Davenport aldermen appeared to favor an interstate casino and requested a special meeting next week to advance negotiations after hearing a presentation Wednesday on projected financials for of two competing developments.

Casino consultant Gary Buettner, who is retained by the city, gave the presentation based on a more detailed analysis given to aldermen Tuesday showing that the interstate casino proposal by Ingenus Management and Consulting would provide greater gaming revenue to the city.

After the meeting, two aldermen requested a special meeting next week to move city staff to start negotiating with Ingenus, a Minnesota-based casino operator that has partnered with Financial District Properties, a Quad-City development company headed by Rodney Blackwell.

Buettner estimated gross

gaming revenue at $91.3 million and net revenue to the city of $11 million from the Ingenus proposal.

By comparison, he estimated the gross gaming revenue of a downtown casino proposal by Restoration St. Louis at

$67.2 million, with net revenue to the city of $10.5 million before debt service is paid.

Buettner, a former Jumer’s Casino & Hotel executive, also told aldermen that the opportunity for expansion is greater with an interstate casino and likely will draw retail into the area.

Aldermen were impressed with the presentation.

“In just 15 or 20 minutes, you just blew this thing wide open,” Alderwoman Sheilia Burrage, 5th Ward, said.

The city of Davenport, wanting to maximize revenues from the city’s gaming license, is in the process of acquiring the Rhythm City casino from the Isle of Capri for $46 million. The interstate location requires an additional $5 million premium payment.

Alderman Bill Edmond, 2nd Ward, wanted the council to direct city staff to begin negotiating immediately with Ingenus on a development agreement, but was shut down by Aldermen Bill Boom, 3rd Ward, and Barney Barnhill, 7th Ward. Boom’s ward includes the downtown.

After the meeting, Edmond and Alderman Nathan Brown, 1st Ward, asked City Administrator Craig Malin to call a special meeting so the council can resolve to enter into negotiations with Ingenus.

It takes a request from two aldermen or the mayor to schedule a special meeting. The council meets on the second and fourth Wednesdays of the month, with committee of the whole meetings on the first and third Wednesdays. Next week is the fifth Wednesday of the month, so no meeting would be called.

After Wednesday’s meeting, Edmond said he was frustrated by aldermen not wanting to move forward.

“What’s more to look at?” he said. “It comes down to two numbers, $91 million and $67 million.”

Brown expressed the same thing during the meeting.

“I’m looking at this debate to come to a conclusion soon,” he said. “You can only crunch numbers so much.”

Even Alderman Mike Matson, 8th Ward, who voted against the initial resolution accepting the city’s initial purchase agreement, pointed to what Buettner’s figures showed.

“If we’re not going to have money to do things other than have a casino, why are we doing this?” he said. “I want the money so we can do things for the community.”

Malin told aldermen the deadline for getting an item on the Iowa Racing and Gaming Commission agenda for its March 7 meeting was Feb. 21. If the council waits for its usual cycle to approve negotiating with Ingenus, the city would only have eight days between the Feb. 13 meeting and the racing and gaming commission deadline. In that case, a vote by the commission on the city’s proposal likely would not occur until June.

While the Restoration St. Louis proposal includes equity in the downtown casino, Buettner said cash flow would be greater from the Ingenus casino.

Alderman Jeff Justin, 6th Ward, who chairs the council’s finance committee, favored cash flow over equity.

Justin, who earlier in the day sat in on a meeting of the panel that interviewed the developers, said no formal vote in favor of a specific project was taken but that he heard opinions from several members favoring the interstate project.

“They know where the most revenue is going to come from,” he said. “They want to do what is in the city’s best interest, and this is what is in the best interest.”

Alderman Gene Meeker, at large, who also sits on the interview panel and the council’s casino negotiating committee, said he heard the same thing.

“I think there are several favoring the interstate,” he said.

Boom and Barnhill aren’t alone in wanting to get more information before moving forward. They have an ally in Mayor Bill Gluba.

“We’re going to be drilling down into these numbers he said. “There are further questions to be asked.”

Gluba expressed concerns that gamblers who use the Rhythm City won’t have the opportunity to gamble at an interstate casino, but Buettner told the council that 75 percent of the Rhythm City’s regular gamblers would follow the casino to the interstate.

Opponents have said the city shouldn’t be in the casino business and should attract a national gaming company, but Buettner said the competitive Quad-City gaming market, high investment costs and lower revenue make a Davenport project unattractive.

While the city would be happy with seven times more than it currently receives from a casino, a national publicly traded gaming company would need at least 15 times the revenue from a casino in Davenport.

“We need to get over that,” Meeker said.

(15) comments

Voice of Truth

Gee, We also might need a marching band too. Right here in River CIty! Folks the numbers need to be vetted more and scrutinized more. This is so much money...every single angle of this deal needs to be examined. One of the angles that neeeds to be examined is where the number projections are coming from and what motivates them. Lets be real, these are Projections - not real money - yet. Does the consultant who is producing these projections have an interest in making sure it moves ahead? Such as further consulting projects and income? If so, this would taint his projections to be self serving and not independent. He could be just telling you what you want to hear so the project moves forward and he continues to be retained as the "Consultant". Nice long term income...for a couple of years until the numbers dont work out, but by then there will be many excuses to pass them off on and no one will be the wiser. These are projections people. Not historical auditing. But the City council appears to be spending the revenue even before it is made. Slow down. Make sure this is correct and make sure you understand the total impact.

Slym88
Slym88

As a downtown business, I wouldn't appreciate the casino that was downtown helping our downtown community, moving to a cornfield, help the people of your town or the casino itself? Keep it downtown!

rkr55555

After all the money that we have poured into our downtown the last 20 years trying to revive it, this would be, could be, the final piece that we need. There are so many cool things in Downtown Davenport that would compliment a Casino addition! So many businesses have stayed the long haul just waiting for a chance to flourish. It's time they are rewarded.

Mister Know It All
Mister Know It All

Horse hockey! What is there downtown that gamblers will frequent? Casinos are self contained entertanment centers. The way they make the most money is by keeping you there. They don't wan't you spending your money elsewhere.

JS824

I remember being told that same line in 1991. How the President River boat was going to revitalize downtown. Now they are paying 46 million to get rid of it. Loft apartments, shopping, parks, restaurants have helped downtown. Keep focus on putting amenities that people need to live downtown, grocery stores, small movie theater, shopping, better transit system.

Hereandhere

Gluba is worried that downtown gamblers will not have the bus fare to get to the interstate. Very telling about who he expects to be the bread and butter gamblers - locals on welfare. Happy for once I live across the river.

iadude

Everybody keeps talking about how pretty. How much money they will make. But WHY the hurry? Anytime something like this comes up, it's always- let's hurry up and do it. Are they afraid someone else will buy it first- that's not going to happen. It's just like a health care bill- pass it now- read it later. This smells. It wreaks of corruption. I guess it takes mathematically challenged people to take money from other mathematically challenged people. The Flying Pig Casino will not fly far.

Crusader

The council should take some time to evaluate the whole proposal. First, Mr. Buettner's numbers are considerably different than Mr. Cummings' numbers, so that is a red flag. Second, none of the infrastructure costs are factored into this number. Earlier, didn't city staff say it would cost $12 million and at least two years to get sewer out there? And that is the city's share, not the developer. If that is to be paid with gaming revenue versus sewer revenue (which it should, no reason for all citizens to support a casino with their sewer payments) that would reduce the city's share proportionally. The council should also consider the increase in property values for the downtown properties. While the interstate site will eventually develop on its own and provide new tax base (new marginal revenue), only redevelopment of the downtown site will significantly improve those property values. Last, Mr. Buettner's statement that a casino would, "likely draw retail", can be proven false by the Jumer's experience. Four years and no retail, no golf course and no expansion. There is much more to this than simply looking at the two numbers.

QuadCityImages
QuadCityImages

Nitrous, I normally like your comments, but yours just tells me that people are deciding this without all the facts. Restoration St. Louis already has control of the entire block that they want to renovate. They'd be building a massive parking garage on top of the casino. The block they're looking at doesn't flood, and nobody will shed a tear over the two buildings they want to tear down. There's also room for a future additional hotel tower between the Parker and Putnam buildings. So basically all of your concerns have been addressed. Adding a hotel downtown also makes the River Center more successful because there would be a 3rd hotel connected to it with a skywalk across Brady Street. The only benefit to the interstate location is a possibility of $500k more money. There are dozens of benefits to a downtown location.

nitrous55

I also think the interstate would be the better option. Clear room to build/expand, easier access for people out of town and less hassell than trying to build in the downtown area. In the downtown, you need to find a place where it doesn't flood and you are limited on what you can build and have for parking. Can you imagine the outrage if you try to tear down an old building and build a new one or put in parking?

Crusader

The City Square site has access to tons of parking. And it does not flood up to 2nd Street between Harrison and Brady. The Redstone ramp, Harrison Street ramp and the lot at the corner of Main and 2nd were identified as under-utilized in the parking study and the meters were taken out due to excessive parking inventory.

QuadCityImages
QuadCityImages

I can't believe we're going to build the Walmart of casinos. The Ingenus proposal is designed to look like a barn!!! That way people can visit Davenport and leave again without seeing that we're anything other than a bunch of farmers out in the cornfields.

The way I read this article, despite the big difference in Casino revenue between the two proposals, the difference in revenue to the city is only $500,000? That's hardly a no brainer. In fact, if you look at the incredibly high quality work that Restoration St. Louis has been doing downtown, I would say that its a no brainer to go with them.

sundance

You had better go back and read the article again. The $11 million at the interstate location is after debt repayment. The $10.5 million for the downtown site is before debt repayment. Big difference. Total revenue is $91.3 million vs $67.2 million.

1of3

An interstate casino really is the best option, there is more room for expansion, more room for parking. We can't draw in the truckers and the motor homes like jumors does with a downtown casino because the parking is so limited. I do not believe there will be any problem getting current Rhythm City regulars to go to an interstate location. If your an avid gambler your going to follow your favorite game if you can.

GEM

I have to agree with Mayor Gluba on this one. Most of the current Rhythm City regulars would probably move to Bettendorf instead of traveling the interstate.
Jumers is already on the interstate. That would be a tough competition.

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