116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS - Developers behind a proposed $40 million downtown 'boutique” casino say they are creating a fund to partially reimburse an original group of investors who spearheaded a successful and costly referendum to allow gaming in Linn County, but ultimately watched the Iowa Racing and Gaming Commission rebuff the bid for a casino license in 2014.
Steve Emerson of Aspect Architecture and Hunter Parks of Hunter Companies - both Cedar-Rapids based companies - announced the $1.5 million Investor Compensation Initiative to help offset losses of the Cedar Rapids Development Group, which led the gaming effort earlier this decade.
'We are dedicated to contributing to the Cedar Rapids community in a positive way,” Emerson, president of Aspect, said in a statement. 'This gesture is one way to help local investors, and to invigorate enthusiasm for a downtown casino. Driving growth in Cedar Rapids with this new concept is our top priority, and we look forward to continuing our efforts.”
Steve Gray, chairman of the Cedar Rapids Development Group, said the group has nearly 100 investors who put up close to $10 million.
The compensation fund is being supported by Wild Rose Entertainment, which is the gaming operation involved in the plan to build the downtown casino. Wild Rose, Emerson and Parks announced the project last month.
The casino would be built on First Avenue E, across from the DoubleTree Hotel and Convention Center, in a four-story building with a skywalk leading to the hotel. Emerson already owns the land. Initial concepts have the structure on two adjacent lots along the railroad tracks.
A 25,000-square-foot gaming floor is slated for the second level. The third and fourth floor would have office space, and parking would go on the ground level.
The gaming floor would have 600 to 700 slot machines, 15 to 20 table games and employ 200 to 225 people. Officials estimate the project would pump $7 million annually into the economy.
A rough estimate, based on industry standards, projects $42 million in annual revenue, said Tom Timmons, president and chief operations officer of Wild Rose Entertainment, which has casinos in Clinton, Emmetsburg and Jefferson. He said other Wild Rose casinos contribute 4.5 to 6 percent of annual revenues to a local non-profit board, above the state mandated 3 percent.
The Wild Rose project is a scaled-down casino and features an entirely different cast compared with the effort that came up short in 2014. That $174 million Cedar Crossing was planned on the west side of the Cedar River on vacant land and would have included a hotel and eateries.
The compensation initiative would cover more than half the costs of the referendum, according to the news release from Emerson and Parks. The original investors would be eligible to recoup up to half their original investment up to a maximum of $50,000 per investor.
Investors would have to prove residency in Linn County, support the proposed boutique casino and meet other terms. The deal also would be contingent upon a gaming license for the Wild Rose Cedar Rapids.
'We are pleased they are beginning to recognize our time, efforts and investment,” Gray said. 'However, their offer represents pennies on the dollar to our investors and only partially recognizes the collective efforts and commitments by the city of Cedar Rapids, Linn County, Linn County Gaming Association and numerous other community organizations. At this point, we continue to work on another path forward that would be more beneficial to our exclusive partners and provide a much greater return to our investors.”
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