City plans to extend exclusivity pact with casino investors

CEDAR RAPIDS - City officials haven't given up on the Cedar Crossing Casino.

The City Council on Tuesday is slated to add two years to its five-year memorandum of understanding with casino investors and the non-profit aligned with them, the Linn County Gaming Association Inc.

The memorandum, which now will run through Oct. 9, 2019, states that the council will work exclusively with the casino investment group Cedar Rapids Development Group LLC, led by Cedar Rapids businessman Steve Gray, and the non-profit association to bring a casino to the city.

'We want to show the local investor group that we're in this for the long haul,” Mayor Ron Corbett said Monday.

The council first approved the exclusivity provision in October 2012 to acknowledge that the Gray-led group would be making a significant investment to win Linn County voter approval, design a casino and try to obtain a state license.

In April, the Iowa Racing and Gaming Commission voted 4-1 against a casino license for the investors' Cedar Crossing Casino in Cedar Rapids, saying it would take too much business from existing casinos, especially the Riverside Casino and Golf Resort south of Iowa City.

On Monday, Corbett said he, city officials and area legislators intend to work to pass state gaming reform legislation in the upcoming session of the Iowa Legislature. The reform would permit the state's first smoke-free casino in Cedar Rapids.

This summer, the commission said it did not want to see any new casino applications for the next three years.

'Three years from now, there may be new faces and a different attitude on the commission,” Corbett said. 'In the meantime, we have this opportunity in front of the Legislature this January for a smoke-free casino. As I've been out and about this summer and fall, I've had a lot of people push me on the non-smoking casino idea.”

Gray said the casino investor group had sought to extend its exclusivity arrangement with city as part of negotiations in which the City Council has offered to buy two properties at the proposed casino site at First Avenue West and First Street SW from the casino investor group.

Much of the land at the casino site is owned by the city, which obtained it via the city's flood recovery buyout program. However, the casino investors bought two privately held parcels for $2.05 million so it could show the Iowa Racing and Gaming Commission they and the city had control of the entire casino site and that building could begin immediately if the project secured a state license.

The City Council now has offered to buy the two parcels for $415,000, which Corbett has said will let the city control the entire casino site.

Gray on Monday put it this way: 'Simply stated, we have a lot of money invested in these properties, believe they are best owned by the city, and one of our requests was to extend the exclusivity. The city has agreed.”