Posted Online: April 16, 2013, 6:58 pm

Davenport mayor defends city-owned casino plan

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By Stephen Elliott, selliott@qconline.com

DAVENPORT -- Davenport Mayor Bill Gluba is not willing to fold the city's hand when it comes to owning a land-based casino.

"Absolutely not," Mayor Gluba said Monday.

"Give me $5 million a year for the city of Davenport exclusively, and maybe we'll bow out. Until then, we're still in the game." Davenport gets about $1.7 million per year from the Rhythm City Casino, which the city wants to buy.

Mayor Gluba said Davenport aldermen are expected to discuss a motion at tonight's city council meeting to invite the Riverboat Development Authority, the nonprofit group holding the casino gaming license, to a joint public meeting regarding casino proposals.

But the RDA already is politely saying thanks, but no thanks, to meeting with the city, at least for now.

In a Monday letter signed by RDA President Mary Ellen Chamberlin and RDA chairman Gary Mohr, the two told Mayor Gluba they feel it would be "inappropriate" and "premature" for the RDA to meet with the city to "further discuss any of the proposals that have the city ownership/financing as requirements."

The RDA letter reminds the city the RDA "publicly stated (on March 4) its desire to seek alternatives to a city-owned, financed casino. We also indicated that if the search did not identify willing private sector developers, operators and investors, we may come back to the various city proposals."

Mr. Mohr said Tuesday a small group of RDA members are reviewing proposals and inquiries from private developers.

"We're (RDA) trying to look at proposals that don't require city risk," Mr. Mohr said. "We (RDA) said we would look to alternative proposals from private developers and investors where city and taxpayer money were not going to be involved.

"We're doing what we said we're going to do."

Owned by Isle of Capri, the Rhythm City Casino in Davenport in recent years has been at the bottom of the revenue chart among the three Quad-Cities casinos. The RDA receives 4.1 percent of adjusted gross gaming revenue from the casino annually, which comes to about $2 million.

The RDA disburses the money to nonprofit and civic projects. The city receives about $1.7 million annually from Rhythm City Casino's operations.

Both would like to receive much more.

In October, the city announced plans to purchase Rhythm City from IOC at a price ranging from $46 million to $51 million depending on the location of a new land-based casino.

The city received three proposals on Dec. 20 from would-be operators of a city-owned casino.

But on March 4, plans for a city-owned casino temporarily were shelved when the RDA decided to seek alternatives to a city-owned and financed casino.

Since then, the city has received three proposals: one a revamped proposal from Ingenus, along with proposals from Pollina Corporate Real Estate Inc., out of Park Ridge, and Peninsula Pacific, based out of California.

The city passed those proposals on to the RDA last month.

Of the three proposals, the city has determined Ingenus presents the best option for both the city and the RDA. Mayor Gluba said city staff and consultants have estimated the city would receive more than $8 million annually for 25 years under the Ingenus plan, and the RDA would receive more than $4 million.

Mayor Gluba acknowledged Monday there was criticism of the city owning a casino but defended the idea.

"We've crunched the numbers," Mayor Gluba said. "Unless something comes to my attention we haven't seen, it's clearly in the best interest of the community and the city to be owners of this thing.

"I want to give the RDA ample time. I respect they've got their role in all of this. They need to sit down and publicly look at these proposals. We've got all that firepower if they want to avail themselves of it.

"Hopefully, they will soon."