Gambling regulators return to Cedar Rapids as rival casino bids roll the dice

  • Photo

Last time the Iowa Racing and Gaming Commission came to town, it was quite a spectacle.

In April 2014, city leaders urged hundreds of people to show up and welcome the commission in a display of community support for the Cedar Crossing Casino project. Wear white shirts, they were told, as evidence backers are “the good guys.” There would be doughnuts, and free parking!

And more than 1,000 people did show up. After a bus tour of the proposed casino site and a pulse-pounding 3-D video of Cedar Crossing’s attributes, commissioners entered their scheduled meeting at the Convention Complex to cheers and chants. Then commissioners, who seemed a bit stunned by the rock star welcome, settled in to hear more than four hours of public testimony on the project.

Much of it came from local casino boosters. But a fair amount of that testimony came from owners and employees of existing casinos who pointed to market studies suggesting Cedar Crossing would make much of its revenue by grabbing business away from nearby facilities. Riverside Casino & Golf Resort showed a video featuring employees who described fears of job losses and home foreclosures.

Two weeks later, with cheers, chants and the thumpa-thumpa beat of that 3-D video still ringing in their ears, the commission turned Cedar Crossing down flat on a 4-1 vote. All four commissioners who witnessed that spectacle voted no. White shirts aside, the commission concluded Cedar Crossing would be bad news for existing members of the casino cartel.

The same commissioners are scheduled to return to Cedar Rapids on Tuesday. But nearly everything else will be considerably different.

Sure, there will be bus tours. But this time commissioners will see three casino sites. They’ll revisit the proposed site of the $169 million Cedar Crossing Casino along the Cedar River. But they’ll also see the site of the $106 million Cedar Crossing 2.0, a smaller gaming venue that would be attached to the U.S. Cellular Center and adjacent amenities.

Then there’s Wild Rose Cedar Rapids, a $42 million “boutique” casino that would be part of a multiuse development roughly across the street from the U.S. Cellular Center.

Unlike 2014, we don’t have the fateful market studies in hand. We won’t get them until October, with the commission making its final call in November.

Commissioners will meet to hear public testimony Tuesday afternoon. But the chance of cheers and chants is very, very low. Doughnuts? Nope. And this time, testimony promises to be a lot more complicated than local boosters vs. fearful outsiders.

Cedar Crossing backers will no doubt argue their dual proposals, featuring dining and entertainment amenities beyond gambling, are just the sort of projects 37,000 Linn County voters envisioned when they cast yes ballots for gambling in 2013. They’ll insist Wild Rose’s scaled-down “slots-in-a-box” boutique proposal is not what voters wanted, then or now.

That contention is underscored by the fact Cedar Crossing’s plans are backed by local elected officials, including the Cedar Rapids City Council and Linn County Board of Supervisors, as well as numerous community organizations.

“We’re here to create economic development,” Cedar Crossing investor Steve Gray told our editorial board recently, arguing the same isn’t true of Wild Rose.

“You won’t have economic development, you will have urban blight,” said Brent Stevens of Peninsula Pacific, the firm that would run Cedar Crossing and holds a majority stake among its current investors, panning the Wild Rose plan.

Wild Rose backers likely will counter that its bare-bones boutique plan is in direct response to revenue cannibalization fears that drove the commission to reject Cedar Crossing. In its license application, Wild Rose also insists its plan will help downtown restaurants and other amenities by not competing directly with them. Its mixed use facility will be built by local developers Steve Emerson and Hunter Parks.

“Our boutique casino doesn’t seek to compete with these existing urban amenities. To the contrary, we intend to enhance the experience of downtown guests and visitors …” Wild Rose said in its application.

Those local leaders who support Cedar Crossing may reprise their recent arguments that insider politics is tilting the process in favor of Wild Rose founder Gary Kirke. The politically connected owner of three Iowa casinos and a major Republican donor lent Gov. Kim Reynolds his private jet earlier this year. Meanwhile, consultants on his payroll also threw a fundraiser for the governor. Gaming commissioners are appointed by the governor.

The “fix is in,” critics insist.

“If we’re going to be dealt a hand of cards on our casino application, it can’t be perceived the other side has an ace up their sleeve,” said Linn County Supervisor Brent Oleson as he pushed for a board resolution questioning the fairness of the process. Oleson is the county’s representative on the nonprofit board that would hold Cedar Crossing’s license. “The citizens aren’t being dealt a fair hand.”

All this leaves key questions unanswered.

Can local leaders put the kibosh on slots in a box, or is the fix in?

Will we be shocked, shocked to find out there’s politics in this gambling establishment?

Will it take a boxy boutique to finally defeat the dreaded cannibals?

Will there be free parking?

Don’t bet your doughnuts the answers will come Tuesday.

Honestly, Cedar Crossing backers do make a strong case that Linn County voters, who knew quite a bit about the original Cedar Crossing proposal before they voted in 2013, wanted a meatier casino with additional entertainment amenities. Cedar Crossing’s community backing far exceeds Wild Rose’s local support. Community support is a licensing criteria.

But history shows the commission doesn’t care much about community support. You cheered and chanted. They shrugged. Cedar Crossing’s amenities, in their view, just made it a bigger cartel cannibal. The intent of voters? Swell. But only five votes really count.

History also shows the commission is mainly interested in the health and wealth of the existing cartel. So its biggest concern is how much a Cedar Rapids facility would affect existing casinos. We won’t know that until market studies arrive in October.

I still say the smart money is on a no-license scenario. Those studies will say, “saturated market,” and the commission likely will nod in agreement. No dice. But it’s what I see as the second-most-likely scenario that probably worries Cedar Crossing backers. And that’s a set of market studies that show a bare-bones boutique, pitched by the owner of three cartel casinos, would pull much less business from existing casinos.

But would the gaming commission really grant a license to a proposal so much different from what Linn County voters originally backed, with relatively modest community support and facing outright opposition from some local leaders? Would it really buck Iowa’s tradition of destination casinos to bet on an urban boutique? These might be good questions to ask the commission Tuesday.

But don’t expect answers, or a spectacle.

• Comments: (319) 398-8262; todd.dorman@thegazette.com

Like what you're reading?

We make it easy to stay connected:

to our email newsletters
Download our free apps

Give us feedback

Have you found an error or omission in our reporting? Tell us here.
Do you have a story idea we should look into? Tell us here.