Originally Posted Online: Nov. 28, 2012, 10:16 pm
Last Updated: Nov. 28, 2012, 10:46 pm

Davenport aldermen approve appointments to oversight board for proposed casino

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By Stephen Elliott, selliott@qconline.com

DAVENPORT -- Aldermen on Wednesday approved Mayor Bill Gluba's appointments to a nonprofit board that would oversee operations of a proposed city-owned, land-based casino.

City officials plan to pay $46 million to acquire Rhythm City Casino from Isle of Capri and move it to an undetermined location. The Iowa Racing and Gaming Commission and the Riverboat Development Authority, the nonprofit group which holds Rhythm City Casino's license, must approve the proposal.

On Nov. 14, aldermen approved creating the Davenport Community Improvement Corporation to oversee the proposed casino. Last week, Mayor Gluba announced his appointments to the DCIC:city administrator Craig Malin;Police Chief Frank Donchez;Ald. Jeff Justin, 3rd Ward; Riverboat Development Authority President Mary Ellen Chamberlin; RDA board member Christine Frederick; attorney Kelli Grubbs; and Tri-City Building Trades Executive Director Rory Washburn.

The seven were approved in an 8-1 vote on Wednesday, with Ald. Mike Matson, 8th Ward, opposed. Ald. Justin was not at the meeting.

Ald. Matson expressed concerns about city staff being on the DCIC board, as well as Ms. Chamberlin and Ms. Frederick.Since 1991, the RDA has used its share of casino receipts to award more than $53 million to community organizations and projects.

"There may be a little conflict (of interest), especially with the RDA being a separate entity which is getting millions of dollars from the DCIC," Ald. Matson said. "The (RDA) director is sitting on the RDA board and on this board.I'm concerned about that."

Ald. Barney Barnhill, 7th Ward, voted for the DCIC appointments but said he would have liked to see more business people on its board.

Mayor Gluba said DCIC bylaws prevent RDAmembers from changing the amount of money allocated to it.

"It's already prescribed in the ordinance," he said, notingthe RDA would receive 4.1 percent of the proposed casino's adjusted gross revenue with a minimum of $2 million annually. The bylaws also statethe RDA's revenues eventually will increase to 4.5 percent, and then 5 percent, of adjusted gross revenue, Mayor Gluba said.

RDA board members met earlier on Wednesday, with Ms. Chamberlin asking them to review information on the casino proposal and meet again on Dec. 14.

RDA board chairman Gary Mohr wants the board to have the chance to review all materials related to the proposal. He said healso wants to see the development proposals received by Davenport by the Dec. 20 deadline.

"I want to find out what kind of investment it's going to be, where it's going to be, and who the operator is going to be," he said. "There's still a lot of questions from RDA's standpoint before making a final decision."

Davenport city attorney Tom Warner told RDA board members the city "just wants to get it right.

"We want everyone to be comfortable and know what's going on," he said. "If it takes a little longer, it takes a little longer."

Ms. Chamberlin said the city wants to make a presentation at the Iowa Racing and Gaming Commission's January meeting. There is no February meeting, she said, and gaming licenses come due in March.

Both the city and the RDA could make presentations and seek a gaming license at the March IRGC meeting, Ms. Chamberlin and city officials have said.

Davenport accountant and consultant Steven Landauer told the RDA he had reservations about the project. He questioned why the city was committed to paying IOC a nonrefundable $2.5 million for a project the IRGC may not approve.

"I think the long-term financial viability of this thing is maybe taking a backseat to some egos to put it downtown versus somewhere else," Mr. Landauer said.

City officials say the casino's sale to Davenport could close by mid-2013, with a land-based casino open by 2015. Ms. Chamberlin said IRGC board chairman Jeff Lamberti has told her there will be a land-based casino in Davenport.