Officials from Davenport, the Riverboat Development Authority and the Isle of Capri plan to update the Iowa Racing and Gaming Commission Thursday on the city's proposed purchase of Rhythm City Casino.
City officials plan to pay $46 million to acquire Rhythm City Casino from Isle of Capri and move it to an undetermined location. But the IRGC must approval the sale.
The IRGC meets at 8:30 a.m. Thursday in Johnston, Iowa. Mary Ellen Chamberlain, director of the RDA which holds the state gambling license for Rhythm City, said she thinks meeting with the IRGC is an important step towards a land-based city-owned casino in Davenport.
"One, they (IRGC) would expect the RDA to be there if the development is moving forward," she said.
"What I cannot say is the (RDA) board has totally approved the project at this point," she said."However, I will be there for any questions and answers. We're (RDA) still waiting to get a little more information."
The city and the Isle have arrived at a nonbinding term sheet for the city's purchase of the casino. City officials see it as a first step to opening a land-based casino in Davenport and removing the existing Rhythm City Casino from the riverfront.
An August 2010 report by Cummings Associates on gaming revenue projections said Davenport and Bettendorf casinos were under performing. In it, Will Cummings blamed the performance on the "old-style riverboats" he said weren't as attractive and customer-friendly as land-based facilities.
He noted the new Jumer's Casino, opened in December 2008 at the intersection of Interstate 280 and U.S. 92,"leapfrogged"the Davenport and Bettendorf boats.
On Monday, IRGC chairman Jeff Lamberti said it will look at issues such as the quality and certainty of financing of Davenport's proposal. He said a city-run casino "would be a significant precedent."
Davenport city administrator Craig Malin has said the purchase would be funded with future gaming revenue, not property taxes.He estimated financing for 20-year obligation bonds would cost $3.5 million a year over 20 years.
Ms. Chamberlain said the RDA uses its share of casino revenues to issue about $2 million annually in grants to community organizations and projects.The RDA plans to meet Wednesday to distribute roughly $900,000 for its fall cycle.
"We were getting a little more than $3 million in our heyday," Ms. Chamberlain said. "That was (in 1991) when we were the only boat around."
Mr. Malin has said a land-based city-owned casino could nearly double the amount available for RDA grants.
The casino posted $8.26 million in operating income and $10.48 million in adjusted earnings in fiscal year 2012.
Ms. Chamberlain said the IRGC usually grants casino licenses the first Thursday in March. If the proposed Rhythm City buyout is completed, the transaction could close as early as mid-2013 with a land-based casino opening by 2015, according city officials.