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Gambling commission members cast doubt on Cedar Rapids casino pitch
Nov. 23, 2016 6:30 am
CEDAR RAPIDS - Three of the five members on the Iowa Racing and Gaming Commission cited a flat market and said little has changed since a failed 2014 bid for a gambling license in Cedar Rapids, casting doubt on the prospects for a casino in the city.
Commission members last Thursday in Moravia discussed Wild Rose Entertainment's plan to seek a license for a so called $40 million 'boutique” casino as part of a new multiuse, four-story building across the street from the DoubleTree Hotel and Convention Center on First Avenue E in downtown Cedar Rapids.
'It's accurate to say their take on it is ‘Not much has changed,' ” commission Chairman Jeff Lamberti said on Tuesday of some of his colleagues. 'We haven't had tremendous population growth, tremendous economic growth, revenue growth at the casinos. We are not seeing anything out there that would tell us studies will come in any different.”
Still, Lamberti and fellow commissioners vowed to keep an open mind.
At the meeting, the commission directed staff to prepare a request for proposal - a process Wild Rose would follow to apply for a gambling license in Linn County. Those applications are due Feb. 13. The commission also ordered possibly two separate independent studies of market conditions.
Lamberti said those studies are likely to carry more weight than studies commissioned by casino investors. The independent studies doomed the 2014 bid from the Cedar Rapids Development Group, when the findings showed cannibalization of business from nearby casinos, such as Riverside Casino & Golf Resort.
The Cedar Rapids Development Group, which already has invested millions of dollars in a bid for a casino, led a successful ballot referendum to allow gambling in Linn County and proposed a $174 million plan called Cedar Crossing with a casino, restaurants and a hotel on city land on the west side of the Cedar River near downtown.
The Cedar Rapids Development Group, made up of dozens of investors, has a memorandum of understanding with the city of Cedar Rapids and Linn County in place through 2017 and 2019, respectively, to not support any third party bid for a casino without consent, which has not been granted in the case of the Wild Rose proposal. Wild Rose and local developers Steve Emerson and Hunter Parks, have announced a compensation plan to try to gain support from previous investors and have said they plan to move forward with or without expressed support from the municipalities.
During last week's meeting, commission members Kristine Kramer, of New Hampton, opened the conversation with doubtful comments about whether the market had changed significantly enough to change her mind about a casino in Cedar Rapids.
'Commissioner Kramer stated she personally has not changed her mind since the last time this discussion was held,” according to draft minutes of the meeting. 'She feels nothing has changed, but will always listen and keep an open mind.”
Carl Heinrich, of Council Bluffs, and Lamberti, of Ankeny, concurred.
Kramer, Heinrich, and Lamberti, joined Richard Arnold, of Russell, in voting against the bid in 2014. Dolores Mertz, of Algona, cast the lone supporting vote. The same members remain on the board. The terms of Lamberti and Heinrich expire in April, and it is up in the air whether they'd seek reappointment or be reappointed by Iowa Gov. Terry Branstad.
Brian Ohorilko, administrator of the Iowa Racing and Gaming Commission, said on Tuesday the commission's process is likely to be similar to the previous process. The Cedar Rapids application was filed in September 2013, the commission ordered two studies, and made a decision in April 2014, he said.
The market studies are to determine if there are any underserved markets in the state and are to look at any specific proposals that come in from Linn County, he said. The commission may select a vendor or vendors to conduct the market studies at its March 7 meeting, Ohorilko said.
Site visits, presentations before the commission and in public forums, a background check of applicants, and a question-and-answer between the commission and applicants is also likely to be part of the process, Ohorilko said.
The commission could rule in fall 2017, he said.
Tom Timmons, president and chief operating officer at Wild Rose, which operates three casinos in Iowa, said in a statement his group is 'pleased” with the application deadline, but did not address the comments by commission members about the market.
The Wild Rose plan for Cedar Rapids includes a 25,000-square-foot gaming floor on the second level with 600 to 700 slot machines, and 15 to 20 table games.
l Comments: (319) 339-3177; brian.morelli@thegazette.com