Isle offers to turn Blackhawk Hotel over to city for restoration

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By Tory Brecht and Tom Saul | Thursday, September 27, 2007 |

The Isle of Capri has offered to sell the Blackhawk Hotel to Davenport for $1, which would allow redevelopment of the building.

But implications of the proposal remain murky, City Administrator Craig Malin said Tuesday.

The offer ties release of the hotel to cancellation of a 2005 agreement by Isle to build a new riverfront hotel and parking ramp for its Rhythm City riverboat casino. It also would cancel other leases with the city. Various leases expire between 2010 and 2097.

Malin has asked city legal staff to review the proposal in context with other agreements between the city and the Isle and analyze its exact meaning regarding the Blackhawk and other leased city properties, including surface parking now used by the casino in LeClaire Park. The proposal will then be presented to aldermen for discussion and a decision.

“I don’t know if they are giving up the riverfront leases,” Malin said after reviewing the proposed agreement. “I don’t think they know what the ultimate resolution of land-based gaming is in Davenport, but they know that the city wants them to release the Blackhawk Hotel and to reclaim the riverfront for public use. Maybe this is a good-faith effort to move in that direction.”

The proposal does not give up current riverfront parking outside the casino, said Curtis Beason, a Davenport attorney who represents the Isle.

“We need it for our existing operation,” he said.

Isle also wants to lease 300 stalls in the city’s Redstone parking ramp at Main Street and River Drive all day, seven days a week. It currently leases spaces only on nights and weekends.

Under another proposal, the company would keep a parking lot it owns on East 3rd Street adjacent to the Blackhawk and lease it to the city. Other leases of city property now used for surface parking would be canceled, Beason said.

“These are lease realignments to adjust our parking to current needs,” Beason said.

But Beason said a 2005 agreement with the city would be officially canceled. That agreement called for Isle to build a $43 million hotel and parking complex on the riverfront between Brady and Perry streets and move the Rhythm City riverboat casino about a block east.

“This ties up all the loose ends,” Beason said of the proposal.

But Isle’s plans for its Davenport casino remain unclear, said Jill Haynes, company spokeswoman. The change in Iowa law to allow land-based casinos has changed the competitive landscape for gaming in the state.

“We will re-evaluate the Davenport property and stay in touch with the city,” she said.

In June, Isle officials offered to open a land-based casino in Davenport’s RiverCenter. The proposal came shortly after Malin sent a strongly worded letter urging the gaming company to show its hand regarding its future in the downtown.

“As you are no doubt aware, the city’s patience with regard to the Isle of Capri’s inaction is at its end,” Malin wrote to Beason. “The Isle’s comparative lack of investment in Davenport and apparent reconsideration in meeting terms of the 2005 development agreement have exacerbated unfavorable market conditions and jeopardized downtown and riverfront revitalization opportunities, as well as a significant state grant.”

The 2005 agreement includes financing to reclaim current surface parking in LeClaire Park as green space. The city has applied for a $13.8 million state Community Attraction and Tourism grant to expand and improve LeClaire and Centennial parks on the riverfront.

A series of city-sponsored meetings to talk about the proposal to move the casino into the RiverCenter drew mostly unfavorable comments from residents. On Sept. 5, aldermen voted to charge annual rent of $2 million instead of the $138,000 sought by Isle, a move Beason said likely killed the proposal.

At an Aug. 29 meeting, residents voiced support for renovation of the Blackhawk by Restoration St. Louis, a firm selected by the city to rehabilitate the 92-year-old, 11-story hotel at 200 E. 3rd St. downtown.

Officials from the company could not be reached for comment Tuesday on the proposal to release the building, but previously, Amrit Gill, president and chief operating officer, said it would be willing to wait to gain control of the structure and will spend its own money to redevelop the hotel.

Tom Saul can be contacted at (563) 383-2453 or tsaul@qctimes.com.

RESTORATION PLANS

Restoration St. Louis has proposed an ambitious renovation project that would transform the Blackhawk Hotel from a tarnished icon into a vibrant combination boutique hotel, banquet facility and condominiums.

Amrit and Amy Gill, owners of the company, told Davenport residents at an August meeting they would renovate the hotel at their own expense.

“We’ll be coming to the city with the sack of money, and we’ll be developing and managing the Blackhawk,” Amy Gill said. “We’re not coming to Davenport because of the casino. As soon as the the city hands us control of the building, we will begin working on it. If we got the go-ahead tomorrow, in 18 months you’d be attending events there.”

The company began as a small-scale, husband-and-wife operation in 1990, but it has grown to a 100-employee development team that owns and operates more than 1,000 residential apartment units. It was one of three that responded to the city’s request for qualifications in the fall.

In St. Louis, the company restored the long-vacant, 15-story Coronado Hotel, which dates to the turn of the century. It went from an empty shell to a thriving building featuring 64 apartments, a first-floor restaurant and patio cafe, high-end convenience store, fitness center and renovated ballroom that is used for receptions and corporate meetings.