JOHNSTON, Iowa — An update to the Iowa Racing and Gaming Commission on the sale of the Rhythm City casino was “an uneventful event” to Davenport Mayor Bill Gluba.
City officials traveled to this Des Moines suburb prepared to answer questions posed by commission members, but they got none after the update from Michael Fries, Isle of Capri vice president of legal affairs.
Fries told the commission the city is positioning itself for the $46 million sale and a marked up purchase agreement is expected to be received from the city soon.
“Some of it is premature for the commission to comment on,” commission chairman Jeff Lamberti said after the meeting. “Like we said during the meeting, that we have been kept apprised.
“Until you have a route of where you want to go — structure, location, financing — it is inappropriate for the commission to comment.”
A lack of questions is a good sign, Gluba said. He, along with aldermen Gene Meeker, Bill Boom and Jeff Justin and city administrator Craig Malin attended the meeting.
The city officials met with commission officials Wednesday and provided them information on the purchase, a legal opinion showing the city can own a casino and the request for development proposals, including the opportunity for both a downtown casino and one along the city’s interstate corridor.
“That is still wide open for discussion,” Gluba said. “At this point in time, I take this as ‘go ahead and proceed with the Isle of Capri and then come back when you are farther along.’ We had all those questions ready to be answered.”
The aldermen also took the commission’s silence as a positive, with Boom saying, “briefer is the best.”
“Open communication with the Racing and Gaming Commission is key,” Justin said. “We gave them a packet with what our attorneys have done and the (request for proposals).”
Lamberti said he raised the legality of a municipality owning a casino during a meeting with city officials but also wants to see how the Davenport Community Improvement Corporation, the body that will oversee casino operation, is structured.
“Will it be similar with Prairie Meadows or Dubuque or much more of a precedent?” the commission chairman asked.
The legal opinion, provided by Ivan Webber of the Des Moines law firm Ahlers and Cooney P.C., says the state’s home rule law as well as self-authorization to operate a business that has a public purpose allows for operating the casino.
A letter from the city of Davenport to the commission sets an ambitious timeframe for the Rhythm City purchase. It also points to two land-based casinos that Gluba said assumes the Isle of Capri would begin to move onto land in Bettendorf once it sheds the Rhythm City.
The letter states that by the commission’s January meeting, the city will have an agreement with Riverboat Development Authority, a development agreement finished and the casino’s purchase from the Isle of Capri nearly completed.
Mary Ellen Chamberlin, president of the Riverboat Development Authority, which holds the city’s casino license, said her board isn’t ready to vote on an agreement with the city. The authority’s board members still have questions about the city’s plans and want to see what type of development will take shape.
“We look for a positive transition of the casino,” she said. “We want to take a look at what type of development there is.
“Most of those questions have been answered, but we have a ways to go.”
Also, the city expects the nonprofit Davenport Community Improvement Corporation to be incorporated and board members submitted for background checks.
“I can assure you Davenport takes the issue of maximizing the value of the gaming license for the state, RDA and local community seriously, and that we hold all our endeavors to the highest standards,” states the letter signed by Gluba.