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HomeMy WebLinkAboutMinutes-09/24/2003• • September 24, 2003 The Council of the City of Waterloo, Iowa, met in Special Session at City Hall Council Chambers, Waterloo, Iowa, at 7:30 a.m., on Wednesday, September 24, 2003. Mayor John R. Rooff in the Chair. Roll Call: Kincaid, Welper, Greenwood, Clark, Jordan, Hurley, Getty. 118896 - Jordan/Clark that the Agenda, as proposed, for the Special Session on Wednesday, September 24, 2003, at 7:30 a.m., be accepted and approved. Ayes: Seven. Motion carried. 118897 - Jordan/Welper that copies of the Call for the Special Session on Wednesday, September 24, 2003, be received and placed on file. Ayes: Seven. Motion carried. NEW BUSINESS 118898 - Mayor Rooff reported that the city was approached by Grace Entertainment to have gaming in Black Hawk County and they also met with a group from Las Vegas at the Livingston building at the Waterloo Regional Airport, and they were also interested. The City Council met with Grace Entertainment, and they wanted everyone to have an opportunity to present their plan. Mayor Rooff stated yesterday he also spoke with Lorenzo Creighton in Las Vegas to see what his interest might be. Mayor Rooff stated during this time, a petition with 7,000 signatures was presented to the Black Hawk County Board of Supervisors requesting a referendum on riverboat gambling in Black Hawk County The Board of Supervisors set the date of October 7, 2003 on the referendum. Mayor Rooff reported that Gary and Becky Bertch were planning an expansion to their operation at Lost Island Park. Isle of Capri Casinos, Inc. was interested in coming here and traveled all over the county and with Planning staff located three spots on the river. Isle of Capri got together with the Bertches, and they have developed a plan. Mayor Rooff stated it is important that the council enter into an agreement with Black Hawk County Gaming Association, a not-for-profit organization. Mayor Rooff stated interest in pari-mutuel gambling and racing at the dog track has been discussed, and we have tried to keep them involved. Mayor Rooff reported that the proposed plan with Isle of Capri Casinos, Inc. and Gary and Becky Bertch involves creation of over 800 jobs and investment of over $70 million. Gary Bertch reported that they have been working over the past year on a preliminary concept on a recreational and entertainment development complex with the Water Park as the anchor. Mr. Bertch stated there are a number of components, including a 4-D movie theater, enclosed botanical gardens, a large recreational vehicle park, a theme restaurant and other attractions. Mr. Bertch stated that the plan includes 150 acres of total development, and a lake site for anesthetic purposes was included. Mr. Bertch stated that in discussions with Don Hoth they revealed their plans and offered the site has another potential area for riverboat gambling. Don Hoth acknowledged the work done by Jim Lind and Bob Fulton. Mr. Hoth reported that the Black Hawk County Gaming Association met with seven gaming companies and narrowed that list down to three. They looked at their financial statements and criteria for gaming company. The group visited 21 casinos in five states, looked at the facilities, their investment, talked to employees, looked at the services offered, and the cleanliness of the building. Mr. Hoth reported that the group's choice was Isle of Capri Casinos, Inc. Mr. Hoth stated that Isle of Capri basically started in Iowa, and they liked their commitment to the county and community and they are a good corporate citizen. Mr. Hoth stated they looked at all the agreements in the State of Iowa to make sure we had the best financial arrangements in Black Hawk County. Tim Hinkley, Chief Operating Officer for Isle of Capri Casinos, Inc., explained that Isle of Capri has grown to become the seventh largest publicly traded gaming company in the United States. It owns and operates three boats in Iowa: the Isle of Capri at Marquette -McGregor and Bettendorf and the Rhythm City casino in Davenport. Isle of Capri owns 11 gaming facilities in Mississippi, Louisiana, Missouri and Iowa and has a majority interest in two more in Colorado and a pari-mutuel harness racing track in Florida. Mr. Hinkley explained that Isle of Capri will bring employment opportunities for local people. Mr. Hinkley explained the company's relationship with employees and communities, including leadership program and benefit program. Mr. Hinkley explained Isle of Capri has locations in established and growing markets and utilizes proprietary customer database. Mr. Hinkley stated that the proposed site is so easy to get to. Mr. Hinkley showed the proposed site and buildings and their other buildings throughout the country and explained what is included in the project. Mr. Hinkley stated that the proposed project includes September 24, 2003 Page 2 NEW BUSINESS CONTINUED infrastructure in the $78 million range and will employ approximately 800 people with an annual payroll of $20 million, and state and local taxes of $2 million. Mr. Hinkley reviewed Isle of Capri Casino, Inc. mission statement. Bernie Goldstein presented his background and relationship to Iowa. Mr. Goldstein stated that in the `80s unemployment was high and there were for sale signs all over Iowa. Two Iowa legislators came up with the idea for riverboat casinos in Iowa and the riverboat legislation was passed. Mr. Goldstein stated that the average person spends $40 for an evening of entertainment, and it is a good social experience. Mayor Rooff stated that with the agreement the city agrees to work exclusively with the Black Hawk County Gaming Association to obtain and maintain a license for gaming in Black Hawk County. The agreement states that the Black Hawk County Gaming Association will allocate annually at least 50 percent of the total revenue derived from gaming operations to Black Hawk County or the municipal corporations in Black Hawk County for property tax relief. Mayor Rooff explained that the agreement is contingent on the Black Hawk County Gaming Association obtaining a gaming license within two years of the date of the agreement and is contingent upon voters approving the October 7, 2003 referendum for riverboat gambling. Hurley/Jordan that "Resolution approving Gaming Development Agreement between Black Hawk County Gaming Association and the City of Waterloo", be adopted. Prior to a vote on the above motion, the following comments were heard. Mr. Hoth reported that the agreement with the Black Hawk County Gaming Association and Isle of Capri Casinos, Inc. gives a percent of adjusted gross revenue to the non-profit organization and one-half percent goes for property tax relief, quality of life and charitable institutions. The proceeds will be evenly distributed throughout Black Hawk County. Mr. Hoth stated that State Law does not allow municipalities to hold a gaming license. Mayor Rooff stated that the host city gets a certain amount. Mr. Hoth responded that the host city gets % percent of the revenue off the top and then the rest is distributed to the other entities and Black Hawk County. Mr. Hoth stated that we are talking about 50 percent of what the Black Hawk County Gaming Association receives. Councilperson Welper asked when does the two year start and when will the riverboat open. Mr. Hoth responded that the two year agreement starts on the day of signing the agreement. Mr. Hinkley stated that construction of the riverboat casino takes about 15 months and all of it is subject to the referendum vote and approving of the Iowa Gaming Commission. Councilperson Getty stated he is a member of the National Cattle Congress Board, and they cannot talk about gambling because of the agreement with the Mesquakee Indians. Mr. Fulton read subsection 10c of 99F.7, Licenses, Terms and Conditions - Revocations, which explained that if a licensee of a pari- mutuel racetrack who held a valid license issued under Chapter 99D as of January 1, 1994, requests a license to operate gambling games, the Board of Supervisors shall submit to the county electorate a proposition to approve or disapprove the operation of the gaming games at pari-mutuel racetracks at a special election at the earliest possible date. If the operation of gambling games at the pari-mutuel racetrack is not approved by a majority of the voters, the commission shall not issue a license to operate gambling games at the racetrack. Mayor Rooff asked if the referendum is approved by the voters for a racetrack at the dog track, will they then have a license. Mr. Fulton responded that Subsection 4b of Section 96.4, Requirements of applicants—fee-penalty, states that the commission shall authorize the licensees of pari-mutuel dog racetracks located in Dubuque County and Black Hawk County to conduct gambling games if the licensees schedule at least 130 performances of 12 live races each day during a season of 25 weeks. Councilperson Clark asked if there is any conflict with the agreement with Black Hawk County Gaming Association if the Greyhound Parks reopens. Mr. Fulton responded that the exclusive agreement is only with the city. Councilperson Getty stated that if another gaming company came in and we started to run and wanted to build hotels, this agreement does not allow the city to work with another company or to give tax incentives. Mr. Fulton responded this operation does not involve any incentives, but involves the Bertches and Is1111 f Capri. • September 24, 2003 • • NEW BUSINESS CONTINUED Page 3 Councilperson Hurley asked Isle of Capri to explain the jobs that will be part of this project. Mr. Hinkley responded that they will have an annual payroll of about $20 million, with 800 jobs or the equivalent of 700 full time jobs. The average salary is $30,000 per year. The company has a ratio of six to one managers, with the professional positions earning between $25,000 to $100,000 per year. Councilperson Hurley asked if property taxes can be applied to the boat. Mayor Rooff responded that has not been determined, but there will be the 1 percent local option sales tax, hotel/motel taxes, and it will create 1,000 construction jobs, with most of the construction work to be performed by local people. Councilperson Clark asked if Mr. Hoth and Mr. Fulton will benefit financially from this agreement. Mr. Hoth responded absolutely not, and that the non- profit organization will probably hire an Executive Director, but no board member will receive any compensation. Councilperson Clark stated there is no guarantee the Iowa Gaming Association will issue more gaming licenses. Representative Don Shultz stated he believes there could be three to five more licenses issued, and it will very likely happen in the next year. Representative Shultz stated that a project like this could bring recreational opportunities to this area, and he will encourage the Gaming Association to issue this license. Councilperson Welper asked if Isle of Capri will build a hotel. Mr. Hinkley responded that depends on what the market will bear and oftentimes they help other hotels/motels. Mr. Goldstein stated that in Bettendorf they have found $1 million coming in because of the hotel and gaming, and they would expect that to happen here. Wallace Sulentic stated for the past year, there have been a number of groups discussing gambling sites, and they have never heard one word about Isle of Capri. Mr. Sulentic stated they are concerned if the council approves this agreement to give exclusivity to the Black Hawk County Gaming Association a number of people will be concerned. Mr. Sulentic stated he feels there should be town hall meetings to discuss this agreement, that the Isle of Capri may be the best choice, but this should be presented at a town hall meeting. Mr. Sulentic stated he does not like the idea of the council ramming this in so rapidly. Mr. Sulentic stated he wants the referendum to pass and does not want to upset the referendum. Bob Molinaro stated he was upset that they were precluded from any discussion on the exclusive contract with the Black Hawk County Gaming Association. The council members have a copy of the agreement, but none of them have seen it. Mr. Molinaro stated there have been meetings and the City Attorney has been involved, but questioned why the agreement was not disclosed to them and the public. Mr. Molinaro stated he does not believe there should be exclusivity for one company, and he opposes the council approving this agreement. Mayor Rooff explained that he talked to the Iowa Gaming Association yesterday and discussed with them that they did not want to preclude the dog track license. Mayor Rooff stated he has been assured it does not matter what the agreement is, the Iowa Gaming Association will make that decision. Rick Penn commended everyone for all their work and stated this is an exciting time for everyone. Mr. Penn stated he supports the referendum, but he is concerned in making sure if we bring gambling to Waterloo we do it in a way the community will support and is in the best interest for the community. Mr. Penn stated that one of the council's goals is to revitalize downtown, and he feels if we go through this effort the boat should be put on the Cedar River downtown, and this should be more of a public process. Mr. Penn stated he is surprised the resolution is to give exclusivity to Isle of Capri. Donna Nelson stated that if we do gambling, lets do it for more than property tax. Ms. Nelson explained her reasons for putting the riverboat downtown, including the Vanderwalle Plan, occupancy of current hotels/motels, dredging for the riverboat, the National Cattle Congress, loss of crop land, and the buses leading to downtown. Ms. Nelson asked the council to remember we are in competition with other Iowa communities, and that the Iowa Gaming Commission is looking for something that would bolster the economy of the entire area. Ms. Nelson stated that the Greater Waterloo/Cedar Falls Foundation would be happy to be the non-profit organization to handle this. Mr. Hinkley reported that Isle of Capri visited many locations and were shown all the sites suggested. Ms. Nelson stated they were called about Isle of Capri and not the other companies and stated so much was done in secrecy. September 24, 2003 Page 4 NEW BUSINESS CONTINUED Mr. Hinkley responded that Isle of Capri picked the site because of the thoroughfares, potential for growth, accessible parking, easy entrance and exit of facility and then include Lost Island and the Bertches future plans. Mr. Penn stated that Isle of Capri has selected the site best for them, and we should not look at what is best for Isle of Capri but what is best for the City of Waterloo, and that is what we have been looking at for the past five years. Councilperson Clark asked Mr. Hinkley if the city asked Isle of Capri to build downtown would they. Mr. Hinkley responded they would have to reconsider as they rely on drive-in traffic and need easy access to facilities and a lot of downtown areas are handicapped of these. Mr. Hinkley stated that ten years from now they could find out they need more hotel and parking spaces and they would run out of space downtown. Mr. Hinkley stated that Lost Island Park and the number of acres available makes the location extremely attractive. Mr. Hinkley stated Isle of Capri experience is that they know what is best location for them. George Warren stated that there are two riverboats in Iowa not owned or operated by casino owners, and the city has many non-profit organizations which are already established that could hold this license. Mr. Warren stated there are several gaming operations owned by communities. Mr. Warren asked why spend $50 million on the downtown if we are going to move 1 million people to the outskirts of our city. Mr. Warren stated he believes the proposed boat location near Lost Island Park will hurt the Ramada Inn and the Five Sullivan Brothers Convention Center. Mr. Warren stated that two riverboat cities own and operate their facilities and keep the money in their communities. Mr. Warren distributed copies of the Iowa Racing and Gaming Commission Riverboat Revenue Report and explained the dollar amounts. Mr. Warren distributed a copy of a map and a proposed site for the riverboat casino and explained the site by Soldiers and Sailors Park and its proximity to the river, convention center and parking ramps and parking lots. Mr. Warren stated his proposed site is connected to the Ramada Inn and Convention Center by a sky walk and two more layers could be added to the parking ramp. Mr. Warren explained that downtown hotels are operating at 30 percent to 40 percent occupancy and are not profitable. Mr. Warren distributed a copy of figures he has compiled concerning the infrastructure near his proposed location and the dollar amounts attached to that infrastructure. Mr. Warren stated that the Iowa Gaming Commission does not require a certain depth for the water, has no definition for length of the cruise, just duration of the cruise. Mayor Rooff thanked Mr. Warren for his information. Mayor Rooff stated if it is the decision of the council to put the gaming location at the Water Park, who will do it downtown. Mr. Warren stated there are two boats and two casinos in Iowa that are city run operations, and he doesn't feel we need Isle of Capri. Mr. Warren asked the council to consider the city doing it and asked why add another layer of structure. Councilperson Getty explained that there was a meeting with the Bertches awhile ago and the Isle of Capri was not mentioned so he does not think the water park site was picked a long time ago. Councilperson Getty stated he is concerned that this will not slam the door for the National Cattle Congress. Councilperson Getty stated he was not happy with the exclusivity and that the council did not receive a copy of the agreement until 7:40 this morning. Mayor Rooff explained that the special council meeting was set for 7:30 a.m. because a press conference is being held at 9:00 a.m. on the Highway 21 emergency access road opening. Marty Dickey asked how much time has council members had to look at the document. Mayor Rooff responded that the agreement has been circulating for the past three or four days, and council members had an opportunity to look at the document on Monday. Mr. Dickey stated he is for gambling, but does not agree with the proposed site. Mr. Dickey stated the Water Park is family entertainment and gambling is adult entertainment and they don't really mix. Mr. Dickey stated he agrees with the suggestion that there be a town hall meeting to discuss this agreement. Mr. Dickey stated he feels the council should take more time before a decision is made and also look at the downtown, that there are still options to look at. Terry Poe-Buschkamp, Director of Main Street Waterloo, reported the Main Street Waterloo Board unanimously agreed to support gaming in the downtown to support the downtown goals. Ms. Buschkamp asked the council to look at the downtown. • • September 24, 2003 NEW BUSINESS CONTINUED Page 5 Councilperson Hurley stated he supports the downtown, Main Street Waterloo and all those organizations. Councilperson Hurley explained that he sits on the Master Plan Update Committee, and he does not remember any connection the downtown has to gambling, and Vanderwalle did not speak toward gambling. Councilperson Hurley stated he does not feel the site could be located near the bridges because the boat could not get under the bridges. The site could be located upstream or downtown. Councilperson Hurley stated that the council's goals and priorities were put together last January. Councilperson Hurley stated that downtown redevelopment does not hinge on gambling. Mr. Hoth explained there will be three agreements: one between the non-profit organization and the city, one between the non-profit organization and the gaming company, and one with the non-profit organization and the site owners. Mr. Hoth stated this all came together, there is competition throughout the state and some sense of urgency. Mr. Hinkley commented that there will be other communities seeking a limited number of licenses, and Isle of Capri feels this would be favorable to other projects, and it is important to get their project in early. Mr. Hinkley stated he is surprised that people think this is a secret project as they just wanted to get their proposal in early. Mr. Hinkley stated it is unprecedented for a project to be approved if it is not supported locally. Mr. Hinkley stated they think the earlier they have the city's support and the earlier they seek approval to develop, the better chance they will have. Ms. Nelson stated that downtown property owners helped to collect signatures for the referendum as they had a petition going for gambling downtown. Ms. Nelson stated that Mr. Hoth convinced the downtown property owners if we get into location and who would own the casino, the referendum probably would not pass. Ms. Nelson stated that she met with owners of the Isle of Capri and talked to Lorenzo Creighton, and this is important to downtown. Councilperson Greenwood stated he understands the importance of bundling the site and company, and that it gives us a better chance of passing the referendum. Mr. Hoth responded that some will be against gambling on moral grounds and location. Mr. Hoth stated they are not asking for any tax abatement from the city, and he thinks this is a great project for the city. Councilperson Clark stated it is critical that this community come together on some plan. Councilperson Clark stated when the proposed site and plan were first presented he thought it was a good plan and still believes it is a good plan, but there is the appearance that this was short notice. Councilperson Clark stated he is involved in the downtown as a owner of a downtown business and wants success for the downtown. Councilperson Clark stated that Mr. Dickey and Ms. Warren presented good ideals and valid opposition. Councilperson Clark stated there is speculation as to whether a riverboat can or can't be put downtown, and until we are told that it won't work downtown he will still favor the downtown for the gambling location. Councilperson Jordan stated he supports what is being voted on today. Councilperson Jordan stated some want to see the dog track reopened but the Indians can't even settle their own problems. Councilperson Jordan stated there is a proven track record with the Bertches, and he thanked Mr. Hoth and Mr. Fulton for the good work on a good plan. Councilperson Welper stated he appreciates all the work, but he doesn't understand why we can't have a prosperous downtown and gambling at another location. Following comments a vote was taken on the above motion with the following result. Ayes: Five. Nays: Clark, Getty. Resolution adopted and upon approval by Mayor assigned No. 2003-654. ADJOURNMENT 118899 - Jordan/Welper that the Council adjourn at 9:46 a.m. Ayes: Seven. Motion carried. Nancy kert City Clerk