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Operators of nearby casinos predict gloom if Cedar Rapids gets casino license

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Operators of nearby casinos predict gloom if Cedar Rapids gets casino license

Sep 27, 2017 at 9:38 am | Print View

CEDAR RAPIDS — Casino operators and their supporters from throughout Eastern Iowa lined up to oppose a bid for granting a Cedar Rapids gaming license during a public hearing Tuesday before state gambling regulators, much like they did in 2014 when a similar effort was rejected.

Dan Kehl, chief executive of Elite Casino Resorts, which operates Riverside Casino & Golf Resort, Rhythm City Casino in Davenport and Grand Falls Casino & Golf Resort in Larchwood, spoke of “drastic” staffing cuts in Riverside if another license were granted, and noted market conditions are as dreary as they were three years ago.

“Nothing has changed in this market and we urge you not to grant Cedar Rapids a license,” he told the Iowa Racing and Gaming Commission.

Representatives from casinos in Tama, Waterloo and the Quad Cities also spoke against a license, saying the market is saturated, the gaming crowd is shrinking and there’s simply not a good reason to destabilize existing casinos.

The commission traveled to Cedar Rapids for morning site visits of the three casino proposals, followed by an afternoon public hearing. The commission plans to make a decision in November.

The proposals are:

• A $40 million to $55 million “boutique” Wild Rose Cedar Rapids on First Avenue SE adjacent to the Skogman building, proposed by Wild Rose Entertainment and led by Gary Kirke.

• A $105 million to $118 million Cedar Crossing Central in a skydeck tied to the DoubleTree Hotel and U.S. Cellular Center, proposed by Brent Stevens of Peninsula Pacific and Steve Gray of the Cedar Rapids Development Group.

• A $165 million to $187 million Cedar Crossing on the River on First Street SW, nearly identical to the project rejected by a 4-1 gaming commission vote in 2014 based largely on projections it would cannibalize other casinos. It also is proposed by Peninsula Pacific and Cedar Rapids Development.

Jonathan Swain, who is involved in the two Cedar Crossing proposals, urged commissioners not to base their decision solely on the effects on other casinos. He touted Cedar Crossing Central’s plans to double the number of concerts at the U.S. Cellular Center, up to 90 or 100 a year.

The gaming industry in Iowa is flat, he said, and urged a different way of thinking. A new investment coupled with complementary entertainment is the only thing that will grow the industry and draw new people, he said.

“This is an opportunity for growth in the state,” Swain said.

Dick Meisterling, chairman of Cedar River Alliance for Gaming, which would be the co-license holder with Wild Rose, flipped sides from being a Cedar Crossing investor in 2014 to backing Wild Rose today.

Meisterling pointed to the benefits Wild Rose would provide to surrounding businesses.

Barbara Hames-Bryant, a colleague on the Alliance, noted Wild Rose vowed to contribute 5 percent of adjusted gross revenue to local nonprofits, or about $2.5 million per year.

“We have people from all different walks of life,” Hames-Bryant said of the Alliance. “We understand all the needs of Linn County and which organizations are neediest and who can spend most efficiently to help the most people.”

Dan Long, a pastor with Jesus is the Way Church in Cedar Rapids, was among a handful of local residents opposed to any casino. He displayed a sign at the hearing urging repentance.

“It’s a sin,” he said. “Every preacher in town ought to be out here today.”

Most local people who spoke at the hearing favored a casino, and among those supporters most favored the Cedar Crossing group.

“It’s sour grapes being against a small casino here,” said Melanie Primasing, owner of Simply Divine Candy, who spoke in favor of Cedar Crossing Central. “There’s enough for everyone.”

Tami Culver, an investor in Cedar Crossing, said people in Cedar Rapids don’t participate in gambling on a regular basis because surrounding casinos are too far away. She cast doubt on whether those casinos would lose patrons.

“There’s no reason why people in the second largest city should have to drive an hour away for entertainment,” she said.

A number of public officials in communities where Wild Rose operates, including Clinton and Jefferson, spoke of the positive experiences they’ve had.

“You don’t need to look any further (than Wild Rose) to find an honest, established operator,” said Les Shields, vice president of Clinton County Development Association.

Gaming Commissioner Jeff Lamberti said site visits are an important part of the decision-making process. He asked one of the few questions from commissioners — wondering about the safety of building a casino above railroad tracks, as Cedar Crossing Central is envisioned.

Lamberti said in his mind the opposition from public officials in Cedar Rapids and Linn County to the Wild Rose proposal “does matter,” but is not a deal-breaker in granting a license or not.

“When we see a flat industry, it makes our jobs harder,” he said. “We don’t want to see it stagnate.”

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Video from the hearing

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