Evolving Plans for Cedar Rapids Casino Call for Bigger, More Costly Venue
By Rick Smith, Reporter
CEDAR RAPIDS, Iowa - Evolving plans for the proposed Cedar Rapids casino now call for a $100-million facility, not an $85-million one, and a venue that could be up to 150,000 square feet in size or up to 30,000 square feet larger than originally envisioned.
In addition, the design refinements for the proposed casino now call for parking on the building's first floor so that the casino's two gaming floors above will sit well above the level of the water in the June 2008 flood, Steve Gray, who heads up casino investor group Cedar Rapids Development Group LLC, said on Friday.
The design now also calls for the casino itself to take up most of the ground between First and Second avenues SW and First and Third streets SW and envisions a casino parking ramp to be built across First Avenue West from the casino. A skywalk then would reach from the ramp across First Avenue West to the casino, said Gray, founder of Gray Venture Partners.
The new casino plan calls for two upscale restaurants, two other eating venues, a sports bar, a nightclub and a special event room for weddings and parties. The larger casino may not have more than the 1,000 slot machines and 25 gaming tables that were previoulsy planned, but may, for instance, have a larger poker room and "upper-end" gaming room.
"This is a newer, bigger, better plan," Gray said on the one-month anniversary of the March 5 referendum in which voters overwhelmingly approved casino gaming for Linn County.
"When almost 62 percent of the people tell you that they want it, and in our polling we hear loud and clear why they want it creating good jobs, economic activity, something fun and lively to go to we want to give those people what they are asking for," he said.
Gray said the investor group that numbers about 60 investors expects to approach City Hall in the next week to 10 days with a formal request to purchase city-owned land for the casino. The request will prompt the city to seek proposals for the land, which the city has acquired through the city's flood-recovery buyout program.
Gray said his investor group will pay at least the fair market value for the city-owned property, the value of which he estimated to be about $2 million. The money reverts to the federal government by rule because federal funds were used to buy out the property. Gray's group has signed purchase contracts with two owners of private property on the casino footprint.
Gray said the investor group currently is meeting with four potential casino operators, all of which he said are well-known casino management companies and at least some are companies currently managing other casinos in Iowa. He hoped to name the operating partner in 30 days.
Dan Kehl, who is the president/CEO of the Riverside Casino & Golf Resort south of Iowa City and who unsuccessfully helped to fund the campaign to defeat the Linn County casino measure, is not one of the four potential operators, Gray said.
Gray and Kehl became the competing personalities and faces of the $2-million-plus advertising war that led up to the March 5 casino vote.
Gray said he had no hard feelings toward Kehl, who he said was defending his casino business in Riverside. As for himself, Gray said he's glad to watch TV again without having to see his face on anti-casino TV ads.
Gray said the casino investor group hoped to have its application for a state gaming license in front of the Iowa Racing & Gaming Commission in July. He estimated that the commission would take six months to a year to make a decision, a decision that would not come before the commission hired a consultant or consultants to analyze the state's casino industry, he said.
Among the criteria that the commission must consider in granting a license is if a new casino brings in additional gaming revenue to the state without significantly harming business at existing casinos.
Gray said Cedar Rapids' new convention center and amphitheater, with renovated hotel and arena, will be bringing more people to downtown Cedar Rapids and so a new stream of casino revenue to the state.
Gray said he will begin attending the commission's monthly meetings this month to better try to understand how the commission makes its decisions.
The investor group also will be finalizing its financing plans in the weeks ahead and may add additional investors. The casino operator likely will invest in the casino, but the local investors will hold the majority of the investment, Gray said.
The group hopes to raise $30 million to $35 million from investors and borrow another $75 million to $80 million from lenders. The group must pay $20 million for a state gaming license in addition to the $100-million cost to build the casino.
The first-floor parking under the casino will provide about 240 parking spots with the possible ramp across First Avenue West another 600 to 900 parking spaces. The investor group might also try to buy additional city-owned lots for parking, too, Gray said.
He envisioned the casino making the parking ramp available for those who attend performances at the city's new riverfront amphitheater down the street from the casino.
If approved by the state commission, the casino will take 12 to 14 months to build and open, Gray said.