Cedar Rapids casino proponents: Cedar Crossing will be ‘game-changer’

As speaker after speaker touted the economic and cultural benefits of the proposed Cedar Rapids casino in a formal presentation to the Iowa Racing and Gaming Commission (IRGC) Oct. 3, a central theme emerged: If approved, Cedar Crossing will be a “game-changer” on Iowa’s gaming landscape. “This isn't just about gaming,” Cedar Rapids Mayor Tiffany O’Donnell told the five-member commission during their monthly meeting at the Isle Casino Hotel in Bettendorf. “It is about growth opportunities and the revitalization of our community.” With a total proposed investment of $275 million, the latest iteration of the Cedar Crossing casino plan is nearly $100 million pricier than the most recent plan in 2017. That extra cost is focused primarily on non-gaming amenities, including a performance venue, a host of restaurants, an arts and cultural center and a STEM lab for area students. Casino supporters from Iowa-headquartered Peninsula Pacific Entertainment, a group of about 60 local investors dubbed the Cedar Rapids Development Group, and the nonprofit Linn County Gaming Association presented their formal case to the commission in several key focus areas: Economic impact, community support, impact on the state’s overall gaming industry, tourism benefits, employment opportunities, the development and sale of Iowa products, and amenities.

Economic impact

Brent Stevens, founder and chairman of Peninsula Pacific Entertainment (P2E) – the company that has worked to bring a casino to Cedar Rapids and Linn County for more than a decade – outlined the basics of the million Cedar Crossing development, which he termed “one of the largest (casino) investments in Iowa history.” “At its heart, yes, the project does have a casino,” Mr. Stevens said. “With 700 slots and 22 table games, it will offer an unparalleled, beautiful gaming experience. But this is way more than just a casino. Cedar Crossing is designed to be a comprehensive entertainment destination. We're talking about a vibrant mix of restaurants that will cater to every taste and a 1,500-capacity entertainment venue that will host top tier performers and events drawing visitors from across the state and beyond – something that we're very used to doing in our prior properties that you're familiar with. This venue is poised to become the driving force of Cedar Rapids, revitalize downtown and infuse the area with new energy and new development.” He said the project also includes an arts and cultural center, a STEM (Science, Technology, Engineering and Mathematics) lab for area students, and a shuttle service that will connect casino patrons with local hotels and attractions. “What truly makes this project stand out,” he added, “is the absolutely overwhelming support we have in the local community. Cedar Rapids is a city on the rise, growing very rapidly, and the community has rallied behind this project, recognizing its potential to fuel further growth and development.” Suzanne Leckert, managing partner of Convergence Strategy Group, which was commissioned by P2E to conduct a market study on the proposed casino’s economic impact, said that her report, based on mobile phone tracking data as opposed to previous studies’ reliance on gravity models, shows that Cedar Crossing would generate $108 million in gaming revenue annually, $80.2 million of which would be new revenue for the state. Casino construction will create the equivalent of 1,100 full-time jobs over its 18-month construction window, with over half that work going to Linn County residents, Ms. Leckert said. Construction would generate $303 million in additional spending in Iowa, including $102 million in wage earnings. Once operational, the casino would create 300 on-site jobs, with 224 more ancillary jobs in the community. Projections also indicate the new casino will draw more than 1.1 million visitors to Cedar Rapids per year and generate wagers of more than $100 million annually, as well as $66 million in ancillary spending. The casino would generate $33.5 million in total revenues to the community each year, including $23.9 million in annual gaming taxes, she said. The Convergence report indicates the Cedar Rapids market is dramatically underserved by the state's current casinos. And the “cannibalization” impact on existing casinos would be much less than previous reports have indicated – a drop of about $3 million per year at the Riverside Casino by the year 2029, and the casinos in Waterloo and Dubuque would actually see higher revenues. When the IRGC rejected casino proposals for Cedar Rapids in 2014 and 2017, commissioners indicated the potential for revenue cannibalization was among the key factors in their decision.

Community support

Cedar Rapids Mayor Tiffany O’Donnell said that the 2021 voter referendum that permanently authorized gaming in Linn County demonstrates the community’s broad support for a casino. “Cedar crossing represents a promise to voters who have said through two consecutive referenda that they want the same chance that others in our state have been granted – to bring a casino and entertainment center to Cedar Rapids, the second largest city in the state,” Ms. O’Donnell said. “This project has deep roots. It isn't just backed by organizations. Cedar Crossing proudly stands with the support of more than 60 local investors who supported this effort from the outset, more than a decade ago, the diverse group of small business owners, community leaders and everyday residents who believe deeply in the positive impact this casino will have on the city of Cedar Rapids.” Casino developers have also pledged to allocate 8% of gaming revenues to area nonprofit agencies – the highest percentage of any Iowa casino. Anne Parmley, board president of the Linn County Gaming Association – the organization that will coordinate distribution of those funds to area groups – said that the allocation would amount to an estimated $6.3 million annually. “As we look at how (casino) contributions can positively impact homelessness, affordable housing, veteran services and senior care, among many other causes, we can be so proud of how much the area and state would benefit if Cedar Crossing becomes a reality,” Ms. Parmley said. “The Boys and Girls Club, Four Oaks and the Eastern  Iowa Health Center are just three examples among hundreds of nonprofits that Cedar Crossing can make a transformable and sustainable impact. My fellow board members and I are excited to have the opportunity to contribute to our communities in such a meaningful way.”

Tourism impact

Jonathan Swain of P2E, president of the Cedar Rapids Development Group, highlighted the community and tourism benefits the new casino would bring, including the shuttle service running to a number of downtown area businesses and a point partnership program using credits granted to casino patrons. He also pointed out Cedar Crossing would incorporate three performance spaces, including the 1,500-seat venue that is anticipated to draw up to 125 shows annually, featuring regional and national performing acts. “Entertainment will be a key component to our project,” he said. “When we owned and operated Hard Rock in Sioux City, we sold tickets to guests from all 50 states and nine countries. We plan to replicate that success here, expanding our reach beyond just the local communities. We will work closely with the local tourism office. We are to make sure Crossing is a key player in the region's broader appeal.”

Development, sale of Iowa products

P2E president Aaron Gomes said one of the foundations of the Cedar Crossing project is a commitment to the “Buy Iowa First” program. “We're not just building a destination, we’re investing in Iowa itself,” Mr. Gomes said. “That means using Iowa-grown produce and sourcing local products and services whenever possible. We've done it before at our Diamond Jo properties, where we achieved 97% Iowa sourcing success rate, and we plan to bring that same dedication to Cedar Crossing. This commitment ensures that Cedar Crossing will benefit not only our guests, but the local businesses that make Cedar Rapids special.”

Overall impact

In conclusion, Mr. Stevens noted that the Cedar Rapids area has seen 12% population growth since 2017, and the gaming industry has grown from $1.5 billion to $2 billion during that time. “So Cedar Rapids has grown, and so have we,” he said. “We've listened very hard to what the community needs. Our needs and their needs have evolved, and so has our understanding. It's no longer just about gaming. It's really about connecting with the community. It's about the amenities. It's about creating a community center. So why now? We think we've got the right project. We think 2024 is the time.” Developers and supporters first unveiled plans for a Linn County casino in Cedar Rapids, dubbed “Cedar Crossing,” in May 2022. And the door was opened for a new Linn County gaming license application after a two-year state gaming license moratorium imposed by the Iowa Legislature expired June 30, and the IRGC indicated it was willing to accept new casino gaming license applications. However, some legislative leaders have indicated they may pursue another moratorium when the Iowa Legislature reconvenes in January. If approved, the casino would be built on city-owned property between F and I avenues NW and First and Fifth streets NW. Most of that property was previously occupied by the Cooper’s Mill restaurant and Best Western Hotel before those facilities were demolished due to damages sustained in the 2008 flood, and the property was subsequently acquired by the city. The city has designated the Cedar Rapids Development Group as their preferred casino developer. The IRGC will meet in Cedar Rapids Nov. 20 for a site visit and to host a question-and-answer session at the DoubleTree Hotel and Convention Complex for members of the public regarding the proposal. Two IRGC-commissioned market studies regarding the casino proposal are due to be submitted by Dec. 30, and those market studies will be presented at the commission’s regular meeting in Jefferson Jan. 25. The commission’s final vote on the Linn County gaming application is slated for a special meeting Feb. 6.