Land casino coming to Bettendorf; riverboat will remain in Davenport

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By Tory Brecht and David Heitz | Wednesday, March 05, 2008 |

The Isle of Capri intends to build a land-based casino as part of its growing Bettendorf riverfront complex, company officials announced Wednesday.

At the same time, hopes for a first-class casino and hotel property in Davenport were dashed. Isle officials said that the Rhythm City Casino will be rebranded as a Lady Luck property — the casino company’s new brand for smaller casinos serving local markets.

The company views the Quad-Cities as one market, said Virginia McDowell, the Isle’s president

and chief operating officer.

“The company has always looked at the Quad-Cities as a region portfolio,” she said. “We have announced we are in our initial planning phases and intend to build a new land-based casino between the two hotel towers in Bettendorf. At this point, we have no plans to build a hotel on the (Davenport) riverfront, but we are evaluating our opportunity to upgrade the Rhythm City property as we introduce the Lady Luck brand.”

Isle officials gave no projection on costs or a timetable for the new casino in Bettendorf.

The Isle’s new strategic plan, announced to investors Wednesday, has financial implications for the two cities, which receive millions annually in their share of their respective casinos’ gambling receipts. Bettendorf’s portion stands to grow, but anything that exceeds $1.9 million annually will go toward repaying the Isle for helping fund an events center next to its casino complex.

Companywide, the Isle brand will include regional casinos with hotel rooms, convention facilities and upgraded amenities.

Bettendorf Mayor Mike Freemire said the commitment to a land-based casino by the Isle is the culmination of hard work by staff and elected officials. The state Legislature changed the law last year allowing casinos to move off water and onto land.

“I think Bettendorf has a long history of working well with business in general, and we have a very close and long history of dealing with the folks at the Isle of Capri,’’ he said. “We set up specifics in the development agreement, which we hoped would be encouraging to them to have a land-based casino. I think members of the council have all seen the documents, and they’re all very supportive.”

Bettendorf plans a $25 million events center as part of an agreement with the Isle to expand its operations that included a second hotel tower along the riverfront and a second parking garage. The new casino will be tucked between the hotel towers and attached to the events center via a skywalk.

Bettendorf City Administrator Decker Ploehn said this is “what we’ve envisioned for the last 15 years. Getting some kind of property secured vs. a boat means it will be here for a long period of time.”

Ploehn also noted that the Isle will pay property taxes on its land-casino, while riverboats are exempted.

Davenport officials expressed concern about what appears to be a downgrading of the gambling facility in the city. The city signed a development agreement in 2005, calling for the Isle to build a $43 million complex on city-owned riverfront property between Brady and Perry streets. It was to include a 10-story, 182-room hotel and a parking ramp.

“We’re not going to be a stepchild to Bettendorf in the long haul,” Davenport Mayor Bill Gluba said. “I know what I’d like to say, ideally, but I’m not going to comment on it now.

“They are putting their money in Bettendorf, bottom line. My guess is we will have a better handle on what we plan to do in 90 days or so. I will say that I think the best thing for gambling is competition.”

Second Ward Alderman Shawn Hamerlinck was less diplomatic. He believes the company never was serious about committing to a sizeable investment and planned to put all its eggs in the Bettendorf basket from the get go.

“They strung along not only the city, but the citizens of Davenport and even the state of Iowa,” which was contemplating giving Davenport a major riverfront development grant using the Isle’s investment as matching funds, Hamerlinck said. “They strung along the voting public who approved the referendum granting their license. And I think they’re going to have to answer to that voting public in the future.”

Tara Barney, president and CEO of DavenportOne, said the announcement means mixed news for the Quad-Cities.

“This seems like a great step for the Isle of Capri in Bettendorf because they will lead the way with a land-based casino,’’ Barney said. “But this is disappointing news for Davenport. The Downtown Partnership supported a plan three years ago that offered a chance to upgrade our riverfront and bring private investment into the RiverVision plan.

“From what I can tell from this announcement, what’s coming is pretty incompatible with their earlier positions. Unfortunately, the riverfront redevelopment has been slowed by the lack of a specific plan by the Isle of Capri regarding its plans for the Rhythm City Casino.”

McDowell, however, said Davenport’s elected officials are the ones who put the brakes on the 2005 project when the state changed its gaming laws, clearing the way for land-based casinos.

“A new hotel was originally part of the 2005 development agreement,” she said. “But when the law changed to allow land-based casinos, the city suggested looking at several other options, including the RiverCenter downtown. The community made it very clear they were not interested in having us move to the RiverCenter. We have continued to work on transfer of Blackhawk Hotel, which was part of the 2005 agreement.”

Isle and city officials will meet with the developers from Restoration St. Louis on Friday to complete transfer of the vacant downtown landmark, paving the way for its redevelopment, McDowell said.

Tory Brecht can be contacted at (563) 383-2329 or tbrecht@qctimes.com.

RELATED NEWS: Bernard Goldstein retires as head of Isle of Capri

Bernard Goldstein, who catapulted to the top position of one of the largest publicly held gaming companies in the United States after bringing riverboat gambling to the Quad-Cities, announced his retirement Wednesday as chief executive of Isle of Capri Casinos Inc.

Widely regarded as the “father of riverboat gambling,” Goldstein will be replaced by Jim Perry, who previously served as president, CEO and as a director for Trump Entertainment Resorts and Argosy Gaming Co.

“Since joining our board last July, Jim Perry has served as the chair of a joint strategic committee comprised of members of our board and our management team,” Goldstein said in a news release. “Our goal was to develop a plan to make our assets more competitive, more closely align our operating strategy with the needs of our customers and strengthen our balance sheet. I firmly believe that the strategic plan developed under his leadership will serve as a platform for the future growth of the company.”

Goldstein, who for decades helped make the Mississippi a working river through Alter Barge Line, Alter Trucking and Terminal Corp., River Gulf Grain Co. and other companies, brought the Diamond Lady riverboat to the Quad-Cities in 1991.

“It has been my pleasure to watch the company grow,” he said. “We have assembled a talented and respected team to ensure that the company continues to grow in the future.”

Goldstein will continue to serve as chairman of the board of the Isle of Capri.

David Heitz can be contacted at (563) 383-2202 or dheitz@qctimes.com.