'Boutique' casino pitched for downtown Cedar Rapids
Local developers and gaming veterans team up for new proposal
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CEDAR RAPIDS — Local developers are partnering with gaming industry veterans on a $40 million “boutique” casino in downtown Cedar Rapids.
This is an entirely different cast, different location and different concept from a proposed $174 million casino, which had its gaming license request denied by state officials in 2014. Behind this plan are developers Steve Emerson and Hunter Parks and executives from Wild Rose casinos.
“I am not guaranteeing what the Iowa Racing and Commission will do — you’ll never hear me say that — but I think this project has merits in that it is scaled down from what was being proposed before,” said Tom Timmons, president and chief operations officer of Wild Rose Entertainment, which has casinos in Clinton, Emmetsburg and Jefferson. “We listened to what the commission said last time and we want to have something that makes sense and fits and works to make this successful.”
The casino would be built on First Avenue E, across from the Double Tree Hotel and Convention Center, in a four-story building with a skywalk to the hotel. Emerson already owns the land. Initial concepts have the structure on two adjacent lots along the railroad tracks, but the impact on the adjacent Skogman Building and Downtown Tire isn’t yet known.
A 25,000 square foot gaming floor is slated for the second level with a connection to the skywalk. The third and fourth floor would have office space, and parking would go on ground level.
The gaming floor would have 600 to 700 slot machines, 15 to 20 table games, and would employ 200 to 225 people. A rough estimate, based on industry standards, projects $42 million in annual revenue, Timmons said, adding other Wild Rose casinos contribute 4.5 to 6 percent of annual revenues to a local non-profit board, above the state mandated 3 percent.
The project is about two-thirds the size of Cedar Crossing, which was planned on the west side Cedar River on vacant grounds. That project, which was to have a hotel and several eateries, was expected to have 840 slot machines and 30 table games, generate about $80 million annually, and employ 470 people.
While the newly-proposed casino would likely have limited food and drink options, it was designed to have few services, so as to not compete with other downtown businesses.
“The casino I think could be a really great asset to the hotel and existing business and restaurants and bars in walking distance,” Parks said. “We think this will have a great impact on not just the hotel but arena. Wild Rose could very well bring nice events to the arena, musical events.”
Connectivity is important, he said, noting a skywalk would allow people to get from the hotel to the casino in winter.
The Wild Rose group has hired Wells Gaming Research of Reno, Nev. to conduct an economic study. Sometime after that study is complete in six to eight weeks, the group will hold public forums to get feedback on the project. Timmons said he hopes to have a license application ready by the end of the year, but it could come sooner.
The project has several hurdles though, not the least of which his getting a gaming license.
Cedar Rapids Mayor Ron Corbett as recently as last month said he wanted to hold out and take another run at Cedar Crossing. On Thursday, Corbett noted the city still is obligated under a memorandum of understanding or exclusivity agreement with the Cedar Crossing investors, Cedar Rapids Development Group.
He said while he sees several positive attributes of the boutique casino, the project would need some agreement with the previous investors.
“We have supported a casino and the community has been supportive, but we do have an MOU that we have to walk through,” Corbett said. “I think what needs to happen is the two groups need to get together. If they do and we have a united front, it enhances our chances.”
Corbett said the smaller casino could still accomplish three goals: entertainment options, redevelopment of downtown and adding potential customers for the city-owned DoubleTree. Corbett said most likely — although not a certainty — if the boutique project goes through, it would end plans for Cedar Crossing. It would also allow the city to entertain other options for the vacant land reserved for the casino.
A referendum allowing the gaming in Linn County will expire in 2021, requiring another vote to allow gaming here.
Brent Oleson, a Linn County Supervisor and member of the non-profit Linn County Gaming Association, which applied for the Cedar Crossing license, said he is keeping an open mind. He noted the new investors would likely want to work through his association to get a license, but they could also form a new non-profit to request the license.
“I’m not sure I’m ready to belly up to the table and throw another set of dice yet, but I’m not not interested either,” he said.
Emerson said he plans to reach out to previous investors to inquire about their interest on this project.
“Until we better understand the project and have discussions with our board of directors, community business leaders who have invested millions of dollars, the City of Cedar Rapids, Linn County and our non-profit partner the Linn County Gaming Association, we have no comment,” said Steve Gray, Chairman of the Cedar Rapids Development Group.
Jeff Lamberti, chairman of the Iowa Racing and Gaming Commission, said the commission fully studies all license requests, and it’s hard to say whether the market conditions that was part of derailing the last request will hold true with this project.
“It’s safe to say a smaller facility is likely to have less impact on other facilities, but we won’t know what the numbers will be until we conduct a financial study,” he said.
Jeff Link, a spokesperson for Elite Casinos, which includes Rhythm City Casino in Davenport, Riverside Casino & Golf Resort in Riverside, and Grand Falls Casino & Golf Resort in Larchwood, said his group was just learning about the project and did not yet have a comment. Dan Kehl, the chief executive of Elite, lobbied heavily against Cedar Crossing saying it would cannibalize other casinos, particularly Riverside.