Cedar Rapids casino proposals draw questions about parking

One of the biggest challenges facing an urban casino in Cedar Rapids - aside from getting a gambling license itself - could be parking, according to data released through a records request by the Iowa Racing and Gaming Commission.

The urban casino model creates many positive opportunities and a few problematic challenges different from existing licensed casinos in Iowa, Richard Gilson, corporate internal auditor and would-be general manager of Wild Rose Cedar Rapids, stated in a July 10 response to questions from gambling commission staff. Most Iowa casinos are located in rural or suburban areas, outside dense business districts.

'We view parking as problematic,” Gilson said. 'Our normal solution is to buy additional acreage and build a bigger parking lot and that is not an option in downtown Cedar Rapids.”

Gambling commission staff sought clarification on a variety of aspects of the Cedar Rapids gambling license applications submitted in February by Wild Rose and Peninsula Pacific Partnership. Parking was a topic of interest for all three applications.

Peninsula Pacific Partnership is behind two applications: Cedar Crossing Central in a skydeck attached to the DoubleTree Hotel, U.S. Cellular Center and a new Five Seasons Parking Ramp along First Avenue E, and Cedar Crossing on the River, located at First Avenue and First Street SW.

The commission plans to decide in November whether to grant a license to an applicant or none at all.

Wild Rose Cedar Rapids proposed its 'boutique” casino in a new four-story building in place of a parking lot on First Avenue SE across from the DoubleTree Hotel. Valet parking in a 122-space lot under the casino floor would be available on a first-come first-served basis for 'premium level club members,” Gilson said. Additionally, the group will 'contemplate the validation of parking” for card members with minimum play and maximum time parameters.

The Five Seasons Parking Ramp with 789 spaces and the Convention Center Parking Ramp with 500 spaces are each approximately 100 feet away, and 100 additional parking spots are in the near vicinity via metered street spaces, according to the documents.

'Our initial debate and discussion on providing free parking, really illustrated some of the difficulties of the site and being in a downtown area,” Gilson stated. 'Should a license be granted and we provide any free parking, it will be very difficult to monitor and determine if the vehicle contains a casino patron versus a downtown employee or visitor.”

Commission staff also questioned the parking plan for the Cedar Crossing proposals, including how much the city of Cedar Rapids would pay.

Cedar Crossing would need up to 500 spaces in a $25 million parking ramp that would replace the Five Seasons Ramp, or up to 1,000 spaces in a $27.1 million ramp for the river location.

In either case, Cedar Rapids would assist in the upfront financing of the parking ramp, which would be repaid through some form of tax increment financing, according to the documents and interviews.

Casino customers would have free parking, but a new ramp, in either case, would be shared use with the general public.

Non-casino customers parking in the downtown ramp would pay the standard city fees. Parking at the river location would be free to the public, with the exception of 352 spaces reserved for permit parking Monday through Friday.

Other notable responses in the documents:

- The Cedar Crossing proposals, which had been driven by a local team of investors organized as Cedar Rapids Development Group, are now steered by Peninsula Pacific Partnership, which is a Los Angeles-based casino operator.

Peninsula has 80 percent or 1.72 million shares, making it the largest investor in Cedar Crossing. The next largest shareholders are Gray Venture Partners, which is lead by Steve Gray, and DJS Family LLC, which is lead by Drew Skogman. They have been the leaders of the Cedar Rapids Development Group, and each have 1.25 percent or 26,875 shares. The only other shareholders with a greater than 1 percent stake are David L. Rusch and Hillcrest Holdings, which is lead by John and Dyan Smith. They each have 22,844 shares or 1.063 percent.

Revealed in the documents are the 63 total shareholders behind Cedar Crossing.

- Wild Rose denies a 'rumor” it intends to swap its 'boutique” casino with something much larger if a license is granted.

'At our location, we have proposed a very modest sized casino facility,” Gilson stated. 'We are aware that a rumor exists that we intend to perform a ‘bait and switch' scheme and once the license has been approved, unveil a new design that is considerably larger; that is not our intention or plan.”

The site is constrained by a railroad and the historic Skogman building, and the team would accept as a license condition a cap on the number of slot machines and table games as long as it was near what was proposed, Gilson stated.

- Wild Rose Cedar Rapids, if a license is granted, would be open to gambling no later than the end of the first quarter 2019, which is before April 1. Each Cedar Crossing proposal would take approximately 25 months to open from the start date, which is predicted to be shortly after the November commission meeting.

- Wild Rose's concept includes a skywalk connection to the Convention Center Parking Ramp, which in turn connects to the DoubleTree Hotel, as an asset for patrons. Gilson stated while developers are 'confident that adequate approvals exists” they agree 'that a certain level of skepticism exists” about whether plans for a skywalk will come to fruition. People can use the street level entrance, if it does not, he said.

- New financial projections suggest costs for each project could be much higher than previously reported.

Wild Rose expects an investment approaching $30 million, while developers estimate costs to be $25 million. That amount - $55 million - is more than the $40 million project previously announced.

Details for Cedar Crossing on the River, which had been billed at $169 million, show a total budget of $187.3 million. Cedar Crossing Central, which had a $106 million budget, now has a $117.7 million budget.

- Wild Rose Cedar Rapids would include a show lounge area with a 200-square-foot stage and seating for 358 people in the gambling floor to host musical acts, comedians, guest speakers and other events.

'The stage in Cedar Rapids will be able to accommodate a three-piece garage band or possibly a four-piece band but nothing larger,” according to a footnote in the Wild Rose letter. 'We do not envision being able to book any national touring musical acts at our proposed casino facility in Cedar Rapids.”

l Comments: (319) 339-3177; brian.morelli@thegazette.com