23
Mar
2004
On Monday, the Rock Island City Council passed a development agreement with Jumer's Casino Rock Island that paves the way for a $90-million project that would shift the casino's gambling operations from the city's riverfront to the intersection of Interstate 280 and Highway 92.
It's the first volley in what could be called the Quad Cities' Casino Wars. In addition to the planned Jumer's Casino Rock Island development in southwest Rock Island, the Isle of Capri casino in Bettendorf has announced its intention to expand its hotel and build a conference center.
And Isle of Capri claims that its decision to move forward with improvements to its Bettendorf facility does not mean that its Davenport property - the Rhythm City Casino - will be neglected. "We're really excited about both properties," said Nancy Donovan, general manager of both casinos. She said Isle of Capri is still looking to build a riverfront hotel near the Rhythm City casino, and that Isle has no plans to move the boat from its current location adjacent to LeClaire Park.
In the fiscal year ending June 2003, the Rhythm City Casino had nearly $66 million in adjusted gross revenue, while the Isle of Capri was just short of $100 million. Jumer's Casino Rock Island had adjusted gross revenue of $40 million.
Those numbers are likely to change significantly in the coming years. Jumer's Casino Rock Island plans to open its new facility at the beginning of 2006, and while Isle of Capri has not set any timetable for its expansion projects, they are expected to take place in the next five years, Donovan said. Bettendorf's city administrator said an Isle of Capri financing proposal could go before the city council within 90 days.
All this activity raises several important issues, related to gambling, the tourism and convention business, and the economic impact of casinos. Will a Jumer's Casino Rock Island with more gaming positions bring new money to the Quad Cities or just cannibalize the market share of the other casinos? Will three new or expanded casino hotels increase the number and size of conventions in the Quad Cities or take business away from other hotels? And with three all-in-one gambling/hotel/entertainment/restaurant facilities, what is the real economic impact of casinos beyond the portion of proceeds earmarked for local governments and community projects?
The involved parties have yet to explore these questions publicly. The discussion at public meetings and in the media has been the promised economic-development and revenue benefits to the respective municipalities. For instance, Rock Island will get its riverfront back as well as millions in new revenue annually. Meanwhile, Bettendorf hopes to get new parking it expects to leverage additional downtown development.
The Big Picture
By far the biggest change to the Quad Cities gambling landscape would be the re-location and expansion of Jumer's Casino Rock Island. The casino would move to an interstate location that would be more accessible to visitors, and it would take away what's now the dominant feature of Rock Island's downtown riverfront. The addition of a hotel in the project's second phase could also help the perennially third-place casino contend with Isle of Capri's Bettendorf boat.
The project's first phase calls for construction of the casino itself, a one-level, 95,000-square-foot facility on a floating platform that will feature 40,000 square feet of gaming space - triple what the current boat has. Other components include parking for 1,800 vehicles. The second phase, scheduled to be finished by 2008, would include a 14-story hotel, meeting and banquet facilities, a theatre, and expanded parking.
The most important aspect of the Jumer's expansion is that the additional space allows the casino to increase its number of gaming positions to the 1,200 allowed by law. Presently, the boat has only half that many, making it the smallest riverboat casino in the state. Another key element is that traffic near the casino will jump from about 14,000 cars a day in downtown Rock Island to 40,000 vehicles a day at the interstate site. "This area is very, very important because of its proximity to major roadways and the amount of development space," said William Renk, vice president of sales and marketing for Jumer's Casino Rock Island.
The move of Jumer's Casino Rock Island and the possible expansion of the Isle of Capri's amenities suggest a situation in which two major casinos situated right off interstate highways compete for the big dollars while the Rhythm City Casino is relegated to the sidelines.
But representatives of Isle of Capri and Rhythm City say that won't happen. Rhythm City needs to be a vital part of the equation, because the goal - for the good of the casinos and the community - is to draw new people to the Quad Cities with improved gambling options. "If they [the three casinos] are content to slice the same pie, it's a problem," said Mary Ellen Chamberlin, president of the Riverboat Development Authority. "The key to this area's success is that everyone is a player in growing the market."
Chamberlin, whose Riverboat Development Authority administers the Rhythm City Casino gambling license, said eastern Iowa "has room to grow" in the gambling market. She pointed to a study submitted last year to the Iowa Racing & Gaming Commission that looked at how much money new gambling licenses would bring the state.
The study was meant to identify the effect of new gaming facilities, but it does hint that beefing up the existing casinos and adding amenities to them would draw more people to the area. "Larger facilities attract more people," it says, "not just from size in and of itself, but because they are more diverse, generally (though not always) offer a greater variety and higher level of amenities, and generally (though not always) have greater resources to spend on marketing and promotion." It goes on to state: "When there are multiple facilities within a market, or in closely adjoining markets, customers benefit from the competition between facilities for their business. In the real world, 'more' is not necessarily better, but it so often is that the data indicate quite clearly that it is a major factor, second only to distance, in consumers' choice among alternative facilities." (This doesn't take into consideration that two of the Quad Cities' gambling options are owned by the same company.)
The argument is that the gambling pie can grow, and that the three casinos won't just be fighting for existing customers. "I think they can all be healthy," Chamberlin said. "They can fill a niche in the community."
But the study doesn't address that issue directly. In fact, the report basically argues that only two markets are presently underserved in Iowa: "Waterloo and Cedar Rapids are the only major markets that appear to offer substantial promise without major adverse impacts on some of Iowa's existing gaming facilities."
Still, Will Cummings, the author of the study commissioned by the state of Iowa, said that expansion of Quad Cities facilities could bring in more revenue without cannibalizing other casinos. He said that larger facilities - even if they don't involve more gaming positions - can result in more business. "In most cases, the core question is not really the size but the attractiveness of the whole package," he said. Amenities can be "as important or more important than the raw numbers" of gaming positions. "You don't simply add 400 more slots."
Chamberlin points to Council Bluffs, Iowa, as an example of what can happen with multiple gaming facilities with hotels attached. The city (population 58,000) has two riverboat casinos that combined bring in more than $250 million a year - they're the best-performing casinos in the state - and a racetrack with gaming positions that generate $123 million a year. "Those are all in downtown," Chamberlin said. "It is developing the tourist industry." When people come from outside the area to visit a casino, she said, "they generally go to all the casinos."
Of course, there's still likely to be a shift in how the local gaming pie is divided. "We certainly will take our fair share of whatever that local market is," Renk said.
But growth is the key, casino representatives said. Jumer's Casino Rock Island, which has traditionally only served the local market, will expand its reach to about a 200-mile radius, Renk said. And that could be good for everybody. "We're adding to the overall experience the Quad Cities has to offer," he said.
It's important to note, though, that the economic impact of new visitors the casinos attract might not be very large outside of the gambling operations themselves. All three Quad Cities gaming options are moving toward a model of self-sufficiency, in which patrons never need to leave the property for entertainment, food, or lodging. That means people are less likely to spend their money at other Quad Cities businesses and attractions.
Good for Hotels?
There's also the question of whether two new casino hotels (Jumer's and Rhythm City) and an expanded casino hotel (Isle of Capri) will be good for other Quad Cities hotels. Danny Holmes, general manager of the Radisson Quad City Plaza Hotel & Conference Center in downtown Davenport, said, "We do not need another hotel right now. We're at less than 55 percent occupancy as a community."
Holmes said that the need to accommodate larger conferences and conventions with more hotel rooms was what led to construction of his property eight years ago. The Radisson was built, in part, to supplement the Blackhawk Hotel's rooms for the RiverCenter to be more successful in luring larger trade shows and meetings.
But the future of the Blackhawk (owned by Isle of Capri) is uncertain with Isle of Capri's plans for a riverfront hotel for the Rhythm City casino. (See "Whither the Blackhawk," River Cities' Reader Issue 424, May 7, 2003.) With the Blackhawk being made available primarily for casino guests now, "We're right back where we started," Holmes said.
But Chamberlin argued that a Rhythm City riverfront hotel would be good for both the Radisson and the Blackhawk - assuming the latter stays open as a hotel. Moving player rooms to the riverfront opens up the Blackhawk for conventions, "thus increasing the whole pie," she said.
And Donovan said an expanded Isle of Capri hotel will benefit other hotels, particularly in Bettendorf. She says the Isle of Capri is trying to "build business from outer markets" such as Chicago.
If the convention center can attract large meetings, "we're not going to be able to house the need," she said. And that's where other properties can help out. "We know there's inventory in the Quad Cities that's not being used," she said.
Joe Taylor, president of the Quad Cities Convention & Visitors Bureau, said larger blocks of available hotel rooms might attract bigger conventions to the Quad Cities. "Conventions prefer to be at one location, under one roof, with no transportation" necessary to get from the hotel to the meeting site, he said. And conventions with more than 500 delegates need to be housed at multiple sites right now, he said.
Still, he viewed the new casino-hotel developments as representing a shift in thinking rather than meeting a community need. Developers "are focusing on the river" because "visitors coming to the Quad Cities are coming to the river," he said. "I see it as a realignment."
Jumer's Casino Rock Island
The re-location of Jumer's Casino Rock Island is a no-brainer for the City of Rock Island. The casino presently gives 5 percent of its adjusted gross revenue and $1 a head to the City of Rock Island; the casino's annual contributions to city coffers end up at about $4 million a year right now, said Rock Island City Manager John C. Phillips.
The new facility would generate about $6 million a year for the city with expanded gaming, a higher assessed valuation on its property, and other factors such as sales tax, Phillips said. Jumer's Casino Rock Island expects its gaming revenues to double in the first year of its new facility.
It's little wonder, then, that the city is doing everything it can to facilitate the move. The development agreement passed earlier this week included tax-increment financing (TIF) for the project in which 75 percent of the increased property value is returned to Jumer's Casino Rock Island for eligible infrastructure improvements. The term of the TIF district would be 13 years, and Phillips said there's no cap on how much money the casino could get.
The city looks at the TIF as a good deal for it and other taxing bodies in Rock Island County. For one thing, Casino Rock Island is paying for all the infrastructure, including the interstate interchange, the street leading up to the casino facility, and the water and sewer lines. "The city is not doing any of the work," Phillips said.
In addition, the city estimates that Jumer's Casino Rock Island will be paying in the neighborhood of $1 million a year in property taxes, and even during the life of the TIF, a quarter of that money will be going back to taxing bodies. And because the casino pays very little in property taxes now, that $250,000 during the TIF's life "is almost net" for the taxing bodies, Phillips said.
Isle of Capri
While the Jumer's deal has already gotten its public vetting, plans for an Isle of Capri expansion are in their early stages.
"It's pretty conceptual," Donovan said. She added that the local Isle of Capri and Rhythm City have gotten indications from corporate representatives that their expansions are in the company's five-year strategic plan.
Donovan also said she's been given no indication from corporate that her company's successful bid for Illinois' 10th casino license would affect local expansion plans. Last week, the Illinois Gaming Board awarded the license to Isle of Capri after the company's $518-million bid.
But the Isle project might actually move forward quickly. The casino and the City of Bettendorf would "like to see something consummated this spring or summer," said Bettendorf City Administrator Decker Ploehn.
While there aren't many details available about the Isle of Capri expansion, some things have already been put on the table. The expansion would involve nearly double the hotel rooms, a new 40,000-square-foot convention center, new parking, and a walkway connecting the various parts of the compound.
According to Donovan, there's no price tag on the expansion/convention-center proposal yet, or any estimate of how much money the casino is asking for from the city. She did say the casino is looking to use Tax Increment Financing to offset some of the cost.
But TIF likely won't be enough, Ploehn said. Rough estimates on the property-tax value of hotel rooms would put the expansion increment at $25 million, which wouldn't be sufficient to generate the roughly $15 million needed for a convention center over the life of a TIF district - even one that lasts 20 years.
In addition, Isle of Capri has asked the city to consider TIF for the parking garage and the walkway, said Greg Jager, Bettendorf's city attorney.
That means "it's entirely possible" that both the city and Isle of Capri are going to be asked to contribute some cash to the expansion project, Ploehn said. He declined to say how much that might be, though: "We have not approached the council yet."
Jager said the city has previously used TIF for parking structures, but that there's no precedent in Bettendorf for assistance with a walkway or conference center. The key, he said, is whether the advantages to Bettendorf and its downtown are greater than the cost to local taxing bodies of TIF.
The Isle of Capri expansion is viewed as part of the city's downtown-revitalization strategy. The parking garage could be used by new businesses in the area, including two commercial structures planned for construction this summer. Those projects, an office building by Kevin Koellner of Design-Build Associates and one condo and commercial building by residential developer Craig Windmiller, would both be located at 17th and State streets in Bettendorf. Tax Increment Financing for those buildings will be before the city council next month.
The hotel expansion would probably happen no matter what, although perhaps not with the quantity of rooms currently proposed. The existing Isle of Capri hotel, with 256 rooms, has run at more than 90-percent capacity for the past three years, Donovan said. The expansion would add 250 rooms. "There's a higher demand than we're able to meet," Donovan said.
The other components of the expansion - the parking garage and the convention center - would be undertaken in cooperation with the city, and for that reason, one should expect relatively swift passage by the city council.
Rhythm City
With these big plans for Isle of Capri and Jumer's Casino Rock Island, it might seem that Rhythm City will get left out. Not so, Chamberlin said.
"We're the hottest property in the Isle's group of properties," Chamberlin said, with "tremendous growth over the winter months." That was echoed by Donovan, who said Rhythm City Casino has recently had the largest gain among Isle of Capri's 15 gambling properties.
Chamberlin noted that the Riverboat Development Authority is guaranteed roughly $38,500 a week - $2 million a year - from Rhythm City Casino receipts, but it has received $25,000 over the guarantee in each of three recent weeks.
Rhythm City is still recovering from a period when the casino - under the name of the President - was up for sale and then closed during the flood of 2001. Riverboat Development Authority receipts in fiscal 2002-3 were about $2.6 million, Chamberlin said, below the President's high of just over $3 million. She added that she expects the RDA to come close to the $3-million figure this year.
Another factor in the future of the Rhythm City Casino is legislation that would remove a requirement that riverboat casinos cruise. That bill, which has passed the Iowa House but not the Senate, could pave the way for a riverfront hotel extending out on a pier to the floating casino - "a totally different configuration" than the current setup, Chamberlin said.
A new parking garage could also be in the works near the Rhythm City casino. The City of Davenport is currently exploring re-claiming parking lots along the riverfront for green space as part of its "River Vision" project with Rock Island. That would, Donovan said, necessitate replacement parking.
A common theme in all these casino developments is that they promise benefits to both the host cities and the casinos. Rock Island gets its riverfront back. Bettendorf gets new parking perceived as necessary for downtown development. And Davenport would be able to replace parking with riverfront park space.
More than that, though, these projects promise financial windfalls for the cities, with new property-tax and gaming revenues.
That's the pitch, at least. It remains to be seen whether all these proposed hotel rooms and expansions can take place essentially without cost - to other casinos and the existing hotel/convention industry.
It's the first volley in what could be called the Quad Cities' Casino Wars. In addition to the planned Jumer's Casino Rock Island development in southwest Rock Island, the Isle of Capri casino in Bettendorf has announced its intention to expand its hotel and build a conference center.
And Isle of Capri claims that its decision to move forward with improvements to its Bettendorf facility does not mean that its Davenport property - the Rhythm City Casino - will be neglected. "We're really excited about both properties," said Nancy Donovan, general manager of both casinos. She said Isle of Capri is still looking to build a riverfront hotel near the Rhythm City casino, and that Isle has no plans to move the boat from its current location adjacent to LeClaire Park.
In the fiscal year ending June 2003, the Rhythm City Casino had nearly $66 million in adjusted gross revenue, while the Isle of Capri was just short of $100 million. Jumer's Casino Rock Island had adjusted gross revenue of $40 million.
Those numbers are likely to change significantly in the coming years. Jumer's Casino Rock Island plans to open its new facility at the beginning of 2006, and while Isle of Capri has not set any timetable for its expansion projects, they are expected to take place in the next five years, Donovan said. Bettendorf's city administrator said an Isle of Capri financing proposal could go before the city council within 90 days.
All this activity raises several important issues, related to gambling, the tourism and convention business, and the economic impact of casinos. Will a Jumer's Casino Rock Island with more gaming positions bring new money to the Quad Cities or just cannibalize the market share of the other casinos? Will three new or expanded casino hotels increase the number and size of conventions in the Quad Cities or take business away from other hotels? And with three all-in-one gambling/hotel/entertainment/restaurant facilities, what is the real economic impact of casinos beyond the portion of proceeds earmarked for local governments and community projects?
The involved parties have yet to explore these questions publicly. The discussion at public meetings and in the media has been the promised economic-development and revenue benefits to the respective municipalities. For instance, Rock Island will get its riverfront back as well as millions in new revenue annually. Meanwhile, Bettendorf hopes to get new parking it expects to leverage additional downtown development.
The Big Picture
By far the biggest change to the Quad Cities gambling landscape would be the re-location and expansion of Jumer's Casino Rock Island. The casino would move to an interstate location that would be more accessible to visitors, and it would take away what's now the dominant feature of Rock Island's downtown riverfront. The addition of a hotel in the project's second phase could also help the perennially third-place casino contend with Isle of Capri's Bettendorf boat.
The project's first phase calls for construction of the casino itself, a one-level, 95,000-square-foot facility on a floating platform that will feature 40,000 square feet of gaming space - triple what the current boat has. Other components include parking for 1,800 vehicles. The second phase, scheduled to be finished by 2008, would include a 14-story hotel, meeting and banquet facilities, a theatre, and expanded parking.
The most important aspect of the Jumer's expansion is that the additional space allows the casino to increase its number of gaming positions to the 1,200 allowed by law. Presently, the boat has only half that many, making it the smallest riverboat casino in the state. Another key element is that traffic near the casino will jump from about 14,000 cars a day in downtown Rock Island to 40,000 vehicles a day at the interstate site. "This area is very, very important because of its proximity to major roadways and the amount of development space," said William Renk, vice president of sales and marketing for Jumer's Casino Rock Island.
The move of Jumer's Casino Rock Island and the possible expansion of the Isle of Capri's amenities suggest a situation in which two major casinos situated right off interstate highways compete for the big dollars while the Rhythm City Casino is relegated to the sidelines.
But representatives of Isle of Capri and Rhythm City say that won't happen. Rhythm City needs to be a vital part of the equation, because the goal - for the good of the casinos and the community - is to draw new people to the Quad Cities with improved gambling options. "If they [the three casinos] are content to slice the same pie, it's a problem," said Mary Ellen Chamberlin, president of the Riverboat Development Authority. "The key to this area's success is that everyone is a player in growing the market."
Chamberlin, whose Riverboat Development Authority administers the Rhythm City Casino gambling license, said eastern Iowa "has room to grow" in the gambling market. She pointed to a study submitted last year to the Iowa Racing & Gaming Commission that looked at how much money new gambling licenses would bring the state.
The study was meant to identify the effect of new gaming facilities, but it does hint that beefing up the existing casinos and adding amenities to them would draw more people to the area. "Larger facilities attract more people," it says, "not just from size in and of itself, but because they are more diverse, generally (though not always) offer a greater variety and higher level of amenities, and generally (though not always) have greater resources to spend on marketing and promotion." It goes on to state: "When there are multiple facilities within a market, or in closely adjoining markets, customers benefit from the competition between facilities for their business. In the real world, 'more' is not necessarily better, but it so often is that the data indicate quite clearly that it is a major factor, second only to distance, in consumers' choice among alternative facilities." (This doesn't take into consideration that two of the Quad Cities' gambling options are owned by the same company.)
The argument is that the gambling pie can grow, and that the three casinos won't just be fighting for existing customers. "I think they can all be healthy," Chamberlin said. "They can fill a niche in the community."
But the study doesn't address that issue directly. In fact, the report basically argues that only two markets are presently underserved in Iowa: "Waterloo and Cedar Rapids are the only major markets that appear to offer substantial promise without major adverse impacts on some of Iowa's existing gaming facilities."
Still, Will Cummings, the author of the study commissioned by the state of Iowa, said that expansion of Quad Cities facilities could bring in more revenue without cannibalizing other casinos. He said that larger facilities - even if they don't involve more gaming positions - can result in more business. "In most cases, the core question is not really the size but the attractiveness of the whole package," he said. Amenities can be "as important or more important than the raw numbers" of gaming positions. "You don't simply add 400 more slots."
Chamberlin points to Council Bluffs, Iowa, as an example of what can happen with multiple gaming facilities with hotels attached. The city (population 58,000) has two riverboat casinos that combined bring in more than $250 million a year - they're the best-performing casinos in the state - and a racetrack with gaming positions that generate $123 million a year. "Those are all in downtown," Chamberlin said. "It is developing the tourist industry." When people come from outside the area to visit a casino, she said, "they generally go to all the casinos."
Of course, there's still likely to be a shift in how the local gaming pie is divided. "We certainly will take our fair share of whatever that local market is," Renk said.
But growth is the key, casino representatives said. Jumer's Casino Rock Island, which has traditionally only served the local market, will expand its reach to about a 200-mile radius, Renk said. And that could be good for everybody. "We're adding to the overall experience the Quad Cities has to offer," he said.
It's important to note, though, that the economic impact of new visitors the casinos attract might not be very large outside of the gambling operations themselves. All three Quad Cities gaming options are moving toward a model of self-sufficiency, in which patrons never need to leave the property for entertainment, food, or lodging. That means people are less likely to spend their money at other Quad Cities businesses and attractions.
Good for Hotels?
There's also the question of whether two new casino hotels (Jumer's and Rhythm City) and an expanded casino hotel (Isle of Capri) will be good for other Quad Cities hotels. Danny Holmes, general manager of the Radisson Quad City Plaza Hotel & Conference Center in downtown Davenport, said, "We do not need another hotel right now. We're at less than 55 percent occupancy as a community."
Holmes said that the need to accommodate larger conferences and conventions with more hotel rooms was what led to construction of his property eight years ago. The Radisson was built, in part, to supplement the Blackhawk Hotel's rooms for the RiverCenter to be more successful in luring larger trade shows and meetings.
But the future of the Blackhawk (owned by Isle of Capri) is uncertain with Isle of Capri's plans for a riverfront hotel for the Rhythm City casino. (See "Whither the Blackhawk," River Cities' Reader Issue 424, May 7, 2003.) With the Blackhawk being made available primarily for casino guests now, "We're right back where we started," Holmes said.
But Chamberlin argued that a Rhythm City riverfront hotel would be good for both the Radisson and the Blackhawk - assuming the latter stays open as a hotel. Moving player rooms to the riverfront opens up the Blackhawk for conventions, "thus increasing the whole pie," she said.
And Donovan said an expanded Isle of Capri hotel will benefit other hotels, particularly in Bettendorf. She says the Isle of Capri is trying to "build business from outer markets" such as Chicago.
If the convention center can attract large meetings, "we're not going to be able to house the need," she said. And that's where other properties can help out. "We know there's inventory in the Quad Cities that's not being used," she said.
Joe Taylor, president of the Quad Cities Convention & Visitors Bureau, said larger blocks of available hotel rooms might attract bigger conventions to the Quad Cities. "Conventions prefer to be at one location, under one roof, with no transportation" necessary to get from the hotel to the meeting site, he said. And conventions with more than 500 delegates need to be housed at multiple sites right now, he said.
Still, he viewed the new casino-hotel developments as representing a shift in thinking rather than meeting a community need. Developers "are focusing on the river" because "visitors coming to the Quad Cities are coming to the river," he said. "I see it as a realignment."
Jumer's Casino Rock Island
The re-location of Jumer's Casino Rock Island is a no-brainer for the City of Rock Island. The casino presently gives 5 percent of its adjusted gross revenue and $1 a head to the City of Rock Island; the casino's annual contributions to city coffers end up at about $4 million a year right now, said Rock Island City Manager John C. Phillips.
The new facility would generate about $6 million a year for the city with expanded gaming, a higher assessed valuation on its property, and other factors such as sales tax, Phillips said. Jumer's Casino Rock Island expects its gaming revenues to double in the first year of its new facility.
It's little wonder, then, that the city is doing everything it can to facilitate the move. The development agreement passed earlier this week included tax-increment financing (TIF) for the project in which 75 percent of the increased property value is returned to Jumer's Casino Rock Island for eligible infrastructure improvements. The term of the TIF district would be 13 years, and Phillips said there's no cap on how much money the casino could get.
The city looks at the TIF as a good deal for it and other taxing bodies in Rock Island County. For one thing, Casino Rock Island is paying for all the infrastructure, including the interstate interchange, the street leading up to the casino facility, and the water and sewer lines. "The city is not doing any of the work," Phillips said.
In addition, the city estimates that Jumer's Casino Rock Island will be paying in the neighborhood of $1 million a year in property taxes, and even during the life of the TIF, a quarter of that money will be going back to taxing bodies. And because the casino pays very little in property taxes now, that $250,000 during the TIF's life "is almost net" for the taxing bodies, Phillips said.
Isle of Capri
While the Jumer's deal has already gotten its public vetting, plans for an Isle of Capri expansion are in their early stages.
"It's pretty conceptual," Donovan said. She added that the local Isle of Capri and Rhythm City have gotten indications from corporate representatives that their expansions are in the company's five-year strategic plan.
Donovan also said she's been given no indication from corporate that her company's successful bid for Illinois' 10th casino license would affect local expansion plans. Last week, the Illinois Gaming Board awarded the license to Isle of Capri after the company's $518-million bid.
But the Isle project might actually move forward quickly. The casino and the City of Bettendorf would "like to see something consummated this spring or summer," said Bettendorf City Administrator Decker Ploehn.
While there aren't many details available about the Isle of Capri expansion, some things have already been put on the table. The expansion would involve nearly double the hotel rooms, a new 40,000-square-foot convention center, new parking, and a walkway connecting the various parts of the compound.
According to Donovan, there's no price tag on the expansion/convention-center proposal yet, or any estimate of how much money the casino is asking for from the city. She did say the casino is looking to use Tax Increment Financing to offset some of the cost.
But TIF likely won't be enough, Ploehn said. Rough estimates on the property-tax value of hotel rooms would put the expansion increment at $25 million, which wouldn't be sufficient to generate the roughly $15 million needed for a convention center over the life of a TIF district - even one that lasts 20 years.
In addition, Isle of Capri has asked the city to consider TIF for the parking garage and the walkway, said Greg Jager, Bettendorf's city attorney.
That means "it's entirely possible" that both the city and Isle of Capri are going to be asked to contribute some cash to the expansion project, Ploehn said. He declined to say how much that might be, though: "We have not approached the council yet."
Jager said the city has previously used TIF for parking structures, but that there's no precedent in Bettendorf for assistance with a walkway or conference center. The key, he said, is whether the advantages to Bettendorf and its downtown are greater than the cost to local taxing bodies of TIF.
The Isle of Capri expansion is viewed as part of the city's downtown-revitalization strategy. The parking garage could be used by new businesses in the area, including two commercial structures planned for construction this summer. Those projects, an office building by Kevin Koellner of Design-Build Associates and one condo and commercial building by residential developer Craig Windmiller, would both be located at 17th and State streets in Bettendorf. Tax Increment Financing for those buildings will be before the city council next month.
The hotel expansion would probably happen no matter what, although perhaps not with the quantity of rooms currently proposed. The existing Isle of Capri hotel, with 256 rooms, has run at more than 90-percent capacity for the past three years, Donovan said. The expansion would add 250 rooms. "There's a higher demand than we're able to meet," Donovan said.
The other components of the expansion - the parking garage and the convention center - would be undertaken in cooperation with the city, and for that reason, one should expect relatively swift passage by the city council.
Rhythm City
With these big plans for Isle of Capri and Jumer's Casino Rock Island, it might seem that Rhythm City will get left out. Not so, Chamberlin said.
"We're the hottest property in the Isle's group of properties," Chamberlin said, with "tremendous growth over the winter months." That was echoed by Donovan, who said Rhythm City Casino has recently had the largest gain among Isle of Capri's 15 gambling properties.
Chamberlin noted that the Riverboat Development Authority is guaranteed roughly $38,500 a week - $2 million a year - from Rhythm City Casino receipts, but it has received $25,000 over the guarantee in each of three recent weeks.
Rhythm City is still recovering from a period when the casino - under the name of the President - was up for sale and then closed during the flood of 2001. Riverboat Development Authority receipts in fiscal 2002-3 were about $2.6 million, Chamberlin said, below the President's high of just over $3 million. She added that she expects the RDA to come close to the $3-million figure this year.
Another factor in the future of the Rhythm City Casino is legislation that would remove a requirement that riverboat casinos cruise. That bill, which has passed the Iowa House but not the Senate, could pave the way for a riverfront hotel extending out on a pier to the floating casino - "a totally different configuration" than the current setup, Chamberlin said.
A new parking garage could also be in the works near the Rhythm City casino. The City of Davenport is currently exploring re-claiming parking lots along the riverfront for green space as part of its "River Vision" project with Rock Island. That would, Donovan said, necessitate replacement parking.
A common theme in all these casino developments is that they promise benefits to both the host cities and the casinos. Rock Island gets its riverfront back. Bettendorf gets new parking perceived as necessary for downtown development. And Davenport would be able to replace parking with riverfront park space.
More than that, though, these projects promise financial windfalls for the cities, with new property-tax and gaming revenues.
That's the pitch, at least. It remains to be seen whether all these proposed hotel rooms and expansions can take place essentially without cost - to other casinos and the existing hotel/convention industry.
