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10-07-2008 Special MeetingMINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF DES PLAINES, ILLINOIS HELD IN THE ELEANOR ROHRBACH MEMORIAL COUNCIL CHAMBERS, DES PLAINES CIVIC CENTER, TUESDAY, OCTOBER 7, 2008 231 CALL TO ORDER: The Special meeting of the City Council of the City of Des Plaines, Illinois, was called to order by Mayor Anthony W. Arredia at 7:00 p.m. in the Eleanor Rohrbach Memorial Council Chambers, Des Plaines Civic Center on Tuesday, October 7, 2008. ROLL CALL: Roll call indicated the following aldermen present: Moylan, Murphy, Higgason, Walsten, Smith and Argus. Aldermen Beauvais and Brookman were absent. Alderman Beauvais arrived at 7:01 p.m. and Alderman Brookman arrived at 7:05 p.m. Also present were City Manager Bajor, Assistant City Manager Slowinski, Acting Director of Finance Wisniewski and City Attorney Wiltse. PRESENTATION/ 0' HARE LAKE OFFICE PARK LLC: Mayor Arredia announced that there would be two ( 2) presentations this evening regarding the State of Illinois' 10th Casino License; one by O'Hare Lake Office Park LLC, 2200 E. Devon Avenue, Suite 314, Des Plaines, represented by Robert L Kozonis and Attorney Douglas Brown, Stewart & Irwin, P.C., 251 E. Ohio Street, Suite 1100, Indianapolis, IN 46204; and one by Midwest Gaming & Entertainment, LLC, 900 N. Michigan Avenue, Chicago, IL 60611, represented by Neil Bluhm and Scott Strusiner, Vice President, Lamb Partners LLC, 900 N. Michigan Avenue, Chicago, IL 60611. Attorney Douglas Brown read his letter to the City of October 7, 2008, stating that his client is in the final stages of assembling a riverboat gaming license application to be filed with the Illinois Gaming Board on Tuesday, October 14, 2008; they feel that the City's current timetable for evaluation of applicants is premature in that it requires the applicants to publicly disclose essential competitive elements of their proposed project prior to the Application Date. Attorney Brown stated that the City feels that Resolutions R-86-02, R-12-03, R-30-04 and R-31-04, together with the Business Development Agreement with Midwest Gaming & Entertainment LLC, currently obligates the City to proceed in supporting Midwest's gaming application exclusively and, unless the resolutions and Midwest Agreement are rescinded, the City will not be in a position to consider endorsement of any competing application; in fact, it is their understanding that City Staff is formally recommending that the City reaffirm its purported partnership with Midwest. Attorney Brown stated that it is being respectfully suggested that if the City rescinds the resolutions and enters into a new agreement with Midwest without a full and well reasoned evaluation of all competing applications after the State's filing deadline, the City could do irreparable damage to the credibility of the City and its endorsement; it could chase away other potentially more qualified bidders; and assure that the 10th Illinois riverboat gaming license will be granted to an operator in a different municipality. 0' HARE LAKE (Cont'd.) DISCUSSION: PAGE TWO 232 10/7/08 Attorney Brown stated that they want the best for Des Plaines and its taxpayers and they want the City to win the Illinois 10th riverboat license for their citizens, but they can't understand why the City would not want to have two (2) or more strong applications in the race, not just one (1); by doing so, the City would at least double their chances of success. Attorney Brown stated that because they do not wish to in any way participate in or encourage a legally flawed process, they must respectfully delay any further presentation to the City Council about their project until after the Application Date; they will respectfully decline to answer any questions this evening relative to their project but would be happy to answer any questions relative to the legal concerns just expressed. Alderman Brookman asked Mr. Brown how is this handled in other municipalities; have other communities publically announced who the developer is? Attorney Brown said that he is not aware of any communities doing that. Alderman Brookman asked if the City was circumventing the process. Attorney Brown said he believes they are. Alderman Brookman stated that the resolutions should be amended to include all applicants; we should have a course of action that would make this open to all applicants. City Attorney Wiltse stated that the City is open to hearing all comments from all applicants; we want the best application that would win us the license. Alderman Brookman stated that the City has an unique opportunity to avoid the City in any legal action; we should remain neutral until all applicants make their application to the Gaming Board. Mayor Arredia stated if O'Hare Lakes Office Park LLC does not give us the information we need regarding their project, how can we make an informed decision? Attorney Brown stated that on October 14, 2008, they will have full information for their application; we don't know how many applicants there will be; there could be three (3) or more. Alderman Beauvais asked Attorney Brown if they responded to the City's letter of September 29, 2008 asking for answers to questions previously sent to them on September 16, 2008. Attorney Brown said he is not sure. City Manager Bajor stated that to date, the answers to those questions have not been received from O'Hare Lakes Office Park LLC. Attorney Brown said that the City is asking us to make public information before we submit our application. Attorney Brown stated that the current resolutions should be withdrawn and the agreement nulified; after October 14, 2008, you will have all the applications and then you can make a decision that is in the best interest of the City. Mr. Bob Kozonis, Manager, O'Hare Lake Officer Park LLC, addressed the City Council and answered questions from the aldermen. Alderman Moylan asked if there is a reason why the City Council is not going to see a presentation as to the site plan and who the partners will be. Mr. Kozonis said they don't want to present anything tonight until we submit our application. Alderman Moylan stated that it is important that the Ci?-\NJ1 Council see something visual. '\J' 0' HARE LAKE (Cont'd.) PRESENTATION/ MIDWEST GAMING & ENTERTAINMENT LLC: PAGE THREE 233 10/7/08 Alderman Murphy stated that this developer wants the City to approve a project that no one has seen; the newspapers have the project but you won't give it to the City Council. Alderman Higgason asked how long this developer has been working on this project. Attorney Brown said several months. Alderman Higgason said she found out about this through the newspapers; we need to watch over our citizens and what is best for them. Attorney Brown said that Des Plaines is in competition with other communities; if we release our information, your competition can out bid Des Plaines. Alderman Brookman stated that she strongly believes that the Gaming Board should get all applications; they will examine all the facts, i.e. background, finances; we should not legislate against competition. Alderman Smith stated that he thinks O'Hare Lake Office Park, LLC is arguing that it is premature to make a presentation tonight; perhaps Midwest Gaming & Entertaining, LLC shouldn't either. Alderman Smith asked Attorney Brown that if they were the only applicant, would they still not make a presentation. Attorney Brown said yes. Alderman Smith stated that he is not sure the City should be affirming any agreement until we know who else is out there; there is some logic in O'Hare Lake Office Park LLC's approach. Alderman Argus asked Mr. Kozonis if former alderman Tom Becker was an investor. Mr. Kozonis said he is not an investor, only a consultant. Alderman Argus read a letter from Sandra Kontos, 333 Beau Drive (in City Council folder), asking that the City not consider Mr. Kozonis' proposed casino location of Peterson Lake; after years of flooding in this area, Peterson Lake was dug and Eaton Park was formed; rarely has the area flooded since, but the casino planned for this location proposes to fill in part of Peterson Lake and take part of Eaton Park; please do not let this site be approved. Mr. Neil Bluhm, Midwest Gaming & Entertainment LLC, addressed the City Council stating that it is not wrong to make an agreement before the filing process; every applicant has an arrangement with the community it would be in; it is a very common thing to have an exclusive arrangement with a community; we were offered Mr. Kozonis' site but ours is a far superior site; we have improved our site by getting the land along River Road and then going west. Mr. Bluhm stated that they want the City to pick the company they want to work with; whomever you chose, it has to be financially strong; we are an open book; we have been asked to join other groups but they know they have the winning bid so they elected not to; Merrill Lynch tells us that we have one of the finest sites in the country; we are on the main thoroughfaire with no residents. Mr. Scott Strusiner, Vice President, Lamb Partners LLC, walked the City Council through the project; a multi- paged, color layout of various aspects of the site was distributed to the aldermen including Phase I interior and exterior perspective, and Phase II interior and exterior perspective. Alderman Brookman stated that Mr. Bluhm's agreement is four (4) years old; the terms and conditions have changed; we should do what is in the best interest of t1(\tfl City. \'I'- MIDWEST GAM. (Cont'd.) DISCUSSION: PAGE FOUR 234 10/7/08 Mr. Bluhm stated that they plan to build Phase I on the Xerox site; they have an absolute option on all the properties; we have had a binding agreement to tie up this property for the last several years; all we have asked for is the tax sharing agreement; the City will receive the first $9 million and then Midwest Gaming & Entertainment LLC will receive the next $9 million for a limited number of years -approximately ten (10) years. Mr. Bluhm stated that if the City feels that O'Hare Lake Office Park LLC is the best company, than you chose them; we think it is unfair for someone to come along and won't make a presentation; he doesn't think O'Hare Lake Office Park LLC has a deal with their partners; in the meantime, we are doing it the right way; he thinks Midwest Gaming & Entertainment LLC should go in with an exclusive arrangement with the City; we think we have the best chance of winning. Moved by Argus, seconded by Walsten, to approve a new Business Development Agreement with Midwest Gaming & Entertainment LLC, 900 N. Michigan Avenue, Chicago, IL 60611, and adopt Resolution R-132-08, A RESOLUTION RESCINDING R-30-04 AND R-31-04 WHICH APPROVED THE BUSINESS DEVELOPMENT AGREEMENT BETWEEN MIDWEST GAMING & ENTERTAINMENT LLC AND THE CITY OF DES PLAINES AND APPROVING A NEW BUSINESS DEVELOPMENT AGREEMENT. Alderman Smith asked why the City has to go with anyone right now. Mr. Bluhm said that the City doesn't have to, but if we don't have an exclusive agreement, we won't submit our application. Alderman Beauvais stated that Midwest Gaming & Entertainment LLC has an excellent location; you will provide the City with economic stability; you have asked us to give a clear indication to the Gaming Board; that is not unreasonable; you have provided Des Plaines with a solid, good reputation; you are not asking for too much. Moved by Murohv, seconded by Moylan, to suspend the rules to permit public input on this matter. Motion declared carried. Mr. Wayne Serbin, 835 Pearson Street, addressed the City Council asking who are the investors in this project; and will the aldermen spend the money the right way. Mr. Peter Olson, 900 S. River Road, addressed the City Council stating that the economic impact on our local businesses will be negative; the people are not going to come to Des Plaines like they do in Las Vegas; it will hurt small businesses; casinos are not going to put money in his pocket; it will hurt the desirability of Des Plaines; turn down this applicant. Mr. Hubert Dodge, 815 Pearson Street, addressed the City Council stating that he agrees with the previous speaker; we started gambling with the lottery to benefit education, but it didn't; 1% -3% of adults are addicted to gambling; the cost of care for addicts is $13,500 per year; don't make this agreement with any one. Mr. Vince Powers, 435 William Street, River Forest, 1 addressed the City Council stating that he lived in Des Plaines for 35 years; he has been opposing gambling since 1994 in Des Plaines and elsewhere; you will probably be successful in getting this casino, but you will be making a grave error; casinos do not bring prosperity; think about this before you vote tonight. MIDWEST GAM. (Cont'd.) ADJOURNMENT: PAGE FIVE 235 10/7/08 Mrs. Jackie Pofahl, 1299 Algonquin Road, addressed the City Council and read a statement (in City Council folder) regarding the impact this will have on Des Plaines; what happened to the resolution that was adopted in 1999 opposing expansion of gambling?; there has been a decline in gambling revenue; the right thing to do is to put this on a referendum. Mr. Jim Blue, 1771 Sherwood Road, addressed the City Council stating that he is involved with the group Citizens of Des Plaines Against Gambling Expansion ( C .A.G. E.) Since 1993; he outlined how gambling has impacted communities with increased crime and addiction; taxable retail sales are substantially lower in communities with casinos; do the right thing; back off. Ms. Cindy Ciero, 2592 Parkwood Lane, addressed the City Council stating that she doesn't think gambling is a good idea, but Mr. Bluhm has the right site; River Road is not in our backyard; what safety measures will you take?; will we be robbed?; what will you do to protect us? Mr. Jim Brookman, 702 Howard Avenue, addressed the City Council stating that anyone can apply for the Des Plaines license, so Mr. Bluhm does not have an exclusive; the Gaming Board is going to make the final decision; and endorsement is premature; it should be done after. Moved by Walsten, seconded by Argus, to call for the question. Motion declared carried. Upon roll call on the original motion, the vote was: AYES: 6-Beauvais, Moylan, Murphy, Higgason, Walsten, Argus NAYS: 2-Brookman, Smith ABSENT: 0-None Motion declared carried. Moved by Brookman, seconded by Murphy, that the Special meeting of the City Council adjourn. Motion declared carried. Meeting adjourned at 9:26 p.m. ~h~ Donna McAllister, MMC -CITY CLERK APPROVED BY ME THIS DAY OF Anthony