Investor group officially asks to purchase city land for Cedar Rapids casino

The casino investor group led by Steve Gray formally asked via letter to City Hall to purchase to 7.5 acres of city-owned land directly across the Cedar River from downtown for an $80-million-plus gaming casino.

"This officially is kicking off that (land purchase) process and getting done what needs to be done," Gray, founder of Gray Venture Partners and one of 60 or so in investor group Cedar Rapids Development Group, said Thursday afternoon.

Mayor Ron Corbett on Thursday said the City Council on Tuesday will begin the city's property disposition process for the land being sought by the casino investor group.

The process, which the city has used routinely to sell property acquired through the flood-recovery buyout program, requires the city to seek proposals from individuals or entities that may want to purchase a particular piece of property. A City Hall evaluation team then evaluates the proposals and recommends the best one to the City Council. The city manager then enters into negotiations with the entity selected by the council to hammer out a development agreement as part of the property sale, an agreement which the council must approve.

In his letter to City Hall on Thursday, Gray said the investor group needs to secure land for the casino site before it can complete its application to the Iowa Racing and Gaming Commission for a license to operate a casino. The investor group hoped to submit that application within the next several months, he said.

Gray said the site sought for the casino is the area that the investor group made public before the March 5 referendum in which Linn County voters overwhelming approved casino gaming in the county.

The proposed three-story casino will sit on property between First and Second avenues SW and First and Third streets SW, while a parking ramp is proposed to be built across First Avenue West from the casino site with a skywalk connecting the ramp and casino, Gray has said.

In his letter to City Hall on Thursday, Gray said:

• The investor group is asking the city to make the 7.5 acres of city property available for purchase to allow for the construction of a casino should the investor group acquire a state gaming license.
• If the license is secured, the investor group would invest more than $80 million in the casino, hire more than 350 employees at a "competitive wage rate and build a casino with a building plan that includes flood protection for the site.
• In addition, the investor group will guarantee the use of a certain number of room at the city-owned DoubleTree by Hilton at the U.S. Cellular Center.
• The investor group also will "work with" city officials in a possible public-private partnership to construct the casino parking ramp in such a way that it can be available for non-casino public use, for instance, by those attending events at the city's new riverfront amphitheater down the street from the casino.

Gray on Thursday said the estimated purchase price for the 7.5 acres of city-owned land will be about $2 million. The casino group has signed purchase contracts on another 1 acre of property owned by private owners on the proposed casino site, he said.

Earlier this month, Gray said he hoped to have his casino application into the Iowa Racing & Gaming Commission by July. He thought it would take the commission six to 12 months to make a decision and another 12 to 14 months to build the casino should the commission grant a license.