Cedar Rapids council OKs option agreement with potential casino developers

The Cedar Rapids City Council voted July 11 to approve an option agreement for the purchase and redevelopment of city-owned property for a potential casino. The council voted 7-1 to approve the agreement, with council member Ashley Vanorny casting the lone vote in opposition. Council member Scott Olson was absent. The measure formalizes terms of an agreement with the Cedar Rapids Development Group on an option for potential purchase of city-owned property on the west side of the Cedar River. Under the agreement, the CRDG will pay the city an option fee of $165,000 for the right to purchase city-owned property between F and I avenues NW and First and Fifth streets NW for construction of a casino, if the group receives a gaming license from the Iowa Racing and Gaming Commission (IRGC). Most of the property in question 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. A smaller portion of the property is privately owned. The option to purchase the property extends through Dec. 31, 2025, but if the IRGC were actively considering a Cedar Rapids casino application at that time, the option can be extended for another year at an additional cost of $55,000. When the agreement was first discussed by the council June 27, Cedar Rapids development director Caleb Mason noted the city has an exclusive memorandum of understanding with the CRDG and the Linn County Gaming Association to develop a casino in Cedar Rapids. That memorandum extends through October 2029. State lawmakers approved a two-year moratorium in June 2022 on consideration of any gaming license applications, but developers say they’ll pursue a license for Cedar Rapids when that moratorium expires in 2024. Linn County voters approved a measure in November 2021 that allows developers to seek a casino license for the county in perpetuity. Under the terms of the agreement, the developer is required to complete a 125,000-square-foot gaming facility that would incorporate restaurant space, event space and a gaming floor, no less than 1,500 parking spaces, and a minimum investment of $150 million if a license is issued. Back in May 2022, developers and supporters unveiled plans for the casino, dubbed Cedar Crossing. As proposed, Cedar Crossing would incorporate Iowa’s 20th state-licensed casino, as well as bars and restaurants featuring celebrity chefs. The agreement also includes a number of other conditions to be met by the developer, including accommodating the city’s ongoing flood control project, paying the costs of relocating utilities if needed, and conducting a traffic study in the area. Several speakers commented on the purchase agreement during the council’s public hearing, both in support and opposition, but council member Scott Overland said he felt the plan comprised a land development issue, rather than a larger council statement on casino gambling. “I’m not a gambler myself,” Mr. Overland said. “But what we're considering here today is taking a portion of that site and giving this group – that the council has voted to long support – an option to continue controlling the land in the event that they do get a casino license. The thing that has prevented the casino is the state has not granted a license. And until the state grants a license, there is no casino. “The other thing I think it's important to note is it doesn't matter what the city does,” he added. Whoever gets a license is going to build a casino in or around this area. There is no stopping that if they get a license … we need to take into consideration that it's up to the Racing and Gaming Commission. It's a highly political situation. And I wouldn't be betting my lunch tomorrow that a license comes around anytime soon.” In a news release after the meeting July 11, Peninsula Pacific Entertainment (P2E) officials hailed the council’s vote to approve the agreement. “We are pleased that the Cedar Rapids City Council has taken the next step to make Cedar Crossing a reality,” said P2E President Jonathan Swain. “Cedar Crossing will be the best casino construction project that Iowa has ever seen, and it will allow us to live out our mission of service, quality and community through charitable giving among Linn County nonprofits and funding to the City of Cedar Rapids.” Developers also highlighted their plans to allocate 8% of net gaming revenue from the casino’s operations to local nonprofits, an estimated annual total of $5 million to $7 million – more than double the state requirement – as well as establishing a Community Betterment Fund totaling 2.25% of net gaming revenue, or an estimated $2 million per year, to support economic development, affordable housing, trails and infrastructure and amenities or other activities, beginning one year after the new casino opens. “Cedar Rapids has an increasingly competitive market for nonprofit dollars,” said LCGA Board President Anne Parmley. “As other funding streams have left the community, we need a way to replace them to financially support the necessary work of our community’s nonprofits. Cedar Crossing is the perfect solution to fill that gap and ensure Cedar Rapids remains a great place to live, work and visit.”