The Davenport Community Improvement Corp. delayed a vote this morning on an operating agreement with the Riverboat Development Authority as the document will be revised.
In a brief meeting, the corporation’s board voted 6-0 to delay approval of the agreement for up to seven days while the changes are made. Chairwoman Kelli Grubbs, City Administrator Craig Malin, Alderman Jeff Justin, Rory Washburn, John Roche and Randy Rathje voted for the delay. Members Mary Ellen Chamberlin and Christine Frederick, who are members of the RDA, didn’t attend the meeting. Police Chief Frank Donchez was out of town.
The city of Davenport is in the process of purchasing the Rhythm City Casino for at least $46 million from the Isle of Capri, The city has set up the Community Improvement Corp. to operate the casino once the sale is complete, and it would work with the RDA, which holds the license for the casino.
Attorney Steve Hunter reviewed the operating agreement for the corporation and reported there were no issues regarding the key financial part of the document but there were transitional issues that need to be “more defined so there aren’t conflicts later.”
The agreement would increase the RDA’s share of the adjusted gross revenue from 4 percent to 4.5 percent once the casino goes land-based, then to 5 percent after 50 percent of the city’s bond debt has been retired. The city has proposed purchasing the casino by issuing bonds.
Hunter said he was in contact with RDA attorney Bob H. Gallagher about the changes.
“I don’t see any problems working things out with Bob,” Hunter told the board.
Performance obligations in the agreement are a concern, Grubbs said after the meeting. The document was negotiated by the city, which could meet those obligations, but perhaps not the corporation. The Davenport Community Improvement Corp. will lease the casino assets from the city and oversee operations once they are acquired from the Isle of Capri.
“You want to do things the right way at the beginning so you don’t have problems down the line,” Grubbs said. “We want to do good business from the start.”
Justin raised concerns about the timing of the delay, noting the RDA meets later today and could vote on the agreement. He said he would report the corporation’s action to his fellow aldermen who also meet later today to discuss negotiating with a developer.