The Riverboat Development Authority will vote Monday on an operating agreement with Dan Kehl's Scott County Casino LLC, moving a step closer to leaving a second, last-minute and possibly more lucrative proposal for the city of Davenport on the sidelines.
An agreement with the RDA, along with completing the purchase of the Rhythm City Casino, would be a blow to a proposal by Toronto-based Clairvest Group Inc. and Davenport Casino Group.
Kehl says the Rhythm City purchase will be done by the Oct. 15 deadline set in an option agreement.
Clairvest and Quad-City developer Rodney Blackwell submitted the proposal to the city Saturday. They have pledged to build a casino, a 360-room hotel and spend $250 million over 10 years on a development at the southwest corner of the interstates 74 and 80 intersection.
Kehl, who was selected by the RDA in May, proposes a $110 million hotel and casino in Davenport and has said he wants further development to make it a destination. He has not said how much that development would cost and has not announced a location for the project.
RDA Chairman Gary Mohr declined to provide a copy of the agreement between the RDA and Scott County Casino or provide any details of it, saying that it was still being polished. He said the RDA is following its contractual obligations.
The RDA verbally awarded Kehl 120 days to complete the purchase of the Rhythm City, with an extension until Oct. 15 executed by Kehl, Mohr explained. The Isle of Capri, which owns the Davenport casino, entered into an exclusive arrangement that does not allow either side to talk to outside parties.
"The Isle, even if they wanted to, wouldn’t be able to give us permission to talk to these guys from Canada because they have an exclusive arrangement with Kehl," Mohr said of Clairvest. "The RDA will keep its commitments. I don’t know if people don’t understand it or they just don’t like it."
That has disappointed officials at City Hall who think a clause in the option agreement between Kehl's group and the Isle gives them a chance to vote down the Kehl project to consider Clairvest.
"Why would we do that when we chose Kehl?" Mohr said. "I guess what surprises me the most is the misunderstanding that we can throw away the agreements and talk to someone new. We can’t do that and we’re not going to do that."
The Davenport City Council had been prepared to vote Wednesday on a non-exclusive development agreement with Kehl's group, but aldermen tabled it until they get more information from Clairvest.
Kehl, who attended Wednesday's council meeting, reiterated that he plans to complete the purchase of the Rhythm City. The process leaves the city on the outside looking in. The casino operating license is held by the Isle of Capri and the gambling license is held by the RDA, Iowa Racing and Gaming Commission administrator Brian Ohorilko explained.
"From the commission’s perspective, you have the two license-holders, and they are the indispensable parties," he said. "If Isle has agreed to sell the assets to Kehl, he would need to have that deal from the Isle and come forward with some agreement from the RDA.
"It would be hard to look at any other request unless the two license-holders have agreed on any deal," he added.
The racing and gaming commission would have to approve the agreement between Kehl and RDA.
But Davenport continues to move forward with Clairvest. The city received a draft development agreement and financial projections from Clairvest late Thursday afternoon. City Administrator Craig Malin said he expects to have a memo with a recommendation and a development agreement with Clairvest for the council to consider Wednesday.
The development agreement with Kehl also returns to Wednesday's council agenda.