cause the
total cost to exceed Redeveloper's $15,000,000.00 (Fifteen
Million Dollar) cap (as set forth in paragraph 6.5) unless
and until the City has taken further action to authorize
such cost and appropriated funds therefor.
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7. TITLE ISSUES
7.0 Title Issues Generally. The Parties acknowledge
that there are numerous issues concerning the status of the
title to the Project Parcels. These issues, as of the date
of this Agreement, are being investigated by the Redeveloper
in order to ascertain their status and the need to correct
or address them. These title issues consist of a variety of
concerns which include, but are not limited to, issues
related to :
(1) Wetlands LOI Delineation
(2) Tidelands Restrictions
(3) Riparian Rights
(4) Easements of Record
(5) Sufficiency of Title Obtained Through Tax
Foreclosure
(6) Potential Deed Restrictions
(7) Vacation of Dedicated Streets
(8) Other Title Issues Generally
The Redeveloper acknowledges that not all title issues can
be eliminated by the efforts of the City due to the fact
that certain of these issues are such that unilateral action
of the City will not eliminate or affect such issue. The
City acknowledges however, that it has the ability to cure
or eliminate some of the title issues by taking certain
actions under its exclusive control. In light of the above
the Redeveloper agrees to undertake such reasonable actions
as are necessary to cure, correct or otherwise address title
issues regarding the Project Parcels that cannot be resolved
by unilateral action of the City unless the Redeveloper
determines, in its sole discretion, that the costs thereof
are unreasonable. The City, in return, agrees to undertake
such actions as are necessary to resolve such title issues
that it has the ability, through its own unilateral action,
to cure, resolve, correct or remove such that it will be
able to deliver a clear, marketable and insurable title to
all of the Project Parcels on the Closing Date which is free
of all encumbrances that may in any way affect the title to
the Project Parcels or the ability of the Redeveloper to
commence or construct the Project; provided, however, that
the City shall not be responsible to expend any funds other
than payroll and internal administrative costs in connection
with any such acts to clear title. The Parties agree, to
the extent that they have been able to do so as of the date
of this Agreement, that they have addressed the title issues
below in paragraphs 7.1 through 7.5.
7.1 State Title Issues. The Parties agree that there
are certain title issues regarding the Project Parcels and
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the Site which must be submitted to and addressed by the
State of New Jersey, and more specifically NJDEP. As of the
date of this Agreement the Parties have identified the
following issues that fall into this category: Riparian
Rights, Tidelands, Wetlands (both freshwater and coastal),
and other issues. The Parties acknowledge that this list
may not be all-inclusive. The Redeveloper agrees that it
will undertake its best efforts to address these issues and
acknowledges that it will not hold the City responsible in
any way for the resolution of these issues prior to the
Closing Date and the conveyance of title to the Project
Parcels, however, the Redeveloper shall not be obligated to
undertake such efforts if it determines, in its sole
discretion, the cost thereof to be unreasonable. The City,
however, agrees that, without cost or expense to the City
other than payroll and internal administrative costs, it
will assist and use its best efforts to facilitate the
undertakings of the Redeveloper to address the state title
issues and will provide any information, documents, or other
assistance necessary regarding the Project Parcels, to the
Redeveloper in the course of the Redeveloper's actions
undertaken to address such issues.
7.2 Tax Foreclosure Issues. The Parties agree that
certain of the Project Parcels have been acquired by the
City through the mechanism of a tax foreclosure action or
final judgments obtained therefrom or through deeds in lieu
of foreclosure from the former owners of the parcels. As of
the date of this Agreement the Parties are aware of only the
following Project Parcels that may have been acquired by the
City in this way :
Block H-12/Lot 3
H-3/
H-3/Lots 5,6 & 7
H-4/Lots 1,2,3,4,5,6,7,8,9,10,11,12 & 13
H-5/Lot 1
H-6/Lots 2&3
H-39/Lot 1
H-40/Lots 1&2
H-41/Lots 1&2
H-42/Lot 1
H-43/Lots 1&2
H-44/Lot 1
H-53/Lot 1
H-55/Lot 1
H-57/Lot 1
H-59/Lot 1
CCNS/Lot 27
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To the extent that these identified Project Parcels have
been acquired in this manner, or to the extent that the
Redeveloper identifies any other Project Parcels which have
been acquired by the City in this manner, the City agrees,
without cost or expense to the City other than payroll and
internal administrative costs, to take whatever steps are
within its authority, ability, or control, that may be
requested by the Redeveloper, to quiet title to these
Project Parcels, including, but not limited to, providing
the Redeveloper with information and documentation,
authorizing testimony by any of its employees, or initiating
legal action on its own and in its own name if required in
order to quiet title to such parcel(s).
7.3 Vacation of Streets. The Site contains a number
of lots and Blocks which contain between them numerous
public rights of way and dedicated streets as set forth on
the official tax map of the City which is made a part of
this Agreement by reference. A copy of the portion of said
tax map which encompasses the area of the Site and the
Project Parcels is attached to this Agreement as Exhibit G.
The City acknowledges that in order for the Redeveloper to
adequately develop the Site in accordance with the Project,
all of the streets and other publicly dedicated rights of
way must be eliminated. The streets and other rights of way
that, as of the date of this Agreement, the Parties
acknowledge and agree should be eliminated are identified
and described on Exhibit H to this Agreement. The City
agrees that it is in the best interests of the public that
these rights of way and streets be eliminated in order to
allow the Project to be completed. Accordingly, the City
agrees to take all necessary steps, simultaneous with the
adoption and approval of this Agreement, to adopt all
ordinances, resolutions or other actions that may be
necessary to vacate such streets and other public rights of
way. The City acknowledges that such other rights of way
may include such things as canals or other watercourses.
7.4 Deed Restrictions. The Parties acknowledge that
there are certain Project Parcels that have been conveyed to
the City by private Third Parties. In some instances, the
deeds of conveyance contain language that refers to the
deeded parcel being acquired by the City for purposes of a
"public park" or for purposes of a "harbor improvement
waterway" for the benefit of the general public. To the
extent that such references may be deemed to be a deed
restriction upon the title or use of such parcel, and the
City is deemed to be the grantor of that restriction on
title, the City agrees that it will take all necessary
steps, including but not limited to the adoption of
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resolutions or ordinances, to remove such title restrictions
that may in any way be deemed by the Redeveloper to
interfere or prevent the development or construction of the
Project. For purposes of this paragraph it shall be
sufficient for the Redeveloper to request the removal of any
restriction in order for said restriction to be deemed
interfering with the development or construction of the
Project. The City agrees that it will undertake to take
such actions as set forth in this paragraph simultaneous
with the action to adopt or approve this Agreement.
7.5 Undetermined Title Issues. The City herein
acknowledges the importance of Redeveloper obtaining the
Project Parcels with clear title and further acknowledges
the importance of clear title to the successful completion
of the Project. To the extent that the Parties have not
herein identified any issue, problem or concern related to
the title to any or all of the Project Parcels, the City,
without cost or expense to the City other than payroll and
internal administrative costs, agrees it will cooperate and
give any assistance necessary to the Redeveloper in order to
clear or remove any title problem subsequently identified in
order to facilitate the completion of the Project.
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8. NEIGHBORHOOD ISSUES
8.0 Neighborhood Impacts. The Redeveloper
acknowledges that the construction and completion of the
Project will have certain impacts on the neighborhoods in
the vicinity of the Site. Although it is anticipated that
the Project will provide many positive effects on the
community, it is also recognized that it may result in some
temporary inconveniences during the time that construction
takes place and for a short time thereafter. Therefore, the
Redeveloper, in concert with the City, desires to take all
steps that are reasonably necessary in order to minimize any
potential negative effects that the construction or
completion of the Project may produce. As a result, the City
and the Redeveloper agree herein to address the concerns of
the surrounding neighborhoods in order to assure the
citizens of the City that reside in those neighborhoods that
the Project will be completed with a minimum inconvenience
and result in a maximum benefit. Accordingly the Parties
agree to the provisions set forth below in this section of
the Agreement.
8.1 Traffic. The Redeveloper and the City agree that
the direction, flow and amount of traffic in and around the
Site is an issue to be addressed during the construction of
the Project as well as after its completion. The
Redeveloper herein commits to exert its best efforts to
minimize the traffic effects of the Project upon the
surrounding neighborhoods in accordance with and subject to
paragraph 8.1.1. The Redeveloper will address the specific
concerns related to traffic through primarily two processes:
(1) the application for subdivision and site plan approval
to be filed before the Board pursuant to its responsibility
to perform a subdivision and site plan review of the Project
as the designee of the City; and (2) the application to be
filed before NJDEP for a CAFRA permit which must contain a
thorough review of the traffic issues for the Project
pursuant to N.J.A.C. 7:7-6.2 et seq.
8.1.1 Roadway Connector. The Parties acknowledge that
the State of New Jersey, by way of a State Task Force, has
been undertaking a study and evaluation of the necessity for
a roadway connection between the Midtown area and the Marina
area of the City including the areas surrounding the Site
("Roadway"). It is further acknowledged that the
Redeveloper, after careful analysis, has recommended to the
State Task Force that the State Task Force recommend and ask
the State, or some political subdivision of the State, to
construct what the Redeveloper has labeled the "Westside By-
pass", as the best transportation alternative for the
Roadway. In the event that the State of New Jersey, or some
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political subdivision thereof, makes a determination to
construct the Westside By-Pass, the Redeveloper, to the
extent that it is within its ability to do so as a
participant in the process of designing or constructing the
Roadway, commits to use its good faith best efforts to cause
compliance with and satisfaction of the construction
techniques, neighborhood assurances and community
enhancements as same are set forth in Exhibit M. The
Redeveloper's obligation to proceed with the Project is
expressly conditioned on the State, or some political
subdivision thereof, electing to proceed with the
construction and funding, and there is no other impediment
preventing completion of, the Westside By-pass and the
development of such other means of ingress and egress to,
from and within the Project as the Redeveloper determines to
be appropriate.
8.1.2 Conditions Precedent. All of the provisions of
paragraph 8.1.1, in addition to any conditions specified
therein, are subject to and expressly conditioned on the
occurrence of all of the following events:
(1) The Redeveloper proceeding with the Project
as envisioned by this Agreement; and
(2) The full approval of the commitments in 8.1.1
by the State of New Jersey or any subdivision thereof who is
responsible to undertake and proceed with the construction
and funding of the Roadway and the Westside By-pass; and
(3) The ability of the Redeveloper, or any other
Third Party who undertakes to construct the Roadway and
Westside By-pass, to obtain all necessary approvals and
permits, including, but not limited to, environmental
permits, stream encroachment permits, CAFRA permits, any
required permits from the U.S. Army Corp of Engineers, the
U.S. Coast Guard or the U.S. Environmental Protection
Agency, any required construction permits and any other
permits that may be required, to construct such a project;
and
(4) The appropriation of sufficient funds by the
legislature of the State of New Jersey to construct the
Roadway and the Westside By-pass.
8.1.3 Roadway Connector Limitation. In the event the
Roadway and Westside By-pass have not been approved by the
State of New Jersey (which approval shall not include the
approvals needed for actual construction as same are set
forth in paragraph 8.1.2(3)) with appropriate funding in
place, on or before December 31, 1998, there shall exist a
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rebuttable presumption that the Roadway will not be approved
by the State of New Jersey; provided, however, that the
aforesaid date shall be extended to cover any period during
which the approval or funding of the Roadway and Westside By-
pass is in litigation. In the event such rebuttable
presumption is not overcome with sufficient evidence to the
contrary within thirty (30) days of the end of such period
(i.e., January 30, 1999 or thirty (30) days after the end of
such litigation), then, in such event, unless the
Redeveloper waives the contingency set forth in paragraph
8.1.1 and in paragraph 8.1.2 and proceeds with development
of the Project, either Party to this Agreement may
thereafter terminate this Agreement without liability to
either party.
8.2 Rodent, Insect and Animal Control. The Redeveloper
will take all reasonable steps necessary to minimize and
control the migration of rodents, insects or other animals
from the Site during the construction of the Project. The
Redeveloper acknowledges that because the Site was a former
landfill the presence of rodents, insects or other animals
may be more severe than normally anticipated. Therefore,
the Redeveloper will undertake to provide controls in
accordance with all applicable laws and other construction
standards such that the issue of rodent, insect and animal
control is reasonably addressed prior to the commencement of
construction. Redeveloper agrees to coordinate this effort
with the City's Department of Health and Human Services.
8.3 Illumination, Noise and Pollution. The
Redeveloper is mindful of the size of the Project and the
potential effects that the construction of such an
undertaking may have on the surrounding communities.
Therefore, the Redeveloper agrees that it will take all
steps reasonably necessary to minimize the passage of
excessive or unwarranted illumination, noise or pollution
into the surrounding communities. The Redeveloper commits
to follow all applicable construction laws, regulations and
standards in the industry to address these concerns and
furthermore commits to having a program in place, prior to
the commencement of construction, to reasonably address such
concerns.
8.4 Security and Safety. The Redeveloper will
undertake all reasonable and prudent steps to maintain the
safety and security of the surrounding communities during
the construction of the Project and will undertake to
address these issues with the Department of Planning and
Development of the City of Atlantic City prior to and during
the course of the construction. The Redeveloper commits to
investigate and address the potential need for a pedestrian
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crosswalk in the vicinity of the Site in order to minimize
the dangers to pedestrians in the surrounding neighborhoods.
The Redeveloper further commits to be cognizant of and
address all traffic safety issues by complying with all
applicable traffic safety provisions both during and after
construction of the Project.
8.5 Surrounding Housing Preserved. The Redeveloper
acknowledges the community interest in preserving the
existing residential neighborhoods near the Site. The
Redeveloper therefore agrees that it will not oppose or
interfere with any reasonable activities designed to
preserve the surrounding neighborhoods. This paragraph
shall not be construed to prevent the Redeveloper from
constructing or developing the Project in accordance with
customary and professional practices.
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9.JOBS AND BUSINESS OPPORTUNITIES
9.0 Purpose. The City and the Redeveloper recognize
that one of the primary purposes of the Project is to foster
and create an improved economic climate in the City and to
provide its residents with enhanced opportunities for
economic well-being. One of the most fundamental aspects of
this purpose is to provide increased employment
opportunities to the residents of the City such that they
will be in a better position to provide for that economic
well-being. Accordingly, the City and the Redeveloper agree
herein to undertake a program of job creation for the City's
residents that will give them an enhanced opportunity for
training and employment at the Project and increase their
ability to be hired in more meaningful and skillful
employment.
9.1 Redeveloper's Commitment. The Redeveloper,
mindful of its obligation to provide enhanced training and
employment opportunities for City residents, agrees to do
the following:
(1) Upon completion of the Project, employ
approximately 2,000 unemployed and/or underemployed
City residents who in order of preference are:
(a) registered with and/or receiving benefits from
unemployment insurance, aid to families with dependent
children, or other forms of public assistance; and
(b) other unemployed persons with a preference to those
who are economically disadvantaged, disabled,
homeless, ex-offender and/or veteran status
individuals. This provision is subject to a
sufficient number of such persons agreeing to be
properly trained and satisfying Redeveloper's non-
discriminatory employment standards. It is in no
event a guaranty of employment or continued
employment to any particular person.
(2) Consistent with and in accordance with
Exhibit K, including the timeline found on page
eight (8) of Exhibit K, initiate a public/private
partnership effort to provide training to the
above referenced individuals in order to qualify
them for hourly and supervisory positions
distributed throughout all areas of Redeveloper's
operations upon completion of the Project. This
partnership group will include, but may not be
limited to, the City, the Atlantic City Board of
Education, the City Council, Atlantic Community
College, the New Jersey Department of Labor, and
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the Redeveloper provided that such governmental
agencies agree to participate in the partnership
group. This provision is subject to such persons
agreeing to be properly trained and satisfying
Redeveloper's non-discriminatory employment
standards. It is in no event a guaranty of
employment or continued employment to any
particular person. The Redeveloper agrees that
the training referred to in this paragraph shall
take place in the City.
(3) Enter into discussions with the City to
reach an accord as to the method of implementation
of the commitments contained in (1) and (2) above
such that a distinct procedure will be in place
upon completion of the Project.
(4) Require that contractor(s) engaged to
perform construction work on the Project make an
effort to hire qualified minority sub-contractors
and seek out and hire qualified City residents and
otherwise comply with any applicable affirmative
action goals, guidelines or requirements,
including but not limited to N.J.S.A. 5:12-184 et
seq., and N.J.A.C. 19:53-1 et seq., to the extent
reasonably possible, subject to applicable union
contracts and other work site requirements.
(5) Name a jobs coordinator for both the
construction phase of the Project and the training
and operations at the Project after completion of
construction, whose job it will be to assure that
the provisions of this paragraph are followed.
(6) To the extent possible, require that all
subcontractors, retailers or other vendors who
have operations at the Project after its
completion, agree to the principles of the
Atlantic City First initiative, wherein qualified
City residents are given first preference for jobs
within their facility or operations.
9.2 Redeveloper's Commitment Goals. In an effort to
more fully set forth an understanding of the type of effort
that the Redeveloper will undertake and which is referred to
in paragraph 9.1, the Redeveloper has compiled a descriptive
recitation of the methods and goals it anticipates utilizing
to address its commitment. This recitation is set forth in
Exhibit K to this Agreement. The purpose of this document
(Exhibit K) is to provide the City with a guideline for the
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implementation of Redeveloper's efforts to enhance the
training and employment opportunities for City residents.
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10.MISCELLANEOUS
10.0 Outparcels. The City and the Redeveloper
acknowledge that the Site contains certain other real
property (the "Outparcels") which are not part of the
Project Parcels and which may be necessary for the
Redeveloper, in its sole judgment, to complete the Project
as envisioned by this Agreement. The Outparcels are
specifically identified and described on Exhibit I to this
Agreement. The Redeveloper acknowledges that it is its sole
responsibility to acquire the Outparcels it deems necessary
and desirable to construct the Project. The Redeveloper
agrees to use its reasonable best efforts do so at its sole
cost and expense provided that the price and other terms and
conditions are acceptable to the Redeveloper in its sole
discretion. The City agrees, without cost or expense to the
City other than payroll and internal administrative costs,
to provide any assistance which it may be able to provide to
assist the Redeveloper in this undertaking if so requested
by the Redeveloper.
10.1 Utilities. The Parties acknowledge that there
are certain utilities present on the Site including but not
limited to electric power transmission lines, sewer
transmission conduits or pipes, a sewer pump station, water
lines or pipes, storm sewers, telephone transmission lines,
television cable lines and other utilities. The Redeveloper
agrees that it is its sole responsibility to undertake the
appropriate measures to negotiate with, acquire, relocate or
otherwise address the existence of these utilities in order
to complete the Project as envisioned by this Agreement.
The Redeveloper's obligations hereunder are subject to it
being able to accomplish the foregoing at a cost and on
terms and conditions acceptable to the Redeveloper in its
sole discretion. The City, to the extent it may be within
its ability to do so, without cost or expense to the City
other than payroll and internal administrative costs, agrees
that it will provide assistance to the Redeveloper to
address the utilities issues on the Site in order to
facilitate the actions undertaken by the Redeveloper in
furtherance of the construction of the Project. The City
further agrees that, to the extent necessary, without cost
or expense to the City other than payroll and internal
administrative costs, it will adopt any resolution or
ordinance, as the case may be, to cause the relocation of
any utility which it has the authority to control or locate.
10.2 Billboards. The Redeveloper acknowledges that
the City is the current owner of the land on which certain
billboards are located on one or more of the Project Parcels
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and that the City realizes certain income from the rental of
these billboards. The Redeveloper therefore agrees that it
will take all reasonable steps to preserve the existence of
these billboards in order to enable the City to collect
income until the latest possible time. The City , in
return, agrees that when requested by the Redeveloper to
terminate the leases for these billboards, it will do so
immediately, such that the Project Parcels upon which they
exist will be available when the Redeveloper determines that
it needs them. It is the Parties' understanding that these
billboards are currently being leased on a month to month
lease and that such leases may be terminated upon thirty
(30) days notice. The City agrees that it will not amend
these leases or enter into new leases. The City also agrees
that, if requested to by Redeveloper and if it is within the
rights and power of the City to do so, the City will attempt
to make any such billboard available to the Redeveloper for
its use and the Redeveloper agrees that, if the City is able
to make any such billboard available, the Redeveloper will
pay the City the same rental income the City was receiving
from the prior tenant.
10.3 Jitney and Other Transit Service. The
Redeveloper recognizes the importance of the existing jitney
and other transit service within the City and further
acknowledges the importance of preserving that service to
the community. Accordingly the Redeveloper states that it
is its present intention, upon completion and the opening of
the Project, to utilize the jitney and other existing
transit services in a manner similar to the other casino
hotels in the City.
10.4 Force Majeure. Failure of either Party to
perform any of the provisions of this Agreement by reason of
any of the following shall not constitute a Default or
breach of this Agreement: labor, disputes, strikes, picket
lines, boycott efforts, fires, floods, freezes, accidents,
war (whether or not declared), riots, acts of God, acts of
government (including without limitation any agency or
department of the United States of America or the State of
New Jersey), or other causes which are reasonably beyond the
control of the defaulting or breaching Party.
10.5 Agreement Provisions.
10.5.1 Paragraph Headings. The headings and
numbering of paragraphs and sections of this Agreement are
set forth for ease of reference only and are not to be
construed or considered to impart meaning to any provision
of this Agreement.
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10.5.2 Governing Law. This Agreement shall be
governed by and construed under the laws of the State of New
Jersey. The Parties further agree that all disputes related
to this Agreement shall be resolved by binding arbitration
by a single arbitrator in accordance with the Commercial
Rules of the American Arbitration Association. The
arbitration award may be enforced in any court of competent
jurisdiction.
44
<PAGE>
10.5.3 Amendments to Agreement. This Agreement
represents the entire agreement by and between the Parties
with respect to the development of the Site, the
construction of the Project and the conveyance of the
Project Parcels. No amendment to this Agreement shall be
considered binding on either of the Parties unless such
amendment is in writing and specifically recites that it is
being entered into by and between the City and the
Redeveloper with the specific intention to modify the terms
of this Agreement. In the event that any such amendment is
agreed to by the Parties, such amendment shall not modify,
change or amend any portion of this Agreement except those
specific portions that are recited in the amendment as being
modified by such amendment. All other portions of this
Agreement not so specifically amended in writing shall
remain in full force and effect.
10.5.4 Severability. Should any provision, term,
paragraph or other portion or portions of this Agreement be
held by any court of competent jurisdiction to be in
violation of any applicable law, or against public policy or
held to be null and void for any reason whatsoever, such
determination, unless it prohibits the conveyance of the
Project Parcels to the Redeveloper, shall not affect the
validity of any other provisions of this Agreement, and such
other provisions shall be deemed to be in full force and
effect and binding on the Parties unless amended in
accordance with paragraph 10.5.3 of this Agreement.
10.5.5 Incorporation of Recitals. The recitals
set forth in section 1 of this Agreement are hereby
incorporated by reference and are considered part of this
Agreement.
10.6 Condemnation/Casualty. In the event that all or
any substantial portion of the Site is condemned or taken by
Eminent Domain or is damaged or destroyed by casualty prior
to the Closing, the Redeveloper may, at its option,
terminate this Agreement by written notice to the City
within ten (10) days after the Redeveloper is notified by
the City of the condemnation, taking, damage or casualty.
For purposes of this provision "substantial portion" shall
be defined as any portion which is equal to or in excess of
ten per cent (10%) of the total acreage of the Project
Parcels or that portion which , in the sole opinion of the
Redeveloper, would prevent the successful completion of the
Project as envisioned by this Agreement. The City agrees
not to condemn or take title by exercise of its eminent
domain powers to any portion of the Site without the
Redeveloper's consent.
45
<PAGE>
10.7 Cooperation by City. In the event that a Third
Party commences litigation or otherwise challenges the
validity or legality of this Agreement and its terms or the
development of the Project as provided herein, the City
agrees, without cost or expense to the City other than
payroll and internal administrative costs, that it will
fully cooperate with and give full assistance to the
Redeveloper in the defense or handling of such litigation or
challenge, including but not limited to, cooperation with
Redeveloper's attorneys, consultants or other agents engaged
to represent the Redeveloper in such action. In the event
the City is required to engage outside counsel in the
defense or handling of such litigation, Redeveloper agrees
to reimburse the City for the reasonable costs and
attorneys' fees the City incurs as a result of engaging
outside counsel. Any outside counsel so engaged by the City
is likewise bound by the cooperation provisions of this
paragraph.
10.8 Notices. Any notice provided or required to be
given under this Agreement must be in writing and shall be
served ( and shall be deemed to have been served) (1) by
hand delivering a copy thereof to the party being served in
person or by commercial courier, or by (2) facsimile,
evidenced by confirmed receipt, to the person or persons set
forth below for each party to this Agreement.
As to the City:
Mayor of Atlantic City
City Hall
1301 Bacharach Blvd.
Atlantic City, NJ 08401
With a copy to:
President of City Council
for the City of Atlantic City
City Hall
1301 Bacharach Blvd.
Atlantic City, NJ 08401
Solicitor, City of Atlantic City
City Hall
1301 Bacharach Blvd.
Atlantic City, NJ 08401
46
<PAGE>
As to the Redeveloper:
Mirage Resorts, Incorporated
3400 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attn: Bruce A. Levin, Vice-President
Facsimile No.: (702) 791-5787
With a copy to:
Hersh Kozlov, Esquire
Kozlov, Seaton, Romanini & Brooks, P.C.
1940 East Route 70, Suite 200
Cherry Hill, New Jersey 08003
Facsimile No.: (609) 424-4446
From time to time either party may designate a
different person or address for all the purposes of this
Notice provision by giving the other party no less than ten
(10) days notice in advance of such change of address in
accordance with the provisions hereof.
IN WITNESS WHEREOF, the Parties have executed this
Agreement effective as of the date appearing on page one (1)
hereof.
Attest: THE CITY OF ATLANTIC CITY
BENJAMIN FITZGERALD By: JAMES WHELAN
- ----------------------- -------------------------------
Mayor
-------------------------------
Title
APPROVED AS TO FORM:
DANIEL A. COREY
-------------------------------
Daniel A. Corey, City Solicitor
Attest:
MIRAGE RESORTS, INCORPORATED
GILBERT BROOKS, ESQUIRE By: BRUCE A. LEVIN
- ----------------------- ----------------------------------
Vice President & Gen. Counsel
----------------------------------
Title
G:\wp50\terry\mirage\don-doc.
47
COMPLETION GUARANTY
This Completion Guaranty (the "Guaranty") is made as of the
date of execution by both parties of a document entitled "An
Agreement Between the City of Atlantic City and Mirage Resorts,
Incorporated for the Development of the Huron North Redevelopment
Area" (the "Agreement") to which this Guaranty is an exhibit, by
Mirage Resorts, Incorporated, a Nevada corporation (the
"Guarantor"), in favor of the City of Atlantic City, a political
subdivision of the State of New Jersey (the "City"). Capitalized
terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Agreement. The provisions
of the Agreement are incorporated herein by reference as if fully
set forth herein, and in the event of any conflict between the
terms of the Agreement and this Guaranty, the terms of the
Agreement shall govern. To induce the City to enter into the
Agreement, Guarantor hereby agrees as follows:
1. Obligations Guaranteed. Provided that the Closing of
the conveyance of the Project Parcels occurs and the Redeveloper
Commences Construction, Guarantor hereby irrevocably and
unconditionally guarantees the obligation of the Redeveloper to
complete the construction of the Project, as that term is defined
in paragraph 3.1 of the Agreement, in accordance with paragraphs
5.2.3 and 5.3 of the Agreement ("Completion of Construction")
(the "Obligation"). The Obligation hereunder shall terminate
upon the Completion of Construction which shall mean when the
Project first opens to the public. In the event that the Closing
does not occur and the Redeveloper does not Commence
Construction, this Guaranty shall be void and of no effect.
2. Performance of Guaranty. In fulfilling the Obligation
hereunder, Guarantor hereby irrevocably and unconditionally
guarantees, promises and agrees to cause the Redeveloper to
perform and comply with all applicable provisions of the
Agreement, whether or not Guarantor is liable therefor
individually or jointly and severally with others, and whether or
not recovery against the Guarantor is or may become barred by any
statute of limitations or is or may become unenforceable or
discharged for any reason other than performance thereof in full.
In this connection, Guarantor agrees: (i) to cause any and all
costs of constructing and completing the Project, including
without limitation, the costs of all labor, materials, supplies
and equipment related thereto, to be paid and satisfied from
Guarantor's own resources; (ii) to cause the completion of the
Project, using Guarantor's own resources, in accordance with the
terms of the Agreement; and (iii) to cause all operating and
carrying costs of the Project during construction, including
without limitation the payment of taxes, assessments, utilities,
insurance and maintenance expenses, to be paid and satisfied from
Guarantor's own resources.
1
<PAGE>
3. Procedures for Completion.
3.1 If the Redeveloper fails to comply with paragraph 5.2.3
or paragraph 5.3 of the Agreement, the City may give written
notice to Guarantor of the occurrence of such event.
3.2 Within 45 days after the date on which the City gives
any such notice to Guarantor, Guarantor, at its sole cost, shall
diligently prosecute such construction to completion in the
manner specified in the Agreement, and shall defend, indemnify
and hold the City harmless from all losses, costs, liabilities
and expenses, including reasonable attorneys' fees, incurred in
connection with such completion.
3.3. If Guarantor fails to achieve the Completion of
Construction or diligently to prosecute such construction to
completion as provided in paragraph 3.2 above, then the City may
proceed as follows:
(a) The City, at its option, shall have the right but
shall have no obligation to commence and pursue an action to
specifically enforce the Obligation of Guarantor to achieve the
Completion of Construction as required pursuant to this Guaranty.
(b) The City, at its option, shall have the right, but
shall have no obligation, to undertake to complete the
construction of the Project (either itself or through any agent,
contractor or subcontractor of its selection).
(c) In any such event, that is, whether or not the
City elects to undertake to complete the construction of the
Project, the City shall have the right to recover damages from
Guarantor in an amount equal to the sum of: (i) the costs
incurred or required to be incurred by the City to achieve the
Completion of Construction as described above (the "Cost to
Complete"), plus (ii) all unreimbursed costs and expenses,
including reasonable attorneys' fees, incurred by the City in
enforcing its rights and interests under this Guaranty.
(d) With respect to the Cost to Complete, Guarantor
specifically agrees that this Guaranty is intended as a contract
for the construction of the Project.
(e) In any action or proceeding by the City to recover
damages from Guarantor as specified above, the City may exercise
any and all remedies available under the laws of the State of New
Jersey.
3.4 The remedies set forth in paragraph 3.3 above shall be
the sole and exclusive remedies against Guarantor under this
Guaranty. The parties recognize that the choice of remedies by
2
<PAGE>
the City will necessarily and properly be a matter of the City's
judgment, which the passage of time and events may or may not
prove to have been the best choice to maximize recovery by the
City at the lowest cost to Guarantor. Nevertheless, the choice
of alternatives by the City shall not be subject to question or
challenge by Guarantor or any other person, nor shall any such
choice be asserted as a defense, set-off or basis for any claim
of failure to mitigate damages in any action or proceeding
arising from this Guaranty.
3.5 The exercise of any of the aforesaid rights shall not
constitute a discharge of Guarantor's Obligation hereunder, it
being the purpose and intent of Guarantor that Guarantor's
Obligation hereunder shall be absolute, independent and
unconditional under any and all circumstances.
3.6 Notwithstanding anything to the contrary contained in
this Guaranty, the Agreement or any other documents, agreements
or instruments relating hereto or thereto, if the City or any
other person acting on behalf of or for the benefit of the City,
shall take or permit to be taken any action which would impair,
prevent or otherwise interfere with any actions which Guarantor
may now or hereafter take to cause the Completion of
Construction, then the Obligation of Guarantor shall be equitably
abated.
4. Waiver. Guarantor hereby waives and relinquishes all
rights and remedies accorded by applicable law to sureties or
guarantors and agrees not to assert or take advantage of any such
rights or remedies, including without limitation: (a) any right
to require the City to proceed against any other person or to
pursue any other remedy in the City's power before proceeding
against Guarantor; (b) the defense of the statute of limitations
in any action hereunder or in any action for the performance of
the Obligation hereby guaranteed; (c) any defense that may arise
by reason of the incapacity, lack of authority, death or
disability of any other person or the failure of the City to file
or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other person;
(d) demand, presentment, protest and notice of any kind in
connection with the Obligation hereby guaranteed except for the
notice provided for in paragraph 3.1 above; (e) any defense based
upon an election of remedies by the City; (f) any defense based
upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; and
(g) any duty on the part of the City to disclose to Guarantor any
facts the City may now or hereafter know about the Project,
regardless of whether the City has reason to believe that any
such facts materially increase the risk beyond that which
Guarantor intends to assume, or has reason to believe that such
3
<PAGE>
facts are unknown to Guarantor, or has a reasonable opportunity
to communicate such facts to Guarantor, since Guarantor
acknowledges that Guarantor is fully responsible for being and
keeping informed of the progress of the Project and of all
circumstances bearing on the risk associated with the Obligation
hereby guaranteed.
5. Attorneys' Fees. The Guarantor shall be responsible
for any reasonable attorney's fees incurred by the City in
enforcing the terms of this Guaranty. The reference to
"attorneys' fees" in this paragraph and in all other places in
this Guaranty shall include without limitation such reasonable
amounts as may then be charged by the City for legal services
furnished by attorneys in the employ of the City, at rates not
exceeding those that would be charged by outside attorneys for
comparable services. Such attorneys' fees, costs and expenses
shall include without limitation, those incurred in connection
with any bankruptcy, reorganization, insolvency, receivership,
liquidation or other similar proceedings involving Guarantor
which in any way affects the exercise by the City of its rights
and remedies hereunder.
6. Cumulative Rights. All rights, powers and remedies of
the City hereunder and under any other agreement now or at any
time hereafter in force between the City and Guarantor shall be
cumulative and not alternative, and such rights, powers and
remedies shall be in addition to and independent of any remedies
given to the City by law. Notwithstanding anything to the
contrary contained in this Guaranty or in the Agreement, the City
agrees that, after the occurrence of a Default under the
Agreement by reason of the failure to achieve the Completion of
Construction, and so long as Guarantor undertakes and thereafter
prosecutes with diligence and continuity the Completion of
Construction, any and all notices of Default shall be considered
void and withdrawn.
7. Independent Obligations. The City's rights hereunder
shall not be exhausted by its exercise of any of its rights or
remedies or by any number of successive actions involving its
rights and remedies unless and until the Obligation hereby
guaranteed has been fully performed.
8. Notices. Whenever Guarantor or the City shall desire to
give or serve any notice, demand, request or other communication
with respect to this Guaranty, each such notice shall be in
writing and shall be effective only if same is delivered by
personal service, by telegram, or mailed by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:
4
<PAGE>
To the City:
Mayor of Atlantic City
City Hall
1301 Bacharach Blvd.
Atlantic City, NJ 08401
With a copy to:
President of City Council
for the City of Atlantic City
City Hall
1301 Bacharach Blvd.
Atlantic City, NJ 08401
Solicitor, City of Atlantic City
City Hall
1301 Bacharach Blvd.
Atlantic City, NJ 08401
To Guarantor:
Mirage Resorts, Incorporated
3400 Las Vegas Boulevard South
Las Vegas, NV 89109
Attn: Bruce A. Levin, Vice-President
Facsimile No.: (702) 791-5787
With a copy to:
Hersh Kozlov, Esquire
Kozlov, Seaton, Romanini & Brooks, P.C.
1940 Route 70 East, Suite 200
Cherry Hill, NJ 08003
Facsimile No.: (609) 424-4446
Any such notice delivered personally shall be deemed to have been
received upon delivery. Any such notice sent by telegram shall
be presumed to have been received by the addressee one business
day after its acceptance for sending by an authorized carrier
thereof. Any such notice sent by mail shall be presumed to have
been received by the addressee three business days after posting
in the United States mail. Guarantor or the City may change its
address and party(s) to receive notice by giving the other
written notice of such change.
9. Successors and Assigns. This Guaranty shall inure to
the benefit of the City, its successors and assigns. The rights
and obligations under this Guaranty may not be assigned or
delegated without the prior written consent of the City and
Guarantor.
5
<PAGE>
10. Miscellaneous Provisions.
10.1 This Guaranty shall be governed by and construed in
accordance with the laws of the State of New Jersey. The parties
further agree that all disputes related to this Guaranty shall be
resolved by binding arbitration by a single arbitrator, who
resides outside New Jersey, in accordance with the Commercial
Rules of the American Arbitration Association. The arbitration
award may be enforced in any court of competent jurisdiction.
10.2 Except for the Agreement or as provided in any other
written agreement now or at any time hereafter in force between
Guarantor and the City, this Guaranty shall constitute the entire
agreement of Guarantor and the City with respect to the subject
matter hereof, and no representation, understanding, promise or
condition concerning the subject matter hereof shall be binding
upon the Guarantor and the City unless expressed herein.
10.3 Should any term, covenant, condition or provision of
this Guaranty be determined to be illegal or unenforceable, all
other terms, covenants, conditions and provisions hereof shall
nevertheless remain in full force and effect.
10.4 Time is of the essence of this Guaranty and each of
its provisions.
10.5 When the content and construction so require, all
words used in the singular herein shall be deemed to include the
plural, the masculine shall include the feminine and neuter, and
vice versa.
10.6 The word "person" as used herein shall include any
individual, company, firm, association, partnership, joint
venture, corporation, trust or other legal entity of any kind
whatsoever.
10.7 No provision of this Guaranty or right granted to the
City hereunder can be waived in whole or in part, nor can
Guarantor be released from Guarantor's Obligation hereunder,
except upon Completion of Construction or by a writing duly
executed by an authorized representative of the City.
10.8 The headings of this Guaranty are inserted for
convenience only and shall have no effect upon the construction
or interpretation hereof.
6
<PAGE>
In Witness Whereof, the undersigned has executed this
Guaranty as of the date first above written.
Guarantor:
Mirage Resorts, Incorporated, a
Nevada corporation
By: BRUCE A. LEVIN
--------------------------------------
Name: Bruce A. Levin
------------------------------------
Title: Vice President and General Counsel
----------------------------------
G:\wp50\kim\mirage\exhibit.o
7
<TABLE>
EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE Mirage Resorts, Incorporated
OF COMMON STOCK
- --------------------------------------------------------------------------------
<CAPTION>
Three months ended March 31 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Weighted-average shares outstanding 91,902,748 91,081,449
Common stock equivalents 5,944,154 4,198,666
- --------------------------------------------------------------------------------
Weighted-average shares outstanding and
common stock equivalents used in the
computation of primary earnings per share 97,846,902 95,280,115
Additional common stock equivalents for
fully diluted calculation 786,202 621,681
- --------------------------------------------------------------------------------
Total shares outstanding assuming full
dilution 98,633,104 95,901,796
================================================================================
Net income $64,587,000 $44,876,000
Primary earnings per share $ 0.66 $ 0.47
Fully diluted earnings per share $ 0.65 $ 0.47
- --------------------------------------------------------------------------------
</TABLE>
EXHIBIT 15
May 6, 1996
To Mirage Resorts, Incorporated:
We are aware that Mirage Resorts, Incorporated has incorporated by reference in
its Registration Statements on Form S-8 (File No. 33-16037), on Form S-8 (File
No. 33-48394), on Form S-8 (File No. 33-63804), on Form S-8 (File No. 33-60183)
and on Form S-3 (File No. 33-65317) its Form 10-Q for the quarter ended March
31, 1996, which includes our report dated May 6, 1996 covering the unaudited
interim financial information contained therein. Pursuant to Regulation C of the
Securities Act of 1933, that report is not considered a part of these
registration statements or a report prepared or certified by our firm within the
meaning of Sections 7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996 AND THE
RELATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE THREE
MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS. DOLLARS ARE IN THOUSANDS EXCEPT PER SHARE AMOUNTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 50,808
<SECURITIES> 0
<RECEIVABLES> 145,278
<ALLOWANCES> 53,020
<INVENTORY> 26,601
<CURRENT-ASSETS> 208,179
<PP&E> 1,962,332
<DEPRECIATION> 494,791
<TOTAL-ASSETS> 1,816,044
<CURRENT-LIABILITIES> 169,246
<BONDS> 209,544
0
0
<COMMON> 940
<OTHER-SE> 1,283,082
<TOTAL-LIABILITY-AND-EQUITY> 1,816,044
<SALES> 0
<TOTAL-REVENUES> 374,208
<CGS> 0
<TOTAL-COSTS> 202,209
<OTHER-EXPENSES> 22,143
<LOSS-PROVISION> 6,043
<INTEREST-EXPENSE> 2,696
<INCOME-PRETAX> 102,505
<INCOME-TAX> 37,918
<INCOME-CONTINUING> 64,587
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,587
<EPS-PRIMARY> 0.66
<EPS-DILUTED> 0
</TABLE>
