Police Pension Fund Board - Regular Meeting

Welcome to the Finance and Personnel Committee meeting held tonight Monday, May 11. Sir Clerk, could you please take the role? Thank you. First item on our committee reports number one is approval of vouchers in the amount of $11,816,448.08. Is there a motion to approve vouchers? Any questions or comments on vouchers? Alderman Thunberg.

Chairman, I actually have three but I will hold those off until counsel and or call during the week. Unfortunately I didn't have time to make that call. Thank you.

CHIEF J. All right. Any other questions or comments? Seeing none, all those in favor indicate by aye. Aye. Opposed? The matter passes. Item two is an approval of the bond sale for an issuance of $103,000,000 in taxable general obligation bonds alternate revenue source for convention center and hotel, a public private partnership with Hard Rockford. Is there a motion to approve? Before we have any questions or comments, we have a short presentation. Mr. Caligoni.

Certainly, Chairman. Director Hegarty and I can walk through what the request is this evening. And Dan Fisher and Gino Infantry are also here this evening and just walking in now and would be happy to answer any questions that may go directly to them. But what is up for consideration is the first step in a multi step process which we are requesting authorization to start the bonding process where we're looking to secure $90,000,000 in bond proceeds or a total bond amount of $103,000,000 to fund the construction of a hotel and convention center that would be attached to the Hard Rock Casino. Their overall plan would be that this would be a convention center and hotel owned by the city of Rockford.

However, it would the debt service would be paid by Hard Rock Rockford through a development agreement, corporate guarantee, and management agreement for the operation of the overall convention center and hotel. They have secured a market study. There's a summary of that within the packet from the letter from Mr. Fisher talking about the overall scope and scale of the project, their valuation of the market, the occupancy rate, the average rate per night within the hotel and convention center which would demonstrate that it would have significant and sufficient cash flow to pay for the debt service. We I also referenced a development agreement that we would prepare which set forth additional terms related to an exit strategy for the city of Rockford in the seven to ten year time frame where Hard Rock Rockford would be able to take over ownership of the facility as well as revisions to the host community agreement on the minimum guarantee.

I would note that the authorization to sell bond proceeds is the first step in the process and will come back before committee and city council for final approval after all the public notification process as well as the preparation of the development agreement, the management agreement, and the revisions of the host agreement and any other necessary documents.

I just could you please explain what's meant by the alternate revenue source of these of these bonds, miss Agreed?

Certainly. So this language comes from state statute which authorizes the city to issue bonds that are backed by the city's taxing authority, but the repayment source is a pledge other than property taxes. We would traditionally issue those for another construction project or development project as what we would call sales tax alternates. In this instance, the alternate revenue source is the net proceeds of the operation of the hotel and convention center.

Thank you so much. Do we have any questions from the committee? Alderman Logan.

Thank you, Administrator Cagnolia and Director Hagerty for that little presentation. I know I was tagged in a couple Facebook comments with neighborhood groups wanting to learn more about the project. And of course, we all I think all aldermen around us, we always hear about public safety. People want to feel safe in their homes. And then public infrastructure is really important to folks.

So one of the concerns that other neighbors had brought up was they want potholes gone. They want better streets. I know the delta of the project for our annual budget is around like $4,000,000 Those funds could be used in the future in some capacity to help rebuild streets and roads, correct?

Yeah, certainly. So as you look over the revenue that will be generated from the project, a number of those revenue sources are revenue to the general fund, which is where we pay for our pothole patching operations. So the investment we would anticipate would have positive ongoing impacts on the city's general fund and our ability to fund those core services.

Yeah, thank you. I think it's really important to consider that opportunity cost on page three of the memorandum. I even directly shared that link to the Facebook page. Don't know how many people read it, but there we go. Thank you, Chairman.

Any other questions? Alderman Grant.

Just so that constituents know the repayment of this is not in lieu of all the other taxes or other funding that we receive. We're going to still receive or could you explain to people how we're still going to be receiving taxes, but then they're also going be repaying this bond back? Yes,

Alderwoman. So you are accurate. The bond payment would come from revenue off the convention and hotel center. It will not come from the property taxes that would be generated from the property. Similar to Alderman Logeman's question, there is a thirty year projection.

That is the last page of the staff report and memo where it's anticipated upon stabilization that there would be an additional $4,600,000 in revenue coming to the city of Rockford. And that would come through a number of different scenarios. But that would be in additional gaming tax funds, additional host agreement, revenue sharing, attendance agreement, municipal sales tax, the non home rule sales tax, food and beverage tax, the 1% hotel tax, the five percent hotel tourism tax that we are under agreement with Go Rockford on, and real estate tax portion. So yes, we're anticipating additional revenue from what currently exists. And we're not using existing revenue to pay for the debt service on the bond.

Alderman Bell.

Thank you for allowing me to speak on your committee chairman. Quick question. That additional revenue that you just mentioned, that would start can you tell us when that would begin?

Doctor. So this is a thirty year estimate. We would anticipate that upon completion of construction, when the hotel and convention center comes online, the property tax will be immediate. The room night tax will be immediate. The sales tax will be immediate.

I would certainly recognize that understanding that there's a significant investment taking place 18 miles to the north, that that is going to be competition. We know it's going to be competition with the Beloit Casino. It was identified when we originally approved the license to Hard Rock Rockford as a threat. So there could be a dip in revenues in the short term while this is under construction. And then we would see it slowly graduate and increase through the market analysis completed by Hard Rock Rockford.

Thank you. I mean, was made mention a little bit ago about neighbors input, community input. As we make comments about the things that we'd like to invest in in the future, maybe with the revenue that will be generated, would love to add a potential grocery store west on side as residents have advocated for that. So, while we are investing into filling potholes, we'd also like to consider potential grocery store investment as well. Thank you.

Some of the revenues that are generated from the project are revenue specific to the redevelopment fund where we would normally fund economic development efforts. That would certainly be an option CHIEF for council future

Aldo Beach.

Aldo Thank you Mr. Chairman. This thirty year projection only is showing with the hotel and without the hotel and that's not showing any further development in terms of entertainment centers or that might be built beyond that. My concern is just to compare the hotel with or without the hotel, correct?

Correct.

Doctor. So does this also take into consideration, for example, a decline in revenue from the Beloit Casino? Let's say, for example, there's a 15 or 20% drop in revenue or in attendees, etcetera, there than here. Are these numbers indicative of that drop?

Yes. They are.

Another question. When will we get the development agreement so we can see what terms are in that before we support this? That's one question. Second question is on this sheet here, under the beneficiaries, you list the fire department and police department pensions. Now, don't know what number that is. Is that in addition to what we already are giving based on the law through the general budget?

So what for everyone's awareness, the document that Alderman Beach is referencing, I believe, is the PowerPoint presentation that was at the press conference Thursday last week. Yes. And those numbers reference the spending plan that city council previously approved. So it's $1,000,000 addition for each pension plan.

In addition to that. That's what it is. Then back to that development agreement.

GREGORY So I would anticipate that the development agreement will probably take thirty to sixty days for us to draft and complete should the authorizing ordinance be approved tonight and then at city council. So when will we get to know what the final terms are of that agreement between the city and between Hard Rock? We know the principal terms of that agreement already. Know that one that they will pay the debt service through the development agreement for the bond that they will agree to take over the purchase of the conference center in a hotel somewhere between that seven to ten year time frame yet to be finalized, that they're willing to remove the reopeners on the host community agreement so that we're set advancing forward. Did I forget anything?

The corporate guarantee.

Oh, yes. Mentioned earlier, but I should mention it again, is the corporate guarantee from eight fifteen Entertainment LLC. So those were, from our conversations with aldermen, the main concerns that came up. So we went to Hard Rock to discuss those in advance to make sure that those could be satisfied before bringing this forward.

Then one last comment, sir. Go ahead. Least now. Do you think the 15,000 square foot conference center will be adequate to attract the kinds of business that would fill a conference center business trade shows, those kind of things, and the number of meeting rooms. I'm concerned with that number.

You look at Beloit, I think there are over 200,000 square feet in a conference center. And that puts us at about 10% less than that. So I'm concerned about that. If that's a draw for large corporations to come in to bring their families for trade shows and recreation?

So understanding a 15,000 square foot convention center is certainly going to attract opportunity for the region that we currently don't have. But is it the scope and scale of a convention center that's going to compete nationwide to bring those 70,000, 100,000 square foot events and activities? No, it's 15,000 square foot. But it certainly meets the state statute to advance with the bond sale and is similar in size to what was done with the Hilton Embassy Suite. So there's opportunity there, but it's not going to compete with a 70,000 square foot convention center.

But when we look at this project as a whole, and supported by the market analysis, it will support additional business and activity to the site and to Rockford.

PRESIDENT So one more, Mr. Chairman, If we get a star bond designation, how does that interfere or affect the funding mechanism that's being laid out now?

Excellent question. So there's existing for everyone's awareness, there's an existing star bond legislation that's currently going through the amendment process with the state of Illinois legislators. Those rules are not finalized as of yet. But we have talked to Chairman Torelli and other regional partners, Mayor Loves Park, Mayor of Machesney Park, and some of their staff related to the Star Bond opportunity. And there's a letter of intent being submitted for future application for our Star Bond District.

With a Star Bond District, it could allow us to capture revenue that would otherwise go to the state of Illinois to offset some of the bond payments and cost. What that estimate may be could be up towards $20,000,000 which would be significant in reducing the overall debt on this project and allowing Hard Rock to complete additional investment. It's anticipated that the Starbond District will be larger than just the city of Rockford. But until those rules are finalized, it's a little bit hard to fully predict. We do believe that it's an opportunity to reduce risk for the organization. But it's yet to be perfected. But we will be pursuing it as a region.

Okay. All right. I think I had another question or two, but I'll hold those for now. Thank you.

Alderman Meeks.

Thank you so much for allowing me to speak on your committee. I have a couple of questions from an actual 14th Ward resident, but I'm going to ask maybe one or two of them. How does this impact our city credit rating, or does it impact our city credit rating at all?

We wouldn't city's bond rating is really based on the city's overall financial management and resources and ability to pay. I would not anticipate the issuance of these bonds to negatively impact our credit rating. Obviously the repayment is not from municipal tax sources. It is from the revenue generated by the project. Additionally, generally when we go through the rating process, they're more looking at our policies, how are we managing our resources.

They're not looking at what did we issue debt for and how much is outstanding.

But we would be owning this property, so it

would be

something that would be added to our kind of like debt ratio, would it not?

Certainly. I mean it would be increasing the amount of debt we have on outstanding. But that the city has a very low debt utilization number currently and I don't anticipate that adding this would negatively impact our bond rating.

Okay.

Yeah, I guess if

you find out any differently, if you could let me know.

Certainly. Yeah, I mean certainly as part of the process, we would go through an actual bond rating process with Moody's. Moody's is who the city has historically used for our bond rating. And, you know, the nature of the debt issue doesn't necessarily impact the process. But yes, certainly we would obviously once a rating is completed, we would share that.

And I think I asked this question before, but if you could remind me the answer for, you know, future bonding abilities. Something tragic were to happen and we needed to use these bond revenues for something else significant in the city, how would this, being that we now own, we would own this hotel, how would this impact our future bonding or ability to?

Well, would reduce the amount of debt that we can legally issue. But again, our current utilization of debt that counts against the city's debt limit is very minimal. So I don't anticipate that this would impact our ability to bond for future projects or in the event of an emergency. I don't anticipate that this would impact that.

And can you just help me understand when you say minimal like

We have $13,000,000 currently in outstanding debt that counts against our debt limit.

And then the other question that I had was related to and this is definitely further down the line. It's more aligning with the development agreement. But I do have this question because I have to be reminded of when there was construction the first time at the casino. And there was an agreement to determine or to give the data of who from the city of Rockford was working. I know there were zip codes that were monitored.

I'm not positive if minority numbers were monitored or anything of that nature. But what I did find from that was that only 17% of Rockford residents were a part of the construction of the casino. So do we have a mechanism for this future development agreement that would change that and make that a little bit more feasible for the city of Rockford? And if so, what are some of the differences that can happen in that development agreement to increase those numbers?

So we talked a little bit about employment at the casino. And there's a slide within that presentation that gives you the current most recent breakdown in regards to minority employment, women employment, veterans employment, and then also you discussed construction. I don't recall what the construction number was upon completion, but I'd be happy to pull out that report to determine what the number of, you know, Rockford residents were employed on the construction. I would anticipate there would be similar goals to what was in the original host community agreement related to those goals.

So similar. So no changes would be made so we could end up with 17% again?

I don't know if it was 17%.

Okay. I could pull the report up now if you want me to.

Go ahead. I I I honestly I I can't recall what the report says.

So and I appreciate it. You know, the average salary for a worker inside the casino was, I think I saw $38,000 Those construction jobs average salary for those construction jobs are definitely more than $38,000 So I think for me, my thought would be let's focus in on the area where we can see more people from the city of Rockford being able to utilize those particular jobs and those funds not leaving the city of Rockford. So I guess, like I said, this is further down the line. This is more when we're talking about the development agreement. But I'd like for us to consider another option or verbiage or something that makes it so we are realizing more individuals from the city of Rockford that are in the construction of this building.

So I don't know how that happens with us being a non home rule community. I don't know if that's something that can take place. I just know that what we have right now doesn't lend us to be able to realize that because we're already seeing in majority of the construction where those dollars are going outside of the community. So I just wanted to say that. I just want to put that out there as you all construct this development agreement to really provide this opportunity to see bigger numbers than 17%. But I will take a little time to pull that up. That was sent to me. That does show and verify that it's 17%. Thank

you. Alderman Trudeau.

Thank you for allowing me to speak on your committee. I have comment I have comments, not a question. And I wanna also just preface what I am about to say with my comments have nothing to do with whether or not whether or I'm going to ultimately vote yes or no for this. They are just simply comments. But I did receive an email from the mayor last Wednesday we all did saying I think it was around 03:00.

Don't quote me on the exact time, but I believe it was around 3PM saying, there's a press conference tomorrow at Hard Rock Casino announcing this hotel at 09:30. Well, I run a company and I'm also an alderman, so I had a full schedule that day. I had meetings until about twelve. So I actually wasn't even able to even look at my phone until after twelve. Now meanwhile, when I did finally get to look at my phone, the final I wasn't able to go to the press conference.

Correct me if I'm wrong, but I don't believe any of the aldermen were able to come to the press conference or were present. And that's a little questioning and alarming in itself. When I was able to check my phone, I got all these texts congratulating me on the casino. And I'm saying, what casino? I didn't approve anything. It hasn't become a before council yet. We haven't seen a development deal. I see posts from our chamber president. I see posts from different community leaders and influencers, the Go Rockford board. Everyone's congratulating this big project.

And I'll read exactly what Hard Rock Casino posted. Today, we officially announced the expansion of our casino, including a new hotel and convention center that will bring more guests, more events, and more excitement to our community. Check out the renderings and photos from today's press event and stay tuned as this vision becomes reality. Now nothing in that says, this has to go before council. It hasn't been approved yet. It's getting the city excited. Now, we talk about political theater a lot. And I feel like this rollout was one of the biggest examples of political theater that we've seen in this community. I was quite disappointed to it was a PR stunt. Let's get the community involved.

Let's them excited. Let's let's sell this dream of exactly why we need this. And then the last people to see a rendering were the people that actually have to vote on it. Because ultimately, if it doesn't get voted on, the heat for that doesn't come to the people at the press conference. It comes to me and my other 13 colleagues. So a little irritated with the rollout. I want to make that known. Like I said, getting congratulations from people from big community leaders. I don't even know how to respond to these texts that are still sitting in my inbox because I didn't approve anything. I didn't even see it.

So thank you for congratulating me on something that I never even saw pictures of yet because I was in other meetings that I didn't have time to come to because I just get a last minute announcement about a press conference. So I ultimately that's just want to make those comments known that I was completely unaware. I mean, yes, we knew this was coming down. Right? But, again, the rollout just was it was unsavory for me.

It was performative for me. Because this is a very, this is a $100,000,000 decision. And to roll it out as though we had made this approval and get the community excited about a $100,000,000 decision that we had not even talked about yet was disingenuous. The other portion of that is it it it it concerns me that the residents of my ward specifically, I'll speak for myself, have begged for a grocery store, have begged for a bank. I do not have a bank in my ward.

Begged for these things. All the time. It's the only thing they asked for. And and we can so easily give a $100,000,000 to a casino and never once think, you know what, maybe getting a grocery store would only be a $6,000,000 bond. Have we ever talked about that? It's it it it I'm concerned with these things. I'm irritated with these things. Sometimes I a lot of times I stay silent about a lot of things. This time I'm just I'm over it. So I just want to make sure that I want my comments to be on record about this.

Again, I may ultimately end up voting yes for it, but it doesn't mean I'm not pissed, pissed at the performative rollout of this to force us into a $100,000,000 decision for this community. Thank you.

Alderman Toomer.

Thank you chairman. I would like to say thank you to the the Hard Rock meeting with us openly to anyone who wished to meet with them regarding the numbers, the structure, administration as well. I know that I myself wanted to make this as transparent to the alderman as possible. You know, in relation to, and with the previous comments that were made earlier, I appreciate those. With the people on the job of a construction site like this, a lot of that depends on the contractor.

They then depend on the individuals, the subcontractors and qualified people that are necessary. So we could I would love to have everyone on this job be from Rockford. Ideally, if the stars were aligned, would be the case. Unfortunately, if you have to have 300 electricians on the job and there's not enough to fill the 300, the subcontractor is going to have to look at the availability of electricians. I know the trades have had numerous outreach, so I've been told.

And so they are openly looking for more individuals within our community to enroll in the trades. So as much as again, stars aligned, would love to have everyone from Rockford employed on this job. And as far as sometimes and I appreciate the alderwoman, her concerns on the rollout. Sometimes with these rollouts, we'll look at previous ones. Before we came to vote on anything, there were rollouts for and talk and such on anything from the watch factory to the embassy to Barbara Coleman.

Those were all rolled out with great fanfare before we voted on a lot of this. So I'm not discrediting the elder woman by any means. I appreciate her concern on that. But we do have these things that do roll out and get people excited before it's all hashed out on City Council as we found out with some other projects. But our city loves success, and our city many times looks forward to good news because we know over the years we've had enough bad news.

So this is an item I think that is great news. We know we need more hotel rooms. Fortunately, good news brings us the fact that we have attracted many sports attractions and such. So we need that. And knowing that this will also increase revenue to the city is definitely an added bonus. So thank you.

Thank

you, Chairman. I just wrote down these two questions. As we consider issuing this bond to help finance casino hotel development? Have other communities across the country or of our size entered into a similar development agreement that require this level of support? Maybe to yeah, Mr.

Huggins. Yes. The answer would be yes. There's an example in Illinois in which the municipality not only sold bonds for the establishment of a casino but also created a tax increment financing district to help support and provide gap assistance on the project. So that has taken place.

I'd be happy to give you the full details on that particular example. This is different in that it's not being financially supported as a subsidy to the casino but sale of bonds and then they're paying hard rock is paying the debt.

And to that referenced municipality or community, do you know the name of that community?

What was it? Was it Aurora? It It was Aurora.

Aurora. And is that casino still operating?

Yes. It's Performing well? Oh, that's my understanding, yes.

Okay. And then my other question thank you. Maybe this one's for Chief. What impact will this project have on our public safety services, particularly the fire department? And specifically, how will it affect emergency response time as we continue to have conversations about our staffing levels?

Go ahead.

We haven't specifically forecasted what impact this project would have, but we definitely do keep track on developments east especially in Station 5 still territory and the resources that we have out there currently and the addition of engine five have impacted our response times and driven those down. So with the addition of engine five and the influx of any call volume I think that the resources that we have there right now are adequate. But we'll be evaluating that if this moves forward. PRESIDENT

President. PRESIDENT Aldo Beach. OBAMA:

Thank you, Mr. Chairman. One of the questions I was going to ask is how long before there would be sufficient equity in this project to allow regular financing to be available to this company. And I'd like to make sure that that number appears in the development agreement somewhere. And I'd like to say something short, like five years, if possible. But I just asked that question.

So seven to ten years.

Seven to ten years.

Yep.

Well, is it seven or ten?

Seven to ten years. Have not I need to dig in a little bit farther to perfect that actual date. But that was my earlier reference in regards to the put option in the time frame of seven to ten years. In our conversation with Hard Rock, they want to take over the convention center and hotel as soon as possible. And that's the anticipated time frame based on the projections.

Thank you, sir.

Alderman Slagato.

Thank you, chairman, for allowing me to speak. I have a similar question to Alderman Beach in regards to the seven ten year transition over from us having the debt to them taking over the debt. I know I saw the memo in here regarding there's can you go in there because I know some of the folks may not know this but the net hotel contribution from EBITDA, I guess it says 10,000,000 to $12,000,000 annually versus if I do my quick calculation on 103,000,000 I think it's $3,400,000 that not including interest that over a thirty year span that would be the debt requirement. And what that margin is from that perspective, just walk us through from that because I think that's very important from my perspective. When I go out to get a loan and stuff like that, my debt to income ratio and stuff like that make sure that I'm able to be cash fluid in order for me to make those payments.

So just if you could just walk us through it's in the memo. Can you tell us exactly what occupancy is that 80%? I know there's a reference of 94% at one point in 2032. So just just for the general public because that's one of the concerns that I think I have as well as Mr. Beach, Alderman Beach, from my perspective. The sooner the better. I understand that this is going to take some time for it to get established, constructed within 2027. They'll be ready to rock and roll. But those are the concerns that I kind of have without being over leveraged a little bit here and there. So if you guys could address that, I'd appreciate that.

Sure. So I believe you're referencing the memo from Hard Rock and then that was in the packet. And on the second page, talks about the hotel is forecasted to generate approximately $19,000,000 per year in incremental gaming revenue that's with a 3% annual growth by capturing distance based players who would otherwise be day trippers or lost to competitors. Net hotel contribution to the property, including incremental gaming, is approximately 10,000,000 to $12,000,000 annually. And that's based on the Innovation Group market analysis that was completed.

As it relates to occupancy, it was beginning at approximately 80% and then ramping up to 94%. And that's an evaluation of other casino hotels and what they've seen across the market, understanding the close relationship between Hard Rock Live and the casino.

That's all the questions I had. But I just wanted to make sure so everybody understands. Dollars 10,000,000 to $12,000,000 is what they're projecting to be a net operating from perspective. So versus the 3.4 each year, I'm assuming. I'm not I don't know what the numbers are because we have to go out, find out what the interest rate is, what the market's currently doing for those bonds and what those bond payments are going to be. So I'm

We're estimating about $6,000,000 annually, dollars 500,000 annually. So obviously more than sufficient revenue production from the hotel to cover that debt service payment.

Thank you.

I just want make a comment. With respect to the issue about local trades working on it, yeah, you know, obviously a project like this would take all of the local trades, electrical plumbers, carpenters, glaziers. And I guess I don't know of the local unions what percentage of IBEW workers that are local actually reside in the city of Rockford. So it would be nice to have a larger number. It would be very nice to do.

We can't control where members of the trade unions choose to live in our local area. Would be nice if they all lived in Rockford, but that's pretty utopian. We can think it's a good idea to look into that. Don't know you said you were going to get the number or the source. Maybe you could share that later on with the source of that, and we could look into that and see what could be done to improve that.

With respect to the issue of comparing it to a grocery store, this is not everything I've learned is that the city of Rockford is not investing $103,000,000 into Hard Rock Casino. We are working with Hard Rock Casino to allow them as a conduit to use these alternate revenue source bonds to finance the construction of the hotel and conference center. With the idea Mr. Cagnoy talked about having to put in there for seven to twelve years, I believe, obviously, there's interest associated with the debt service that Hard Rock, the casino, the hotel would have. So it would be in their best interest to pay that off as quickly as possible.

So it's amortized over thirty years, I believe, so the payment is less. But I think the expectation is that that would be paid off sooner. And I think that we're hopeful that in the development agreement, as Mr. Keggley indicated, that that would be addressed as a term in that agreement. So that's it.

We do have with us two of the principals from Hard Rock Casino, if anyone has some specific questions. I know Ms. Alderman Beach asked us more of a question that I don't know if we were really able to give a concrete answer on the city regarding the conference center. And so if no one has an objection, if one of them can answer your specific question about the conference center and how it would compete or not compete with other regional matters, then I'd ask them to step up unless there's an objection.

Chairman, while he's coming forward, if I could just loop back to Alderman Bell's question and confirm one of the examples that we example project that we evaluated was the City Of Aurora where they authorized the issuance of taxable general obligation bonds to support the Hollywood Casino in partnership with Penn Entertainment. And the repayment source was Tax Increment Financing district. And similar to this, there was an obligation for corporate guarantee from Penn Entertainment. So there, they sold the bonds at $55,800,000 and then they had a TIF to repay it. So again, that was a GAAP subsidy on the overall project. So it's a little bit different.

Thank you, Mr. Keignoni. I think, you know, for taking recommendations from Aurora, I think we should take the same recommendation when it comes to the data center as well. Thank you.

All right. Go ahead. Introduce yourself.

Bill and Todd, the Hollywood Casino opens at the June. I think it's June 24. So it's a brand new construction right off of Highway 88. So it was a thirty plus year old project, old riverboat casino in Downtown Aurora that, through city incentives was able to be moved to a more competitive location out on the highway. So that project opens June 24 is the current advertised date.

They did the same thing in Joliet. I don't know what the municipality funding in Joliet, but Hollywood did the same thing. They took an old 30 plus year old riverboat and they moved it land based into a new development district in Joliet. I visited that property. It's doing quite well. Aurora, I've not visited because it's not open yet. So, will visit. And, Councilman Beach, to your question about the 15,000 square feet, in and of itself is not an impactful amount of square footage. But recognize we currently have 25,000 square feet in Hard Rock Live. So the addition of the 15,000 square feet is complementary and additive to the current space we have.

We frequently turn down books of business because we have large exhibition space in the 25,000, but then we don't have any breakout space or board space or traditional meeting space to complement the 25,000 in Hard Rock Live. And another reason we turned down significant leads is we don't currently have hotel rooms to accommodate those large business groups. So the 25,000 existing square feet, plus the incremental 15,000, and the 200 plus hotel rooms really puts us in that sweet spot for a regional convention conference space. You're welcome.

You have a question, Bill? Go ahead.

Thank you. Just referring back to the Hollywood Hotel you mentioned?

It's a Hollywood Casino in Aurora.

Do you know how many and Mr. Pignolet may have touched on this. Do you know how many hotel rooms are in that one?

Not off the top of my head.

Okay. Just trying to see if compared to what square footage of the conference center at all?

Not off the top of my head. It's all it's been in multiple press releases, so it's pretty easy to Google. But I don't want to give you a bad number.

It was we reviewed it as oops, went to the wrong one. I can tell you how many rooms it was. Believe two twenty room hotel. I'm not certain the size of the conference convention area.

Thank you. That's it.

Yeah. A point on that is in the Aurora model, and I suspect in the Joliet model, but definitively in the Aurora model, through a TIF district and through other funding mechanisms, the municipality gave that money to the casino. In this instance, we are leveraging the city's financing capabilities and we are the city is not paying that money. We are paying the bond or the debt service on those bonds, ultimately to stabilize our revenue in the face of new competition and grow that revenue, which will proportionally flow down through the state and local taxes that we generate. So the investment is not an outflow.

The investment is ultimately increasing the inflow to the municipality, and our partner governments through the host community agreement recognize Winnebago County, Machesney Park, and Loews Park are also benefactors from this development.

Alderman Salgado.

Thank you again, Chairman, for allowing me to ask a question. It's more of a procedural, Todd. Come to the seven to ten year mark and as part of the contract drafted out, essentially they would buy us out. How would that work? Do they refinance the bonds? Do we just change covenants from one person to another? How does that work? Can you walk us through that?

So as part of the bond sale terms, we would have that queued up in advance. But they would secure private financing and pay off the outstanding debt and take title of the property.

Perfect. So my question is, do we have a number where they need to get to in order for them to go out and get that private? We don't have to disclose that. I understand that. But is there a number that or is it just like seven to ten years that's what we're looking at, right? What I want to do is get some clarity on that because I think it might give some reassurance to some of the folks around this circle here from that perspective.

So because that seven to ten year window will have to be narrowed down to a specific time period because we will have to build a call option into the structure of the bond sale. So at that point, we will know what the outstanding principal amount is and we will be able to define that.

Yeah. So I don't need a number but I just would like to see if there is a number out there that for them in order for them. So if it comes earlier, perfect. Whatever the case may be, maybe not. But just it gives some reassurance to some of the folks here. So like for example, I'm just going to give you an example. Dollars 4,000,000 say the bond is, right, each year that we pay. So that's $40,000,000 reduction of one hundred and three minuteus that, that's 60 mil. So is that the number that they're looking at 60 mil from that perspective? And that's where I'm asking is there a number, right, versus just the seven to ten year, right?

Because we have projections, we have forecasts. I get it. But there has to be some sort of, from my perspective and I'm just doing quick math here. It's nothing that that's what it is or whatever the case may be. But just kind of what I'm looking at, which makes I think it makes it easier for us to swallow.

As some folks have said, dollars 103,000,000 is huge debt. So just want and I want Hard Rock to be successful. I want them to continue to do what they do in order to grow business and all that stuff. I think we're all in agreement on that aspect it because it's here now and when we know we have competition. So I just want to help the cause where we are reducing our risk as much as we can. And that's where I would just like it doesn't have to be tonight, but certainly a discussion from that, whether it's a time frame or whether it's a dollar amount that they need to get to.

We'll be happy to share that information as we go forward, understanding that there's multiple numbers that impact that.

Alderman Thunberg.

Thanks, Chairman. A couple of things. Revisiting that star bond and for those that millions of people that watch every Monday night via TV, that's a sales tax and revenue bond. That's what we would like to get. Have we reached out to our city lobbyists for any influence on that?

So yes, we have spoke to our city lobbyists on that. We've also spoke to the chairman that would be Chairman Torelli that would be submitting a letter of intent. And we've also spoke to a representative of the governor's office, and Hard Rock Rockford has as well.

GREGORY Great. Thank you. I think that is not a make or break by any means, but that would be nice to have that. Secondly is, I know we've mentioned that this kind of structure has been done in Illinois before. I'd like to add that it also has been done over the borders within our state.

And so I would expect probably that Spear Financial would be reaching out to those underwriters that have that experience. And they sometimes call them the syndicate, the bond syndicate. And so just letting folks know that this isn't a Rockford's not unique to this type of structure. It's been done once in Illinois, but it's been done in other parts of the country as well. One last question that I'd like to pose to the representatives from Hard Rock here that I did not ask and I'm not sure if any of the other aldermen have in their meetings.

If this were to go as successful as we anticipate it to, that meaning the structure itself, the occupancy, the venues, etcetera, have you is there any way that or any plans that could be made into for expansion of that of if you're consistently selling out enough and or the conference center seems to be doing well, but it could stand to be a little bigger. Is there any plans in the mix that would allow you to build on or build out? Thanks.

Thank you Alderman Dan Fisher here principal owner of Hard Rock. We are when the project was designed and built you always try to look forward into the future and say what are the expansion pieces look like whether that's a parking deck that's a hotel whether that's a second hotel what other additive amenities can we possibly bring that would drive visitation to Rockford obviously we chose the music venue first in lieu of the hotel you take a cost increase during COVID We didn't come back to the city and try to build a smaller project or a cheaper project. We felt like we did the right thing and built a world class facility. And Gino has done an outstanding job operating and won all kinds of awards that Rockford's got attention to and we're really proud of. And I think the piece of this that you don't want to lose is it's an additive measure to taxes, not a negative.

The guarantee is it will be negative without it. And we've kind of projected that to the city in advance and would continue to do so that Ho Chunk will have a negative a serious negative impact for a for a legacy not a short period of time it'll take a long time to dig its way out of without this expansion and a hotel expansion is pretty normal and not aspirational for performance and what you drive for occupancy. I think we've proven that with Hard Rock's own track record and the casino industry itself. And when this project was designed, it was built if you look at the east entrance where you enter live now, it's exactly in the center of the property. So it's really situated for two towers for hotels.

And obviously, going higher is more costly and the market's got to justify that. We think we're building a really high level, four quality product. It frankly be the nicest hotel the Winnebago region by a long ways and would attract visitors around that. But we do have the ability to expand south of that with additional towers or other. And we've secured some other land adjacent to us all around us for three years, five years, ten years expansion.

And kind of as we explained to city staff and the mayor is because we own the casino and we happen to own some of the land adjacent to us, we'd never do anything that would jeopardize our primary investment. There's nothing that we could ever build that would rival the casino for revenues. And I think that one of the biggest components that I haven't heard brought up yet tonight is compelling job offers. Only the construction and long term employment of the hotel And what we're adding is extremely additive to the jobs that we have versus being a guaranteed negative. So we do have space to expand. We do have the aspirations of expanding. It's all determined on future performance and the market to support that.

Thank you. Alderman Fronty.

I'm sorry. Thank you so much. Is there a timeline?

We would we the sale timeline, once the authorizing ordinance is approved, is sixty days from start to finish. So in that sixty day period, we would come back to counsel with the revisions to the host community agreement, the development agreement, and complete the steps in the process of selling bonds. So we would get the bond rating complete. We would hold a public hearing. We would have be working with our underwriters to market the bonds to bond buyers.

All of that happens before the actual sale of the bond. So sixty days start to finish. But really approval of that authorizing ordinance, which is the next step to this committee report, starts that timeline.

So but there would be no groundbreaking, no opening door opening?

That's all dependent on Hard Rock and the timing for the city to complete the sale of the bonds and and have those funds available for the start of construction.

Maybe what is your timeline?

We would go I'll be out there with a shovel tomorrow if we

can. But

we think it's no less than twelve months of actual construction, assuming it takes a few months to get to that point, and as much as eighteen months depending on final product lead time on items other other factors that may be a little bit outside of our control on how to rush it or move it quicker than that but somewhere between twelve and eighteen months once we put a shovel

in the ground.

And start making money in about eighteen months.

Yeah I think ramp yeah, we would open and expect very little ramp time for the hotel. You'd have a lot of pre marketing and opportunity to do that.

L. Thank you.

L. All right. Well, thank you so much for coming. Seeing no further questions forget. All those in favor indicate by aye. Aye. Opposed? The matter passes. Moving on, item three is an approval of an intergovernmental agreement between the city and the Board of Education for Summerdale Early Child Center services for 2026 and 2027 school year. The agreement is from 07/01/2026 through 06/30/2027. The funding sources of the Head Start grant funds. There a motion to approve? Second. Any questions or comments? Seeing none, all those in favor indicate by aye.

Aye. Opposed? The matter passes. Item four is approval of a lease agreement with Comprehensive Community Solutions for office space located at 917 South Main Street to support the operations of the VPCC Community Conveners Initiative in a not to exceed amount of $6,000 It's from 04/01/2026, to 03/31/2027, the funding source of the Illinois Department of Human Services Community Convener Grant Awards. Is there a motion to approve? Any questions or comments for staff? Seeing none, all in favor indicate by aye? Aye. Opposed? The matter passes.

Item five is an approval of release of liens in a total amount of $35,635.15 incurred in the properties were owned by the Winnebago County Trustee for properties at 205 North Hinkley and 709 Lee Street, 2143 South 4th Street, 517 Island Avenue, and 5XX Boston Avenue. Is there a motion to approve? Any questions for staff? Seeing none, all in favor, need to give aye. Aye. Opposed? Madam passes. Item six is approval of agreement between the city and Chicago Central Pacific Railroad for the 6th Street and 9th Street two way conversion preliminary engineering services in the amount of $25,000 of funding sources, the 1% infrastructure sales tax. Is there a motion to approve?

So moved.

Any questions or comments for staff? Seeing none, all those in favor indicate aye? Aye? Opposed? The matter passes. Moving on to resolutions. One number one is an award of an engineering agreement for the Rockford Complete Streets revitalization program to HR Green in the amount of $1,761,096 The contract is from September 2026 to December 2028. The funding sources are the MFT funds, state funds, and federal funds, including Bill Grant. Is there a motion to approve the award? So moved. Any questions for staff? Seeing none, all else in favor indicate by aye? Aye. Opposed? The matter passes.

Item two is an award of bid for Citywide Street Reparriage Group Number four to Stents from Excavation in the amount of $2,492,072.02 The contract is through 10/02/2026. The funding source is the 1% infrastructure sales tax. Is there a motion to approve? So Any questions for staff? Seeing none, all is in favor indicate aye? Aye? Opposed? The matter passes. Item three is award of bid for Jamestown ditch drainage improvements to NTRAC in the amount of $123,414.52 The contract is through 11/28/2026, and the funding source are the CIP general fund. Is there a motion to approve?

So moved. Any questions for staff? Seeing none, all in favor indicate by aye. Aye. Opposed? The matter passes. Item four is awarded bid for Demolition Group thirty three in the Northern Illinois Service in the amount of $30,858 It includes properties in 1814 Kishwaukee and 1822 Reed Avenue. The contract duration is through completion of the demo project. The funding source is the IDA Strong Communities grant. Is there a motion to approve? SPEAKER Second. Any questions for staff? Alderman Prunty.

SPEAKER Thank you. Why are we demoing 1814? Kishwaukee?

Who can help that?

I'm going to ask the same question about Reed. I think I know why we're demoing eighteen fourteen, but

Director Lies. I have to look up Kishwaukee. Sorry. One of these was an emergent is actually

It was a fire.

Was the fire. We'll be cleaning up the property. Okay. So I'll look up Kishwaukee, and then I think it's the other one.

The other one is on Reed?

Yeah. The fire was on Reed, I believe.

The one on Kishwaukee, there was a fire today.

Oh, I'm sorry. I had the notes wrong on my thing. I'll look up I'll look up the other one for a minute.

And then I guess I'm just the reason why I'm asking is I just want to know what's the can you give us a timeline? I know I had a property fire in my ward and it just took a very long time to get that down and get that cleaned up. And as I drove past that Kishwaukee location today, I noticed that there were people looking and touching. What's the if this is approved, which does this have to go through another step, or can they clean it up now?

So the one that caught on fire was already approved for I mean, sorry. We were already moving through the demo process, which is why it's faster than like, normally, it wouldn't have been on the agenda right after the fire.

Is that what

you're asking?

Yeah, I just want to yeah.

Yeah. So it was already moving towards demo and then it happened to have a fire this weekend.

Oh, okay.

So right. So we were going to it was on the agenda this week anyway and then

Then it caught fire.

Caught fire. Yes.

Okay. Thank you.

Any other questions? Alderman Salgado.

RICHARD Thank you again for allowing me to ask a question. Sarah is and Ms. Lace, do we have a certain list out there that you can share with the priorities of those properties? Because I know I have a ton of couple properties that either one needs to be rehabbed or potentially just demolished. And so I'd just like to know if we do have like a priority list from that perspective that if you want to just share by ward, perfect, that'd be great.

But I think that'd be great. I know 1814 is in my ward from that perspective. So I just would like to see if there is a priority, how can we And to Ms. Prunty's question about, you know, well, I have one in my ward that, you know, I'd like to get potentially taken down because of a fire, whatever the case may be. So just, you know, if there is, great. If you could share that with us, that'd be great. It doesn't

I'll share whatever that we have. We do not have as long of a list. In past years, we had a list that we were working through all of the time. The reality is with demolition right now, they're kind of few and far between. We've created some good tools, first of all.

So especially with residential, the land bank and other partners have really been able to answer that. But more importantly, when we are putting something up for a demo, have to do public notice and send out interested parties. Most, I would say, a majority are getting objected to and then having to go another step. So it's a little more rare to get to the demo phase right now. But I can send out what we do have noted and then what's been objected to and why we're not moving forward with them at this time.

MR. All right. Seeing no further questions, all those in favor of the demolitions approving the bid indicate by aye. Aye. Opposed? The matter passes. Item five is an award of bid for bituminous patching rebid to DPI Construction in an estimated annual amount of $734,340.5 The contract is for one year with three possible annual extensions of funding sources to water operating budget. Is there a motion to approve? So moved. Any questions on this bid?

Seeing none, all is in favor, indicate by aye. Aye. Opposed? Madam passes. Item six is an award of RFP for third party administration of FMLA leave management to schedule claims in an amount of $3.39 per employee per month for a total estimated admin amount of $44,015 The contract is three years with two annual extensions. The funding source is the human resources operating budget. Is there a motion to approve? Second. Any questions or comments from staff? Seeing none, those in favor, indicate by aye.

Aye. Opposed? The matter passes. Item seven is award of sole source contract for police communication radios and accessories to Motorola in the amount of $169,464.24 This is a one time purchase. The funding source is the police capital budget. Is there a motion to approve? So moved. Second. Any questions or comments regarding the equipment? Seeing none, all those in favor indicate aye. Aye. Opposed? The matter passes. Item eight is a resolution authorizing the central services manager to execute a contract for natural gas supply. Is there a motion to approve the resolution?

Any questions or comments for staff? Seeing none, all those in favor, indicate aye. Aye. Opposed? The matter passes. Is there a motion to adjourn? All those in favor, indicate aye. This meeting is adjourned.