THIRD AMENDMENT TO REDEVELOPMENT AGREEMENT

Exhibit 10.1

THIRD AMENDMENT TO REDEVELOPMENT AGREEMENT

THIS THIRD AMENDMENT TO THE REDEVELOPMENT AGREEMENT (“Agreement”) is made and entered into effective this 21 day of August, 2006, by and between LAND CLEARANCE FOR REDEVELOPMENT AUTHORITY OF THE CITY OF ST. LOUIS (hereinafter sometimes the “LCRA” or “Owner”) and PINNACLE ENTERTAINMENT, INC. (hereinafter sometimes the “Redeveloper” or “Optionee”).

RECITALS

A. The LCRA and Redeveloper entered into that certain Redevelopment Agreement dated April 22, 2004, as amended (the “Redevelopment Agreement”) which governs among other things the development of certain real property described in the Redevelopment Agreement in the City of St. Louis, Missouri.

B. The LCRA and Redeveloper desire to amend the Redevelopment Agreement as hereinafter set forth;

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties hereto, the LCRA and Redeveloper agree to amend the Redevelopment Agreement as follows:

1. Section 1 of the Redevelopment Agreement is amended by adding the following new definition in the appropriate place alphabetically:

“Expanded Redevelopment Area” means the real property bounded by 2nd Street, Carr Street, Leonor K. Sullivan Drive, and Martin Luther King Drive.

2. The definition of “Redevelopment Project” or “Project” in Section 1 of the Redevelopment Agreement is amended as follows:

(i) to insert the words “and Expanded Redevelopment Area” after the words “Redevelopment Area”‘ in the second line; and

(ii) to substitute a new Exhibit B entitled Project Proposal Essential Elements to the Agreement, which is attached hereto as Exhibit 1.

(iii) to substitute a new Exhibit C entitled Improvements, which is attached hereto as Exhibit 2.

3. The second sentence of Section 3.8 of the Redevelopment Agreement is amended to read as follows:

“Total project costs by the Redeveloper for this part of the Project shall be at least $325 million (the Required Expenditure).”

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4. Section 3.10.3 of the Redevelopment Agreement is amended to provide that within 90 days of the date of this Amendment, the LCRA shall designate the Redeveloper as the exclusive redeveloper in the Expanded Redevelopment Area; provided, however, that such exclusive designation shall not interfere with LCRA’s right to confer redevelopment rights to others in the event that this Agreement is no longer in effect or Redeveloper has been found to be in material breach by a court of competent jurisdiction,

5. The references in the Redevelopment Agreement in Section 3.13 and 3.16.1 to the commencement of construction, or the date on which construction was initiated, shall mean September 15, 2005. Attached as Exhibit 3 hereto is the Certificate of Commencement of Construction executed on behalf of Redeveloper, and accepted by the LCRA. Further attached as Exhibit 4 hereto is the MBE/WBE Plan accepted by both Developer and LCRA.

6. The schedule in Section 3.13 of the Redevelopment Agreement is modified to state that the casino and hotel will be completed, licensed and opened by December 31, 2007; provided, however, that Redeveloper may extend such date for two (2) additional six (6) month periods—the first period being until June 30, 2008 and a second period being until December 31, 2008. The method of extension shall be: for the first period until June 30, 2008, by providing the LCRA written notice prior to December 31, 2007 of its intent to extend together with payment in the amount of Five Hundred Thousand Dollars ($500,000); and, for the second period until December 31, 2008, by providing the LCRA written notice prior to June 30, 2008 of its intent to extend together with payment in the amount of Five Hundred Thousand Dollars ($500,000).

7. Section 3.11.1 of the Redevelopment Agreement is amended and restated as follows:

In addition to maintaining and operating the Improvements, commencing on the earlier of June 30, 2008 or on the date of Licensure by MGC of Redeveloper for the Project, the Redeveloper and City shall cooperate to design and form a CID which shall, at a minimum, include an area bounded by Carr Street, Dr. Martin Luther King Drive, Fourth Street and the center of the Mississippi River (the “Project CID”) and that is presently projected to generate Three Hundred Sixty Five Thousand and No/100 Dollars ($365,000.00) per year for the purpose of funding security, public improvements (including the Improvements), maintenance and improving and enhancing the environs in the immediate vicinity of the Redevelopment Area and the Expanded Redevelopment Area (“Supplemental Services”). To the extent the Project CID generates sufficient revenues per year, the Project CID shall make, by January 31st of each year commencing on the January 31st immediately following the earlier of June 30, 2008 or Licensure, an annual payment to the CID Board in the amount of Three Hundred Sixty Five Thousand and No/100 Dollars ($365,000.00) (subject to a CPI increase commencing on the third anniversary date of the initial payment) for Supplemental Services. To the extent the Project CID fails to generate sufficient revenues for the year before the earlier of June 30, 2008 or the date of Licensure, the Project CID shall make, by January 31st immediately following the earlier of June 30, 2008 or Licensure, a pro rata payment to the CID Board in the

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amount of $1,000 per day for each day between the date of earlier of June 30, 2008 or Licensure and January 31st of that year, for Supplemental Services. The Redeveloper shall participate in the Project CID and shall not challenge any imposition of a special assessment by the Project CID, provided that (i) other property owners within the Project CID are required to pay the same level of special assessment as Redeveloper, (ii) the representation on the Project CID Board of Directors generally reflects the financial contributions to the Project CID, and (iii) the special assessment is not based on parking or gaming activities.

8. Section 4.21.2 of the Redevelopment Agreement is amended and restated as follows:

(i) In the event the Redeveloper fails to open the casino and hotel for the Project (i) on or prior to December 31, 2008, or (ii) is unable to continue to operate the casino and hotel for the Project for a period of at least ten (10) years from the date of initial Licensure, Redeveloper shall pay to the LCRA Ten Million Dollars ($10,000,000) as liquidated damages and in such event, neither the LCRA nor the City shall have any other rights or remedies against Redeveloper.

(ii) In the event that there is less than a one (1) year separation between the Licensure of the Project and the Licensure of the Redeveloper’s project to be located in unincorporated Lemay (the “County Project”) the Redeveloper shall pay to the LCRA the following amount (“Separation Fee”):

provided, however that the amount of any Separation Fee shall be reduced by any fee paid by Redeveloper to LCRA under section 4.21.2(i) above. The Separation Fee, if any, shall be due and payable by Redeveloper to the LCRA on the date of Redeveloper’s Licensure of the County Project. For purposes of this Section 4.21.2(ii). hereof, in the event that the Redeveloper abandons the County Project and terminates Redeveloper’s license application with the MGC terminating licensure procedures, there shall be deemed to be a one year separation between the Licensure of the Project and the Licensure of the County Project.

(iii) The Redeveloper’s payment obligations under this Section 4.21.2 are subject to Redeveloper’s rights of termination in Section 4.1.1 prior to any payments being due under this Section 4.21.2, such payments shall not be owing as liquidated damages and in such event neither LCRA or the City shall have any other rights or remedies against Redeveloper.

9. The LCRA agrees to cooperate with the Redeveloper in connection with the vacation of 2nd Street including, but not limited to, executing the Petition and Waiver of Damages in the form prescribed by the City Streets Department at a cost of $200 payable by the

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Redeveloper to the City and conveying to the Redeveloper by quit claim deed of all its right, title and interest in and to the property owned by the LCRA abutting 2nd Street between Martin Luther King Drive and Carr Street and the underlying fee to the property that the LCRA obtains as a result of the street vacation.

10. A. Subject to Redeveloper’s General Counsel’s reasonable review and approval, Redeveloper shall pay LCRA for the attorneys’ fees for the services of Armstrong Teasdale, LLP and Stinson Morrison Hecker, LLP, hereinafter within a reasonable time, not to exceed thirty (30) days after receipt of invoice.

B. From and after the date hereof, the parties acknowledge, affirm, and will be governed by Section 2 of the Third Amendment to Option for Ground Lease, which states as follows:

“The parties acknowledge and agree that the reasonable legal expenses incurred by the Owner with respect to this Third Amendment and any additional future amendments requested by Optionee are reimbursable under the Redevelopment Agreement executed by the parties subject to the Optionee’s receipt of a summary of the services provided in related invoices and certification by the principal involved attorney of Armstrong Teasdale that the fees invoiced were incurred by the City in the ordinary course of business in connection with the preparation, review and negotiations of the Option and its amendments.”

C. Notwithstanding that language in the Third Amendment to Option for Ground Lease wherein Optionee shall reimburse Owner for Owner’s Legal Fees for the acquisition of the Eminent Domain Property from Owner, Optionee shall reimburse Owner for Owner’s Legal Fees as provided in Section 1 (c) of Exhibit E to said Third Amendment to the Option for Ground Lease if the Eminent Domain Property is acquired other than from Owner including but not limited to an acquisition arising out of the matter styled Land Clearance for Redevelopment Authority of the City of St. Louis v. Cherrick Distributing et al., Cause No. 042-08152 Circuit Court of the City of St. Louis or acquired from Wimar Tahoe Corporation or Columbia Sussex Corporation or President Casinos, Inc.

11. Except as modified and amended by this Amendment, the Redevelopment Agreement shall remain in full force and effect in accordance with the respective terms thereof. Unless the context otherwise indicates, all other terms and conditions of the Redevelopment Agreement which are the same as or directly related to the revised terms and conditions set out in this Amendment are similarly modified to be consistent with this Amendment. The provisions of this Amendment shall inure to the benefit of and be binding upon the parties hereto, their successors and assigns. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Redevelopment Agreement.

12. This Amendment may be executed in counterparts.

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IN WITNESS WHEREOF, the undersigned have set their hands and seals as of the date first written above.

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EXHIBIT 1

Project Proposal

Essential Elements

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EXHIBIT 2

Improvements

Pedestrian link to Baer Plaza at location east of Convention Center and Edward Jones Dome.

Enclosed pedestrian bridge across 2^nd St. to Embassy Suites Hotel (subject to Embassy Suites approval)

Extensive landscaping of plaza along Broadway to include casino signage in conformance with City Sign ordinances

Trees along N. 2^nd St. & Carr St.

Fully landscaped perimeter

New crosswalks at existing traffic lights to access Laclede’s Landing and Convention Center from pedestrian bridge

Accessible parking in compliance with federal, state and local law

Bus stops at appropriate locations in accordance with Metro Development Agency

To the extent possible, as reasonably determined by the City’s Street Department, Traffic and Lighting Division, provide a left turn extension onto Carr Street to alleviate traffic congestion entering area from southbound off-ramp of I-70

All infrastructure (street & utilities) necessary to construct, maintain and operate the Project

Street lighting and “clear path” from landing of MLK pedestrian bridge to entrance to Convention Center

Flood protection/site drainage in accordance with MSD/City regs

EXHIBIT 3

Certificate of Commencement of Construction

DELIVERED BY

PINNACLE ENTERTAINMENT, INC.

The undersigned, Pinnacle Entertainment, Inc. (the “Redeveloper”), pursuant to that certain Redevelopment Agreement dated as of April 22, 2004, as amended, between the Land Clearance for Redevelopment Authority of the City of St. Louis (the “LCRA”) for itself and on behalf of the City of St. Louis, Missouri and Redeveloper (the “Agreement”) hereby certifies to the LCRA as follows:

Terms not otherwise defined herein shall have the meaning ascribed to such terms in the Agreement.

IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand this         ^th day of August, 2006.

EXHIBIT 4

Pinnacle Entertainment, Inc.

Compliance Plan

A. “Certification” means the process by which the City of St. Louis determines a person, firm or legal entity to be a bona fide minority or woman-owned business enterprise (M/WBE). For purposes hereof and notwithstanding anything herein to the contrary, certifications of M/WBE by the City of St. Louis, Missouri Regional Certification Committee (MRCC), Illinois Department of Transportation (“IDOT”), and/or any other certifications agreed to by the Company Compliance Director and the City Compliance Officer from time to time for local firms shall be recognized as eligible to participate for contract goal credit on this project. For purposes of this Compliance Plan a local firm shall mean firms certified by one of the aforementioned agencies and located in the St. Louis Metropolitan area, as defined in Paragraph 2.P below. Each M/W/DBE firm must perform a commercially useful function in order to have their participation counted towards the contract goal(s).

B. “Compliance Plan” means this Compliance Plan as required by the Redevelopment Agreement which sets forth the requirements for the involvement of MBE’s and WBE’s on the Project.

C. “Construction” means surveying, geotechnical testing, preconstruction design and engineering contracts, professional service contracts relating to the development of the Project, construction of the Project and related activities.

D. “City” means the City of St. Louis, Missouri.

E. “City’s Contract Compliance Officer” means the City’s designated MBE/WBE compliance officer.

F. “Company’s Compliance Director” means the individual designated by the Company as its Compliance Director for purposes of this Compliance Plan.

G. “Executive Order #28” means Executive Order #28 promulgated by the Mayor of the City of St. Louis and extended by Executive Order #36, as may be

amended from time to time or as the same may be enacted as an ordinance by the City of St. Louis.

H. “General Contractor” means the Company’s general contractor for the Project.

I. “Goals” means a minimum of 25% involvement of MBEs and a minimum of 5% involvement for WBEs. The Goals shall take into account professional services, consultants, construction contractors, suppliers, vendors and concessions. The Goals are for the combined construction, development and operation of the Project. For illustration purposes, the Goals may be achieved by 45% MBE in the construction phase of the Project and 15% in the design phase of the Project.

J. “Good Faith Efforts” means the actions and/or required steps, which by their scope, intensity and appropriateness to the objective, can reasonably be expected to enable the Company and their General Contractor to fulfill the MBE and/or WBE Goals as outlined in the Mayor’s Order, as amended.

K. “LCRA” means the Land Clearance for Redevelopment Authority of the City of St. Louis.

L. “MBE” means a sole proprietorship, partnership, or corporation owned, operated and controlled by minority group members who have at least 51% ownership. The minority group member(s) must have day to day operational and managerial control, and an interest in capital and earnings commensurate with his or her percentage ownership.

M. “Professional Services” shall include, but not be limited to, accounting, legal, management consulting, advertising/public relations, market research, insurance consulting, human resources, financial consulting, information systems, architects, engineers, graphic designers, interior designers and environmental consulting.

N. “Project” means the casino, hotel, parking, luxury condominium, if applicable, and related amenities to be developed and operated by the Company in the Redevelopment Area (as defined in the Redevelopment Agreement). In measuring the achievement of the Goals, the cost of the Project shall mean the Project construction related costs not to exceed $243,000,000.00.

O. “Redevelopment Agreement” means the Redevelopment Agreement dated April 22, 2004 between the LCRA and the Company, as amended.

P. “St. Louis Metropolitan Area” means the City of St. Louis, the Missouri counties of St. Louis, St. Charles, Calhoun, Lincoln, Warren, Franklin, Washington and Jefferson, and the Illinois counties of Monroe, St. Clair, Clinton, Bond, Madison, Macoupin and Jersey, and such other areas as are agreed to by the City Compliance Officer and the Company Compliance Director.

Q. “Vendors” mean suppliers who provide goods and non-professional services to support the operations of the Project.

R. “Concessions” means businesses that lease space from the Company in the Project.

S. “WBE” means a sole proprietorship, partnership, or corporation owned, operated and controlled by a woman or women who have at least 51% ownership. The woman or women must have day to day operational and managerial control, and an interest in capital and earnings commensurate with her or their percentage of ownership.

Pinnacle Entertainment, Inc.

727 North First Street

St. Louis, Missouri 63102

telephone: 314 ###-###-####

facsimile:    ###-###-####

***@***

A. The Company will provide a copy of the Compliance Plan to the City’s Contract Compliance Officer for review and comment.

B. The Company will notify outside organizations and leaders designated by the City’s Contract Compliance Officer in the majority and minority communities of the City of St. Louis and the greater St. Louis metropolitan area of the Compliance Plan.

C. Summaries and specific notices about business opportunities with respect to the Project will be sent to such publications as the City’s Contract Compliance Officer shall reasonably designate, in addition to regularly utilized publications used by the Company in its regular course of business.

D. The Company and/or the General Contractor, as the case may be, will provide a copy of the Compliance Plan to all contractors and providers of goods and services for the Project. In addition, they will require all entities with which they do business to execute a statement acknowledging receipt, understanding and acceptance of this Compliance Plan and confirming their commitment to comply with the Plan.

A. Contracts which are Competitively Bid.

A. The City may count as MBE or WBE participation expenditures to M/WBEs that perform commercially useful functions in the execution of a contract. An M/WBE function is commercially useful when it is responsible for executing a distinct element of the work and carrying out its responsibilities by actually performing, managing, and supervising the work involved.

B. The City may count as MBE or WBE participation the dollar value of work or services performed by a MBE and/or WBE prime contractor, plus the value of subcontracts issued to M/WBEs who perform a commercially useful function. Only work actually performed by a MBE and/or WBE shall be counted towards the appropriate goal(s).

C. The total dollar value of a contract with a certified enterprise owned and controlled by minority women may be counted as either minority or women’s business participation, but not both. The Company will choose which category of participation the dollar value is applied.

D. The City may count as MBE or WBE participation a portion of the total dollar value of a contract with a joint venture equal to the percentage of MBE or WBE participation provided the M/WBE performs a commercially useful function (CUF) in the joint venture. The MBE and/or WBE joint venture partner must be Certified and the MBE or WBE participant in the joint venture must be responsible for a clearly defined portion of the work to be performed, equal to a share in the ownership, control, management, responsibility, risks and profits of the joint venture. The Company shall provide evidence of the joint venture agreement and other pertinent documents needed to ascertain the essence of the joint venture relationship prior to the awarding of any contract.

E. The City may count toward a bidder’s MBE and WBE goals, expenditures for material and supplies obtained from M/WBE suppliers and manufacturers, provided that the MBE/WBE assumes the actual responsibility for the provision of materials and supplies

F. The City may count as MBE or WBE participation a minimum of 60% of the expenditure to an M/WBE supplier when the supplier:

G. The City may count as MBE and WBE participation only those firms that have been Certified prior to bid opening. In the event that a contractor working on the Project becomes Certified after the commencement of work on the Project, the Company may request credit towards the MBE or WBE Goals from the City’s Compliance Officer, who shall issue a determination within 10 days of the receipt of the request by the Company. Pinnacle, may request the City to expedite its review of any M/WBE certification requests submitted to it in connection with the Project. In such event, the City may retain a third party consultant to review the certification, at Pinnacle’s expense, to review and make a determination of certification within or about 45 calendar days of receipt of a complete certification application, which shall not be unreasonably withheld. If a firm listed by a bidder in its bid documents has not been Certified, the amount of participation it represents will be deducted from the total MBE or WBE participation proposed to determine the actual level of MBE or WBE participation proposed to determine the actual level of M/WBE participation proposed by the bidder.

H. The Company encourages relationships between prime contractors and subcontractors with local M/WBE firms.

I. The Company shall be permitted to include all of its predevelopment activities for the Project with respect to meeting the Goals for the Project. The Company shall provide a detailed listing of all of its M/WBE predevelopment activities, including the vendors involved, and the value of their involvement in its report required under Section 4 hereof.

J. M/WBE vendors or suppliers are to be involved in the manufacture, warehousing or distribution of the supplies and materials for the Project. For those contracts where M/WBE suppliers act essentially as a broker and serve commercially useful functions, only their commissions or profits will be credited toward the Goals of the Project involved. The City Compliance Officer and the Company Compliance Director shall mutually agree regarding whether an M/WBE supplier is a broker.

K. Participation of DBE’s shall be applied to the Goals based on the definitions of MBE and WBE herein.

A. Any material deviation by a contractor or subcontractor from the M/WBE utilization proposal, as indicated in a majority contractor’s submissions, whether before or after contract award and whether before or after commencement of work on the project, shall be promptly reported by the contractor to the Company Compliance Director and by the Company Compliance Director to the City’s Contract Compliance Officer.

B. A contractor may be found in noncompliance of its contract for failure to meet the Goals and/or to demonstrate that affirmative actions were taken to identify and seek participation by M/WBEs; provided, however, that the contractor will be given written notice of noncompliance and a reasonable opportunity to be determined by the Company Compliance Director to take steps necessary to comply with the Goals of this Plan.

C. This Compliance Plan Program shall be administered by the Company in accordance with Section 4.16 of the Redevelopment Agreement. The Compliance Plan shall be monitored by the City’s Contract Compliance Officer.