Continued uncertainty over Davenport’s proposed $46 million acquisition of the Rhythm City casino has exposed a possible rift in the Riverboat Development Authority board.
RDA treasurer Don Decker, a vocal opponent to the city’s purchase of Rhythm City, said there could be six votes that could potentially sink an operating agreement between the board and the city. The RDA is the license holder for the Rhythm City.
The city proposes using municipal bonds to buy the casino from the Isle of Capri and has three potential developers for a land-based casino.
Several RDA board members — and RDA president Mary Ellen Chamberlin — emphasized Friday that the board has taken no votes yet and that board members are still gathering information about the city’s proposal and the three development proposals submitted Dec. 20.
Decker points to not being initially involved in negotiations between the RDA and city on the operating agreement as what sparked his anger, saying his financial background was ignored.
“The RDA should be involved in this, not the city,” Decker said. “I got so frustrated, I couldn’t see straight.
“I told Mary Ellen that I’m not going to vote on this until we have six votes (against it) out of 12.”
He raised an old concern that the city has slanted the development process toward a downtown casino, saying City Administrator Craig Malin told officials of Hard Rock Casino company the city was interested only in a downtown location.
Malin said he gave officials from the Hard Rock a tour of the city, including possible locations along the Interstate 80 and 280 corridors.
“He was never present with any discussion I ever had with anyone from the Hard Rock Casino,” Malin said of Decker.
Also, of the three casino proposals received by the city, one by Ingenus Gaming Consultants that has an interstate location scored the highest from a 13-member committee that reviewed them. Decker gave the interstate proposal a score of 95 out of a possible 125, while giving two downtown proposals scores of zero.
“I was just boosting that one,” Decker said. “I was trying to make a statement.”
Decker is a long-time proponent of a Davenport casino along the interstate corridor and says that location also has the support of the Iowa Racing and Gaming Commission. He thinks that if the city drops its effort to buy the Rhythm City and promotes an interstate casino site, national gaming companies would be interested.
Iowa Racing and Gaming Commission chairman Jeff Lamberti said Friday there would be interest, but it wouldn’t be a simple process to get a casino along the interstate, since the Isle of Capri would still need to be engaged for a sale.
“It is probably not as easy as represented, that we could simply open this up and say private companies come on in,” Lamberti said. “There has clearly been interest from current operators in the casino industry for an interstate location there, but that is subject to the correct terms with the Isle.”
A proposed operating agreement between the city and the RDA that is awaiting a vote would increase the RDA’s share of the casino’s 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 bond debt has been retired. Also, the city has agreed to allow two RDA appointments to the Davenport Community Improvement Corp., the nonprofit organization that will oversee casino operation.
Chamberlin questioned Decker’s assessment of the potential RDA board vote, saying she could count it differently.
“I don’t know who Don is counting,” she said. “I know who has asked more questions than others. I know who has taken the opportunity to get more information.”
Reached Friday, Decker and board member Christine Frederick said they are against the agreement, but Frederick said her vote could change with more information. Frederick also serves on the Davenport Community Improvement Corp. board.
Chad Lewis has also been vocal in his opposition to the city’s acquisition. He didn’t return a call for comment Friday.
Decker wouldn’t name the three other board members he claims are against the city’s proposal.
“I don’t know of anyone doing vote counting,” said Betsy Brandsgard, the RDA board secretary. “I haven’t talked to any board members on what they think.”
Board president Gary Mohr said he is still combing through the information on the proposal and wants to make sure the rest of the board has enough information to reach a decision. He didn’t discount Decker’s claim.
“I don’t have a clue how Don has come up with that number,” he said. “He may be right.
“I’m not sure what six he is thinking. I don’t know if he is right.”
Also reached by phone Friday were board members Michael Reyes, Marie Christian and Becky Bray. Reyes and Bray said they hadn’t made a decision yet, and Christian referred a reporter to Chamberlin. Messages for Alta Price, Jay Justin and Michael Cole weren’t returned. Carol Sommer couldn’t be reached for comment.
Davenport aldermen questioned Decker’s motives, with Alderman Ray Ambrose, 4th Ward, going so far as accusing him of bullying. Alderman Bill Boom, 3rd Ward, described it as a “political hatchet job.”
“I don’t think he is a fan of Davenport and the downtown,” Boom said. “Most of his actions are counter to productive growth.
“He is welcome to his opinion, but if you feel that strongly, move to Davenport, run for City Council and weigh in on the issue.”
Boom wasn’t the only alderman to point out that Decker isn’t a Davenport resident.
“All his blustering and efforts to torpedo this Davenport project makes me wonder if he has his own ulterior motives and his own personal agenda,” Alderman Bill Edmond, 2nd Ward, said Friday. “For a Bettendorf resident, he is taking a great deal of interest in Davenport.
“He may say it is because of his position on the RDA board, but Davenport is offering the the best deal by far the RDA has ever seen or ever will see, i.e. higher percentage of the gross, the ability to appoint board members to the DCIC. No private gaming company would ever agree to let them appoint one of their own.”
Decker has said the RDA currently has a guaranteed amount from the Isle of Capri to distribute, while no offer is coming from the city. Davenport officials have pointed out that under the proposed agreement, the RDA would receive $3.8 million annually, compared with the current $2.1 million the RDA distributes.
He isn’t bothered by the aldermen’s criticisms, noting his experience as a financial adviser, pointing out his work with the Isle of Capri and Bernie Goldstein, chairman of the Isle’s board and a major player in the development of riverboat gambling. Goldstein died in 2009.
Decker said that experience serves him better in analyzing the casino situation.
“What do they think I do out here?” Decker asked. “None of these guys have ever borrowed money except to buy their house.”