The city of Davenport showed no intention of backing away from its purchase of the Rhythm City casino in its responses Wednesday to questions submitted by Riverboat Development Authority board members.
The city responded to the RDA’s list of 35 questions that were submitted earlier this week with 10 pages of answers written by City Administrator Craig Malin. The RDA, which holds the license for the casino, is scheduled to meet Friday.
The city has proposed an operating agreement with the nonprofit Davenport Community Improvement Corporation, which would oversee casino operations. The agreement would increase the RDA’s share of the adjusted gross revenue from 4 to 4.5 percent once the casino goes land-based, then to
5 percent after 50 percent of the bond debt has been retired. The city plans to use general obligation bonds to buy the riverboat.
The letter not only responded to the questions but did some lobbying as well, in particular when asked about working with Rhythm City owner Isle of Capri if no “satisfactory” development proposals for a land-based casino are received.
“While anything is possible, ‘calling the deal off’ due to lack of ‘satisfactory’ proposals is highly unlikely, unnecessary and counter-productive,” Malin wrote. “The city is providing leadership in the shared interests of the Davenport community, RDA and (Iowa Racing and Gaming Commission).
“‘Calling off’ this exercise of leadership and reverting to the status quo of riverboats and minimum payments could only hurt the RDA,” the answer states. “If an RDA board member is satisfied with $2 million a year when they could have $3.8 million a year, they should vote no on the RDA/DCIC agreement.”
Asked whether the state gaming commission has expressed concerns about the city’s purchase of the casino, Malin wrote that the board hasn’t “expressed a definitive opinion as yet,” but that individual board members have expressed concerns over city control of the casino.
“The city shares this concern and has structured the DCIC to not be controlled by the city,” Malin wrote.
The city’s responses also note that the state gaming commission has indicated no preference as to whether a casino should be located downtown or along the city’s interstate corridor and that a study done for the city also showed relatively little advantage of one location over the other.
The city’s answers also rebutted any possible bias in favor of a downtown casino.
“There are, in concept, advantages and disadvantages of either an interstate or downtown location,” Malin wrote. “There are also nearly as many perspectives, in concept, on the topic as there are individuals willing to share their perspective.”
Malin noted that a number of questions regarding a development for a land-based casino are still to be determined because proposals aren’t due to the city until Dec. 20.