Revenue drop predictedRacing and Gaming Commission to vote April 17 in Council Bluffs
According to two reports received by the Iowa Racing and Gaming Commission, if a proposed casino in Cedar Rapids is approved on April 17, the Riverside Casino and Golf Resort could lose between 28 and 40 percent of its revenues.
Washington County Riverboat Foundation executive assistant Jim Logan said a drop in revenues of this sort would also mean an equal decline in the amount that the foundation can give in grants. He also said a drop of this kind could lead to the loss of about 250 jobs at the casino. He said that the casino is the largest employer in Washington County, employing up to 750 workers.
“If we just said 30 percent, that would be a million dollars,” Logan said. “We average about $3.3 million per year, and 30 percent of that is $1 million.”
When the racing and gaming commission meets on April 17, it will vote on whether to grant a gaming license to the Cedar Rapids Development Group LLC to build a $164 million gaming structure called Cedar Crossing. Cedar Rapids leaders have said previously that the casino would be a capstone of recovery from the flood of 2008.
Since the proposal came up last year, all the cities and school districts in Washington County, as well as the county, have approved resolutions opposing the granting of the Cedar Rapids gaming license. Logan said hundreds of people from Washington County, including all the shareholders in the casino, have written letters to the commission.
On April 17, Washington County Economic Development director Ed Raber, also a member of the Riverboat Foundation, plans to attend the commission meeting in Council Bluffs.
“If you count the number of jobs that could be lost in Washington County and at the Waterloo casino, really there would be no job creation in Cedar Rapids — it would just be transferring jobs to Cedar Rapids,” he said.
Raber said that many of the offerings at the resort, including the golf course and several of the restaurants, rely on having a certain number of people inside the facility. He said some of the offerings might close.
Both Washington County and the City of Riverside share 0.5 percent revenue from the casino — about $400,000 each annually — which is used to offset property taxes. Raber said the amount would decrease by about one-third. He also said the revenues from the hotel/motel tax Riverside collects from the casino would go down.
“The City of Riverside could lose up to $500,000 per year,” Raber said.
While the foundation is not in peril of not being able to pay future commitments, Raber said that a new casino would reduce the amount the foundation could give in grants. The largest outstanding payment the foundation has is $2.5 million that was awarded to the Washington Iowa Betterment Foundation for the new Washington High School auditorium.
With less money, Raber predicted the competition for Riverboat grants would increase. He said that the foundation gives about $1.2 million in both its spring and fall grants, as well as mini-grants. In a previous year, the foundation was catching up with outstanding grants it had and only gave $650,000 in one grant cycle. Raber said that if revenues dropped, every cycle would be like that.
Raber said that casino owner Dan Kehl has told the commission that it is possible the entire operation would be in peril.
In his job of county economic development, Raber also said that he has dealt with businesses that count on traffic to the casino.
“It would generate a huge hole if the casino were to close,” Raber said. “The big concern when the casino was being proposed was that it would drive businesses out of business. I don’t think that has been the case. I think there have been some businesses that have adapted to focus on the patrons that attend the casino.”
Raber also said that the Riverboat Foundation has funded projects from Linn County. To the argument that Linn County isn’t getting any money from the casino, Raber said that few Linn County groups apply for funding. He said that the foundation gave $50,000 to St. Luke’s Hospital in Cedar Rapids during one cycle.