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Bettendorf tweaks event center deal with Isle

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By David Heitz | Wednesday, May 21, 2008 |

The Bettendorf City Council voted unanimously Tuesday to approve a complicated document known as a “surplus allocation agreement” with the Isle of Capri in light of a $500,000 cost overrun on the downtown event center and other factors.

The city soon will issue up to $22 million in tax increment revenue bonds to help pay for construction of the event center. However, the bonds will be backed by the Isle instead of the city.

“When we issue the bonds, so the bondholders have a comfort level, they need to know there will be enough revenue to at

least pay the principal in

each payment as they come due each six months,” said City Attorney Greg Jager. “But they want more than that.”

The bondholders want the Isle to show an extra 15 percent with each payment, which will come in the form of property taxes. Combined with the potential for the bonds coming in at a more favorable rate than expected, there could be a surplus beyond the actual bond payment, Jager explained.

Under the agreement, if there is a surplus in the first 10 years, the Isle gets it back. However, if they get money this way, it will be a credit against monies they would have received from the gaming cap agreed to last year.

The city agreed to cap its portion of Isle gaming receipts at $1.9 million annually. The surplus agreement was written in a way to prevent the Isle from getting both the surplus revenue and the benefit of the cap on gaming.

Also, the agreement calls for the Isle to contribute $600,000 toward cost overruns for the event center. Jager said the building is over budget because “everything has gone up” since the center first was planned. “We have not expanded the size or put in anything fancy. It’s that construction costs have increased.”

The Isle also has asked for the title of the third floor of the parking ramp at the Isle complex, which the city was going to partially own. Although the deal needs approval from Vision Iowa, which also has contributed money to the project, the Isle would lease the third floor back to the city for $1 per year.

Also Tuesday, the council voted unanimously to approve the site development plan for the former Joevan/Shopko property at Middle Road and Interstate 74. Developer Curtis McDonald of Fairfield, Iowa, plans to build a new shopping center there called the Shoppes at Duck Creek.

Council members wanted assurances that parking would not be a problem at the center. Duck Creek Plaza, located across the street from the site, has experienced numerous parking woes.

Community Development Director Bill Connors said the developer will put in a light on Middle Road at the entrance/exit of the center. Other lights in the area will be synchronized to keep traffic moving, he said.

Four buildings will be situated on the 12.5-acre site, with room for two future buildings. Of the existing buildings, only the former Shopko store will remain. Demolition has begun.

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