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.