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Davenport, IA Casino Plans Gather Steam

Posted on November 13th, 2010

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A casino in Iowa is one step closer to reality as a unanimous, 10-0 vote was cast by the aldermen of the city of Davenport. Their support will make it easier for developer Steve Edelson to construct a casino facility in the city’s downtown area. The vote is a bit in contrast with what a number of the city’s residents have forwarded in a forum last Wednesday night. They suggested that the casino should be built in a site that is near the interstate or they would rather not have a casino at all. The council members however went full-blast in their praise to Edelson’s firm, MSEG LLC based in Chicago, for making a commitment of $75 million for the project, as long as it would be situated in Davenport’s center. The city’s mayor, Bill Gluba, just before he witnessed the vote, remarked, “Davenport is a first-class city and it’s about time we are treated like a first-class city. The bottom line is this is about bringing money into our community and it’s about jobs. No public dollars are going into this and the $75 million invested is going to put people to work.”

The agreement for the development of the casino gives Edelson’s company permission to negotiate with the current casino operator of the city, Isle of Capri Inc., to transfer a gaming license that is currently held by the Riverboat Development Authority. Also included in the agreement is for the project’s investment to be at $75 million, a hotel with 75 rooms a gaming floor a 30,000 square feet and other improvements. Moreover, the contract also gives Edelson and MSEG 24 months of exclusive negotiation for the development of a sports arena also in the city’s downtown, should they opt to.

The development agreement will also entitle the city to raise its share in the revenue of the casino from 1.65 percent of weekly adjusted gross receipts which is the current practice to 1.89 percent. Moreover, the city will also require the property to have an assessed value of $55 for purposes of a bigger property tax. Even If all of these plans push through, everyone, including the aldermen and Gluba agree that there are still a lot of details that need to be tweaked. The parties involved in the agreement – Isle of Capri, Iowa Racing and Gaming Commission, investors and the RDA, all need to be satisfied. But the financial benefits are projected to be good for everyone, with the city gaining $2 million in gaming revenue and property tax revenue to reach up to $680,000. The Downtown Partnership is said to gain $300,000 in revenue and $3.4 million in revenue will be funneled to the Riverboat Development Authority, which is based on a gaming revenues share of 4 percent.

Alderman at-large Jason Gordon, said, “This act tonight is the equivalent to the firing of a starting gun in a race. We’re not turning dirt tomorrow, or next month. This is going to be a long, ongoing process.” The aldermen before the vote spent Wednesday answering questions from the residents of the city and weighing on criticisms on the project. Included in the objections of the project include the huge rush, why a downtown site instead of a more wholesome interstate site, and the sudden inclusion of the sports facility amendment. Alderman Bill Lynn, 5th Ward, explained that the city will have no ownership according to the agreement with either the casino or the sports arena, should both be built. Meanwhile, Alderman Bill Edmond, 2nd Ward, cleared that the city was not responsible for picking the downtown site; it was Edelson and his firm that selected the location. He explained, “It’s not the job of the council to tell a developer where to locate. We gave options and got out of the way. And that’s what government is supposed to do.”

Edelson explained that he chose a downtown location for his casino facility so that the growing momentum of growth in the heart city can be continued. With the renovation of the Hotel Blackhawk, a number of new housing projects and the investment in the city’s center worth $400 million for the past years, he wants to be a part of making downtown Davenport a booming entertainment location.