May 19, 2021 TO: NIGA Executive Officers FR: Executive Director RE: Clarion Deal Highlights ******************* CONFIDENTIAL*********************************** Dear NIGA Officers: Below is a summary of the key points in the proposed Clarion-Indian Gaming Association Tradeshow Partnership. NIGA just completed its Annual Audit for FY 2020. WipFli Auditors noted that NIGA has a $6 million operating deficit to overcome, with $3.8 million of that amount expected to be relieved with a successful Tradeshow this July. (The Association is carrying $3.8 million in credit to vendors from the cancellation of the 2020 Tradeshow) However, the Association has looming large financial commitments (>$800,000) due in October and November as down payments for the 2022 Tradeshow in Anaheim. These are upfront costs owed to the Convention Center and Hotels in order to meet the long lead times of Tradeshow operations. (Ie.. signage/marketing, food orders, Hotels and Convention Center security deposits, other items) We simply will not have enough operating cash to finish 2021 operationally and provide for 2022 Tradeshow outlays. We are looking at both the Clarion loan(s) below and are talking with Poarch Creek Band to potentially re-finance their Building mortgage to loan the Association additional funds in the amount of $1-$2 million depending on the terms being currently discussed by Poarch. Outlines of a Tradeshow Partnership Agreement with Clarion 1. Clarion loans NIGA, $1.5m per year starting from Jan 1 st 2021 at 3% interest rate and a 10 year repayment period. NIGA can take additional tranches of $1.5 million, up to $.5 million in total. There is no penalty for early re-payment. Clarion’s annual fee will increase to $500,000/yr (currently $330,000) and be paid out of the first $1.5 million in Net revenue. Their increasing fee reflects the administrative portions of the Tradeshow Clarion will assume under the partnership.
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