Cedar Rapids City Council votes to temporarily set aside land for potential casino

CEDAR RAPIDS — Land in the northwest quadrant near downtown will be earmarked for a potential casino for the next few years, should state regulators eventually award a license to operate a gaming facility in Linn County.

Cedar Rapids casino backers got the go-ahead Tuesday from the Cedar Rapids City Council on an option-to-purchase agreement for a swathe of land in the urban core. Peninsula Pacific Entertainment, the city’s preferred casino operator, is pursuing plans first shared last year to build a $250 million, 160,000 square-foot gaming and entertainment complex at the site.

The city’s deal with the Cedar Rapids Development Group sets aside city-owned property between F and I Avenue NW and First and Fifth Streets NW to be purchased and redeveloped into the Cedar Crossing casino.

“We are pleased that the Cedar Rapids City Council has taken the next step to make Cedar Crossing a reality,” Jonathan Swain, president of Peninsula Pacific Entertainment, said in a statement. “Cedar Crossing will be the best casino construction project that Iowa has ever seen, and it will allow us to live out our mission of service, quality and community through charitable giving among Linn County nonprofits and funding to the City of Cedar Rapids.”

The agreement spans through Dec. 31, 2025. The developer will pay $165,000 for the option to purchase the property.

If the Iowa Racing and Gaming Commission is actively considering an application to operate a casino, the developer may extend the option to Dec. 31, 2026, and pay the city another $55,000.

The city-owned property would be sold at its fair market value as determined by an appraiser. The developer also has made offers to buy private properties near the site.

State lawmakers last year enacted a two-year moratorium blocking new casino licenses until June 2024, dashing casino backers’ hopes for a gaming facility at the site of now-demolished Cooper’s Mill.

The Cedar Rapids Development Group, an entity of mostly local investors, and Linn County Gaming Association, the nonprofit that would allocate a 8 percent of revenue annually to local nonprofits, plan to jointly apply for a gaming license with the Iowa Racing and Gaming Commission after the state moratorium on new licenses ends in June 2024. They have a deal guaranteeing the city’s support in the license application process through October 2029.

Anne Parmley, board president of the gaming association, touted these contributions to nonprofits — an estimated $5 million to $7 million a year — in remarks to the council.

“ (Nonprofits are) being forced to do more with less and the demand for their services is only growing exponentially,” Parmley said. “ … Those dollars will be a game changer in our community.”

Gaming interests and Mike Sadler, president of the Cedar Rapids and Iowa City Building Trades, spoke favorably of the project, but some community members spoke in opposition to a casino in Cedar Rapids — fearing the negative social consequences casinos bring such as increased crime and divorce rates.

“You can have all the nonprofits trying to patch up broken hearts and wounded lives, but it's not going to stop the carnage,” said Randy Walker, who lives on the north side of Cedar Rapids. “I don't want to be identified as a city that stole money out of the marginalized and those that are struggling to make a living thinking they're going to get the pie in the sky” earnings from gambling.

Council member Tyler Olson recused himself because of a financial conflict. Council member Scott Olson was absent.

The seven voting council members passed the agreement 6-1, with Ashley Vanorny opposed.

Council member Dale Todd said the vote wasn’t about being for or against gaming.

“It’s developing a land assembly strategy and a strategic plan,” Todd said. “I don’t feel any real compelling need for that land over there. No one is coming at us for an alternative, so I simply look at it as a land bank.”

Council member Scott Overland agreed with that outlook and said the city opted to do something similar with holding land on the corner of First Street and First Avenue W for a potential casino, until it became what is now known as the $81.5 million mixed-use First and First West development featuring a Big Grove Brewery, housing, hotel rooms and other uses.

“It’s up to the Racing and Gaming Commission,” Overland said. “It’s a highly political situation and I wouldn’t be betting my lunch tomorrow that a license comes around any time soon.”

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