Council approves casino deal

The twists and turns, occasional bruised feelings and harsh words appear to be over with the Davenport City Council's 10-0 vote Tuesday night approving a land-based casino development agreement.

The development agreement between the city and Scott County Casino LLC was the last step on a long path toward a completed sale option agreement for the Rhythm City and a planned $110 million casino and hotel project.

"It wasn't always pretty, but we stuck together to get this done," Alderman Jason Gordon, at large, said.

Added Alderwoman Sheilia Burrage: "We have deserved a land-based casino for many, many years. City Council 2013 got it done."

Earlier in the day, Scott County Casino LLC CEO Dan Kehl said the sale option agreement awaiting the council action likely would be executed Monday. He met with Mayor Bill Gluba on Monday and together announced a $1 million donation over five years to Davenport homeless shelters and meal kitchen.

"I want to thank the mayor for his leadership on this issue," Kehl said. "It has been a long process.

"He is a very persuasive mayor and this community should be proud of his leadership."

The Isle of Capri, owner of the Rhythm City, also commented on the council's approval of the development agreement.

"Our dedicated and hard-working Rhythm City employees have been dealing with uncertainly for a long time," Isle spokeswoman Jill Alexander said. "We look forward to Mr. Kehl exercising his option and completing the sale."

The vote was part of a 22-minute meeting moved up a day because of the Thanksgiving holiday.

"It seemed kind of anticlimactic," Alderman Gene Meeker, at large, said. "All of these years and twists and turns and agreements and disagreements, and then finally it was done."

Riverboat Development Authority president Mary Ellen Chamberlin congratulated the city council on its agreement.

"I know this has been a real tough struggle," she said, "but we're all getting the job done."

Scott County Casino's operating agreement with the RDA board and the sale option agreement with the Isle of Capri will be presented to the Iowa Racing and Gaming Commission in January. Chamberlin said she hopes it will be voted on at that time, rather than taken under advisement.

Kehl said closing on the $51 million Rhythm City purchase would be early next year, followed by financing of the casino project, including recruiting local investors. Construction is expected to begin next fall with a 12-month construction schedule.

The city council's action was good news for Iowa Racing and Gaming Commission chairman Jeff Lamberti, who had been urging all the sides to talk following a stalemate over a development agreement.

"This has been a long, and sometimes difficult, process but I am excited about the possibilities," Lamberti said. "A new land-based facility will be good for the city of Davenport and for the people of the state of Iowa."

The effort to get a land-based casino is years in the making. It picked up momentum in the last year when the city announced it would try to buy the Rhythm City and develop a land-based casino, only to be met with opposition from the local business community.

Earlier this year, the Riverboat Development Authority, which holds the gambling boat's operating license, announced it would take up the effort to find a new operator and delivered Kehl in May.

Local developer Rodney Blackwell, spurned by the RDA when it chose Kehl, found an equity firm to fund a casino, submitting a proposal just days before the city council was to consider a development agreement with Scott County Casino in September. As that was considered by the city, the RDA approved an operating agreement with Kehl's company that negated the financial terms in the city's deal.

The deal approved by the RDA in September and by the city council Tuesday would give the city 1.75 percent of the adjusted net revenue of the casino as well as an additional 0.4 percent for eight years starting on the fourth anniversary of the land-based casino's opening. It also closed a gap where the city wouldn't receive any gaming until the funding in the RDA's operating agreement started.

"It lets the public know, lets the gaming commission know, lets Mr. Kehl know we've done our job and this can move on," said Gluba, who has long favored the city-owned casino model.

Reported by:  Quad-City Times