CEDAR RAPIDS — A prominent figure in Iowa business and political circles warned local officials of claims “the fix is in” for a gambling license in Linn County, according to a letter obtained by The Gazette.
John M. Smith, chairman of Cedar Rapids-based CRST International and a top investor in the Cedar Crossing casino, suggested in a letter to local leaders the “inferior” Wild Rose Cedar Rapids casino may have an inside track on a gambling license.
“We are hearing from those representing the competing ‘slots in a box’ proposal that the fix is in — they already have the votes,” Smith said, clarifying that “I do not believe that for one second. I believe in the honor and integrity of those who serve on the (Iowa Racing and Gaming Commission) to make the right choice.”
Smith made the statement in an Aug. 31 letter to members of the Linn County Board of Supervisors and Cedar Rapids City Council urging them to lobby the Iowa Racing and Gaming Commission in favor of Cedar Crossing. Smith did not identify the source of those claims and did not return messages seeking clarification.
The five-member, governor-appointed commission is weighing three applications — two from Cedar Crossing and one from Wild Rose — for a gambling license for a downtown Cedar Rapids casino. A decision is expected in November.
Jamie Buelt, a Wild Rose spokeswoman, denied the assertion Thursday.
“Nobody has talked with John Smith, and nobody has made those comments,” Buelt said. “I don’t know where they got that. Nobody knows what the votes are. We are working really hard. If that were true, we wouldn’t be working so hard.”
It is not clear how many people received Smith’s letter, which is drafted as a call to action to attend a Sept. 26 public hearing before the commission at the DoubleTree by Hilton Hotel in downtown Cedar Rapids.
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“We cannot afford to let this opportunity pass us by, and we need your help to ensure that we are not outmaneuvered by an inferior competitor,” Smith wrote.
Jeff Lamberti, a commission member, also denied the decision is a done deal, saying they haven’t seen the results of internal market studies, which are expected to be finalized next month.
“The single most important factor in our decision is our studies,” Lamberti said. “No one on the commission has made up their minds.”
Lamberti also criticized accusations the commission will make its decision based on politics as “wrong and frankly pretty offensive.”
“When the Cedar Crossing proposal came up before, people on that side were saying they already had the votes to be successful,” Lamberti said. “It is all rumors and innuendo.”
The commission rejected Cedar Crossing in 2014 by a 4-1 vote.
Linn County Supervisor Brent Oleson cited Smith’s letter in introducing a resolution of support for Cedar Crossing and opposing Wild Rose during a Wednesday meeting. Oleson, who said he drafted the resolution before seeing the letter, echoed the sentiment, saying Wild Rose has an “ace up their sleeve” and “it doesn’t smell right.”
Oleson said he proposed the resolution so people in the community are aware of what insiders have been hearing for some time. Oleson also is a member of the Linn County Gaming Association, which was assembled to be the license holder for Cedar Crossing.
“Regular Linn County citizens should know what is being said,” Oleson said. “They shouldn’t be left in the dark.”
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The Wild Rose group, when first introducing its plans to The Gazette in September 2016, said it had spoken directly with commission members before unveiling its plan and receiving positive feedback, but no assurances.
“Based on some of our initial conversations with racing and gaming members, I’m not going to suggest they’ve said ‘yes, we are going to support this,’ but I am going to tell you they are extremely open to this concept. They are intrigued by this concept,” Jeff Boeyink, a partner in LS2, a firm hired to help get the license for Wild Rose, told The Gazette last year.
Critics have pointed to close ties between Wild Rose and the governor’s office to suggest an inside deal. Lamberti said the governor’s office has never urged members to vote a certain way.
Boeyink served as chief of staff to former Iowa Gov. Terry Branstad when he appointed the current gaming commissioners.
This spring, Gary Kirke, chairman of Wild Rose, lent Iowa Gov. Kim Reynolds his private jet to barnstorm the state when she took office. Later, Kirke, Boeyink and two others with ties to Wild Rose hosted a private fundraiser for Reynolds’ re-election campaign.
Linn County Supervisor John Harris, the only Republican on the board, opposed the resolution and said he doesn’t believe the accusations about Wild Rose.
“I do not believe it,” Harris said. “This whole thing just kind of confuses me, the harshness of it. The innuendo about the governor and that the decision has pretty much already been made, I just can’t step up for that.”
Wild Rose is a $40 million casino proposed across from the DoubleTree Hotel on First Avenue SE. The $165 million Cedar Crossing by the River is proposed along First Street SW and First Avenue West. The $105 million Cedar Crossing Central would go in a skydeck over the Fourth Street NE rail corridor and attach to the DoubleTree Hotel. Both of the Cedar Crossing casinos are proposed by the Peninsula Pacific Partnership, of Los Angeles and the Cedar Rapids Development Group.
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