Redevelopment Commission to Vote on Aztar Lease
March 3rd, 2010 by Editor, posted in Local News.(EVANSVILLE, IN)- The Evansville Redevelopment Commission will vote tomorrow (March 2) on the Fourth Amendment to the lease between Casino Aztar and the City of Evansville which will extend the agreement until 2015. The terms are contingent on Tropicana Entertainment’s successful emergence from bankruptcy and being granted a license as owner of Casino Aztar by the Indiana Gaming Commission (IGC). Once Aztar emerges from bankruptcy, which is expected to occur this week, new payments to the City will be triggered.
“The approval of a new amendment to the City’s lease with Casino Aztar signals a fundamental change in our relationship. We will have a new management team to work with and a new commitment to our community,” said Mayor Jonathan Weinzapfel. “This lease will financially benefit the City in terms of future economic development with $13.5 million in prepayments within the first year and increased rent payments through 2015.”
An Agreement in Principle (AIP) between the City and Casino Aztar was reached in February 2009. The AIP included a $10 million prepayment in two $5 million installments- one due on August 1, 2009 and the other on August 1, 2010. With tomorrow’s approval of the lease amendment, the prepayment due dates will change to 30 days after the effective date of the plan and on December 31, 2010.
In addition, 30 days after the plan effective date, a $3.5 million payment will be due for redevelopment projects (s) within one mile of the Casino. The City will only have access to the funds by certifying that they will be used to pay or reimburse actual expenses on a downtown arena or downtown economic redevelopment project (s) located within one mile of Casino Aztar.
Regarding capital improvements, Tropicana has agreed to construct a pedestrian bridge from the “Entertainment District” to Casino Aztar with design or construction targeted to begin in 2009. The lease amendment has been revised to state that the bridge will be completed within three years of the plan effective date.
Tropicana will also undertake a study regarding the substantial remodel of Casino Aztar and its amenities, including but not limited to the feasibility of a new riverboat. The status report will be due within one year after the plan effective date. Under the original Agreement in Principal, the study had been set to begin by July 1, 2014.
The City and Tropicana have also agreed to discuss naming rights/advertising for a downtown arena at a future date if applicable.
—- UPDATE —-
The rent schedule will remain at the same rate for 2009 and 2010. The change from 2011-2015 means the City will receive an additional projected $3 million in rent payments.
Previous (2011-2015) New (2011-2015) Adjusted Gross Receipts (AGR)
Before new lease After new lease
Rent Rent in millions
2% 2% 0-25
4% 4% 25-50
6% 6% 50-75
8% 8% 75-100
10% 12% 100+
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