Posted Online: Feb. 19, 2013, 8:53 pm
Land-based casinos, controversy have history in Davenport
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By Stephen Elliott, email@example.com
Land-based casinos and controversy are nothing new in Davenport where a history of promises and grand plans have met with success and disappointment.
On July 1, 1989, legislation was passed allowing the Iowa Racing and Gaming Commission to license qualified sponsoring organizations to conduct gambling.The games could take place on excursion boats in counties where the voters approved it by referendum.
Voters approved it, and on April 1, 1991, Bernard Goldstein dropped anchor on The Diamond Lady, an excursion boat he brought to Bettendorf. Shortly after, The President Riverboat Casino, owned by The Connelly Group, set sail in Davenport.
Both Mr. Goldstein and John Connelly died in 2009.
"Everybody was trying to find jobs somewhere else. It was doom and gloom," Mr. Goldstein said of the local economy in October 2002.
"Most of the cars people were driving were falling apart. Plants were closing. This is the one thing that cheered everyone up. It meant some fun coming into people's lives. And, it meant jobs," he said.
Mike Whalen, president and chief executive officer of Heart of America Group, Moline, was part of the initial push for casino gaming in Iowa.
The idea, he said, came out of brainstorming sessions in 1986 and 1987. "We were throwing ideas out there," he said. "There was a real depression around here and we were desperate for development ideas.
"We didn't realize it at the time, but we were starting a whole industry. I was one of the ones that put together The President. I went out and tracked down John Connelly. I flew out to Pittsburgh and pitched the idea," Mr. Whalen said, adding Mr. Connelly agreed to it.
Mr. Whalen was not there when The President declared bankruptcy. In fact, he sued President Riverboat Casinos, charging that he was cheated out of profits from the project he helped bring to town.
In March 2000, Isle of Capri bought Lady Luck Casino (which had replaced Diamond Lady) and Hotel in Bettendorf. In October 2000, Isle completed its buyout of The President Casino and Blackhawk Hotel in Davenport for $58.2 million.
Riverboat Development Authority treasurer Don Decker was on the RDA board when The President went bankrupt, and said bondholders lost about $32 million."It was a full-fledged bankruptcy."
Mr. Whalen now is the owner of 33 restaurants and hotels in six states. He is building a new 127-room Holiday Inn and Suites, and 100-square-feet of retail space near Lowe's Home Improvement on Elmore Avenue.
He has no interest in re-entering the casino business, but does have some advice for the city of Davenport.
"I think the city needs an ironclad understanding of what they're getting," and make sure there are no holes in the contract, Mr. Whalen said.
"The original development agreement allowed so many outs in my opinion. It was so vague, that we (Davenport community) did not reap the benefits we should have," in the initial deal with The President.
As for the city-appointed Davenport Community Improvement Corporation, which will oversee casino operations, Mr. Whalen said the board must not be seen as a politically-appointed board.
"You've got to look at it as operating a business," Mr. Whalen said. "I hope they (Davenport) can. I will say the mayor and the city council don't have a hidden agenda. They just want something that benefits the city."