RDA treasurer wants risks of city-owned casino proposal examined


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Originally Posted Online: Dec. 05, 2012, 9:22 pm
Last Updated: Dec. 05, 2012, 11:25 pm
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By Stephen Elliott, selliott@qconline.com

Davenport is "out of its mind" with its attempts to create a city-owned land-based casino, according to Riverboat Development Authority Treasurer Don Decker.

The RDA holds the gambling license for the Rhythm City Casino now owned by Isle of Capri. Davenport officials want to buy the casino for $46 million and move it off the river.

The casino proposal was not discussed at the Davenport City Council meeting Wednesday night.

Earlier Wednesday, Mr. Decker said "someone needs to help the city understand the risk versus the reward of a land-based downtown casino."

He and fellow RDA board member Chad Lewis have expressed concerns over the city's casino plans.Mr. Decker said he will work with certified public accountants to provide the RDA board with more information on the multiple risks involved with the proposed project.

Mr. Decker and Mr. Lewis have said they believe the city is planning a downtown casino, with the selection process weighted to favor such a site.

City administrator Craig Malin, however, has denied Davenport is solely considering a downtown location for a new casino.In a Wednesday letter responding to an email Mr. Lewis sent RDA board members last week, Mr. Malin said assertions by Mr. Lewis were "speculation and incorrect."

He added any conjecture the city wants to operate a downtown casino is "groundless," and requests for project proposals are not "tilted" to favor a downtown site.

"Please keep in mind the RFP scoring process only is intended to help assess which prospective developers move on to the interview process," Mr. Malin said. "Also, please keep in mind the city fully expects RDA board members to be involved in the scoring and interview process.

In October, the Davenport City Council gave Mayor Bill Gluba permission to sign a proposed asset purchase term sheet for the city's purchase of the casino. Since then, the location of a city-owned casino has been a point of contention.

Ald. Mike Matson, 8th Ward, voted against the term sheet, specifically a clause stating the city would pay IOC $5 million over the purchase price if Davenport built a new casino outside of downtown. The arrangement made for an uneven playing field for developers considering sites beyond downtown, Ald. Matson said.

Mr. Decker agreed, saying he believes the best casino location would be on Interstate 80 near Interstate 280.

"The city has got to get out of this thing altogether," Mr. Decker said. "The risk factor to the city's taxpayers is outrageous."

Mr. Decker said three Davenport aldermen are "nervous as hell" over the project.

Tara Barney, chief executive officer of the Quad Cities Chamber, on Wednesday said she has offered Mayor Gluba the names of people with good financial perspectives that might help the city with the project.

Davenport plans to finance the project with $48 million in general obligation bonds over 20 years. Mr. Malin has said the city would use casino revenues to pay off those bonds.

Mayor Gluba has said he supports a downtown casino but is open to other suggestions, including two casinos -- one downtown and another on the interstate. Developers have until Dec. 20 to submit proposals for the project; Mayor Gluba said the city has had about a dozen inquiries.

"Whether we get enough back, we don't know," he said. "We'll assess it at that time."

The RDA meets Dec. 14 and has asked its members to submit questions on the project.
















 




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