Originally Posted Online: Jan. 30, 2013, 10:04 am
Last Updated: Jan. 30, 2013, 10:31 pm
Davenport's casino plan delayed
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By Stephen Elliott, firstname.lastname@example.org
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Photo: John Greenwood|
Board members with the Riverboat Development Authority meet on Wednesday morning to further discuss a land-based casino that the city would own. RDA treasurer Don Decker comments during the meeting.
Davenport's plan to buy the Rhythm City Casino and move it from the river to land stalled in a pair of meetings on Wednesday.
Members of the Riverboat Development Authority, questioning the project's viability, delayed action on a proposed agreement with the the would-be operators of the land-based casino.
The RDA, a nonprofit organization that holds the gaming license needed for the city to fulfill its plans for a new casino, distributes roughly $2 million annually to civic and nonprofit organizations in the Quad-Cities through revenues from Rhythm City Casino.
Earlier in the day, the Davenport Community Improvement Corporation -- the nonprofit group the city created in November to oversee operations of the proposed casino -- also voted to delay the contract with the RDA while attorneys further review it.
During the later RDA board meeting, members sharply questioned projections by city consultant Gary Buettner that the casino would bring the city about $11 million per year.
"What if you're wrong?" asked RDA treasurer Don Decker. "I'm just looking at risk -- R.I.S.K.
"This thing could blow up on its a-- anytime," Mr. Decker said. "You understand what I'm saying? This is b-------, is what it amounts to. I mean you have been told on this board that no one would come forward."
Mr. Decker said that's not true. He said there are four private "big hitters" interested in a Davenport casino, including Hard Rock Casino.
He said the failure to lure casino operators to show interest in the project is because of the city's control and oversight. He said the nine-member DCIC board created by the city does not have the financial expertise to run a casino.
"I don't know who in the h--- is an operator putting this kind of money into it that would want to report to a nine-man board that not one person on the board understands how to run a casino," he said. "And, that's your board. You've got to make a decision."
Fellow RDA member Chad Lewis said he wasn't comfortable with the taxpayer liability -- estimated at about $80 million -- if the project fails. He noted Moody's recently changed Davenport's bond rating to a negative outlook, based in part on the new risk posed by expected ownership of a casino.
RDA board member Christine Frederick was concerned with signing an operator's contract without knowing who the actual operator and developer were.Ms. Frederick said the RDA can't maximize it's gaming license without knowing who the players are going to be.
"We have a fiduciary duty to maximize our license," she said. "And I don't think we can do that if we don't know for sure who the developer is going to be.
"If we have an interstate casino, it's my belief our license will be maximized. If we have a downtown casino, I don't think it is," she said. "We need to have that piece in this contract before we vote on it."
City administrator Craig Malin emphasized to the RDA it would double its revenues under a new agreement.
Ald. Jeff Justin, who along with Mr. Malin, sits on the DCIC board, told RDA members the city went into the casino business to keep money in the community.He said it's part of a strategy to diversify revenues and, hopefully, lower property taxes similar to what a city-owned casino in Dubuque does.
Mr. Buettner said the city would look at different financial options, including interest-only loans.
Organization: Davenport Community Improvement Corporation (DCIC)
What it is: City-created nonprofit board designed to oversee operations of Davenport's proposed land-based casino
What it did Wednesday: Directed its attorney to finalize an acceptable agreement of an operator's contract with the Riverboat Development Authority. The group is expected to approve the operator's contract within seven days.
Organization: Riverboat Development Authority (RDA)
What it is: Nonprofit group that holds the state gaming license needed for a Davenport casino
What it did Wednesday: Discussed but took no vote on an operator's contract with the DCIC. RDA President Mary Ellen Chamberlin, a DCIC member, asked RDA members to review the proposed contract. The date of the RDA's next meeting has not been set.