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HomeMy WebLinkAbout06.23.2003• • COUNCIL WORK SESSION June 23, 2003 3:00 p.m. Council Chambers Members present: Mayor Roof, Kincaid, Welper, Greenwood, Clark, Jordan, Hurley, Getty. Moved by Jordan, seconded by Clark that the Agenda, as proposed, be approved. Ayes: Seven. Motion carried. Bruce Schmitter, Director of Operations, and Larry Seckington, Legal Counsel for Grace Entertainment, Inc., gave a presentation on their proposal to bring pari-mutuel gambling or riverboat gambling to Waterloo. Grace Entertainment's main goal is to bring a pari-mutuel gambling and/or riverboat gambling facility to Waterloo, and they would need a facility that could be licensed. They believe Greyhound Park would automatically be eligible to have a license. This would be a tremendous boost to the State of Iowa and Waterloo. Mr. Seckington stated that the requirement of 99F of the Iowa Code is that any facility licensed on January 1, 1994 would automatically be eligible for licensing by the Iowa Gaming Commission. Mr. Seckington reviewed the Woodlawns, which has a dog grand stand and horse grand stand. Mr. Seckington stated that Grace Entertainment is interested in Waterloo because there is existing infrastructure, a qualified license holder, referendum only needs 50 percent approval and there is a history of pari-mutuel gambling. Grace Entertainment, Inc. would do the following prior to the referendum: negotiate with the city, ask the Board of Supervisor to put the gambling issue on the ballot either at a general election or special election, and conduct a campaign for passage of the referendum. After the vote, Grace Entertainment, Inc. would provide the following: satisfy the current legal issue of the facility, negotiate agreement with the non-profit, satisfy requirements of the Iowa Racing & Gaming Commission, negotiate agreement with Greyhound indirectly, rehabilitate the facility and provide staff training. Mr. Schmitter reviewed riverboat gambling requirements, the process for riverboat gambling and construction of a riverboat. Mr. Schmitter stated that the criteria for riverboat gambling is the riverboat must cruise 100 days per year, and they must pay 125 percent of minimum federal wage. Mr. Seckington reviewed the definition of non-profit qualified sponsoring organization, characteristics of non-profit, and local referendum for riverboat gambling. Mr. Seckington stated that the current Iowa Racing & Gaming Commission's moratorium is just a rule, and it would take 60 to 190 days to get the rule rescinded. In order to have riverboat gambling, we would need a docking agreement, non-profit agreement, conduct a gaming market base, casino facility would be sized to market, and it seems to be locally well supported. Mr. Seckington reviewed the background of William Grace and Grace Entertainment, Inc. They have over 80 years of experience and employ 1,600 people. Mr. Seckington reviewed the jurisdictions where they are licensed, banking relationships, listing of casinos and games offered, and a summary of dollars invested. Mayor Rooff asked if it is possible to have a riverboat on property owned by the state. Mr. Seckington responded that they currently have one now on state-owned property. Mr. Seckington stated they would ask the voters to approve both riverboat gambling and pari- mutuel gambling. Mr. Seckington stated it is critical to have both options because of obstacles in front of the pari-mutuel gambling. Mr. Seckington stated that they don't normally have both in the same area, but they could down size each operation. Council Work Session June 23, 2003 Page 2 Mr. Seckington stated it is his understand that the National Cattle Congress's original loan was for $9.3 million at 10 percent interest, so we are probably talking about $19 million. Mr. Seckington stated there are a number of issues to resolve, but they are willing to proceed. Grace Entertainment, Inc. will do market studies to determine size of market to determine what to do here. Grace Entertainment would develop a campaign using newspapers, yard signs, and make power point presentations to all communities within Black Hawk County, civic organization, private groups, etc. Each community would need to be contacted and presentations made at all those organizations. Mr. Seckington stated the for a riverboat, the Iowa Racing & Gaming Commission requires substantial investments in land based, such as a facility, large tract of land for parking lot, hotel, convention center, etc. Mr. Seckington reported that part of the revenues go to the Department of Health, and Grace Entertainment's people are trained to watch for signs of gambling problems. Mr. Seckington stated Grace Entertainment's total investment here depends on the market study. Grace Entertainment, Inc. will pay for any special election costs. Mr. Seckington stated that they don't want to hurt the current hotels, so they will wait to see if they will need to have a hotel to meet the land based requirement. Mr. Schmitter reported that Grace Entertainment's facilities would pay personal and property taxes, one-half of one percent of adjusted gross receipts would be paid to the city and one-half of one percent of adjusted gross receipts would be paid to the county, and with riverboat gambling, up to fifty centers per person admission fee. Mr. Seckington stated that in order to justify money spent on campaign, they would like to be the gaming operation for the city. Mr. Seckington stated that in their opinion all that is needed is a referendum for pari-mutuel gambling as the statute reads "gaming operation shall issue license." Mr. Seckington stated if Grace Entertainment, Inc. gets the exclusivity, they would work on a petition and conduct a campaign for both pari-mutuel and riverboat gambling. There are a number of issues that will need to be resolved on pari-mutuel gambling. Grace Entertainment will also look at what remodeling needs to be done for the facility. Mr. Seckington stated that Grace Entertainment will pay all expenses, they are not asking for any tax incentives or grants so there is zero exposure to the city or Black Hawk County. Mr. Seckington stated they have done a preliminary profile, and their preliminary analysis shows room for either pari-mutuel or riverboat gambling. Mr. Seckington stated there is money leaving Black Hawk County going to Linn County to a facility that does not pay taxes. Mr. Seckington stated that the profile shows that most gamblers are over 55. Mr. Schmitter stated that the city is not legally required to put on the ballot what the money will be used for, but it is better if the city explains what the revenue will be used for. Mr. Schmitter stated that they estimate between $50 and $75 million for total gaming revenue. Don Hoth stated that the state taxes pari-mutuel gambling at 36 percent and riverboat gambling at 20 percent and asked how that will break down. Mr. Seckington responded that they do not tell the entities how to use the money they negotiate with them, but of course there is more to share at 80 percent than 64 percent. Mr. Hoth stated his group already has a non-profit and would distribute money back to the government. Mr. Hoth stated that exclusivity bothers him and asked if the city has the authority to approve an exclusive agreement or is it the Gaming Commission's authority. Mr. Seckington responded that they have an exclusivity at two other locations in Iowa. Mr. Seckington stated that Grace Entertainment needs assurance if they are going to invest their time and money for the referendum. Dennis Law, Manager of the Ramada Inn, stated they are concerned with adding another hotel to this area, and the city has put a considerable amount of money into the Five Sullivan Brothers Convention Center. Mr. Schmitter responded if the city already has a convention center, Grace Entertainment could look at other options for the land based. • • Council Work Session June 23, 2003 Page 3 • • Mr. Seckington stated that the timeline is to campaign and hold a referendum within 45 to 60 days, then it is up to the Gaming Commission as to the license for riverboat gambling. With pari-mutuel gambling, it depends on how long it takes to get through the legal issues. Pari- mutuel could have gaming machines in operation within 9 to 12 months. Grace Entertainment hopes to have one or both facilities in operations within two years. The council will review the information and get back to Grace Entertainment. With no further business before the council, it was moved by Clark, seconded by Jordan that the meeting be adjourned at 4:08 p.m. Ayes: Seven. Motion carried. Nancy Eckert City Clerk