The proposed Cedar Crossing Casino, a $250 million 160,000-square-foot entertainment and cultural arts complex on the site of the old Cooper’s Mill in Cedar Rapids, is shown in a rendering. (Courtesy of Peninsula Pacific Entertainment)
CEDAR RAPIDS — Despite moves by state lawmakers to block new casino licenses until 2024, local casino supporters have unveiled plans to build a $250 million 160,000-square-foot entertainment and cultural arts complex near downtown Cedar Rapids on the site of the now-demolished Cooper’s Mill . .
The Cedar Crossing Casino offering, exclusively provided by The Gazette, includes bars, restaurants, a 1,500-seat entertainment center and other locations on the west bank of the Cedar River, between Kingston Village and Time Check Park. Gaming believes the complex will set a new bar for Iowa casinos.
The project will also include flood protection to protect the structure from rising water levels.
The Cedar Rapids Development Group, comprised primarily of local investors, and the Lynn County Gaming Association, a non-profit organization that will donate a portion of proceeds to local non-profits, will jointly apply for a gaming license with the Iowa Racing and Gaming Commission after the state’s proposed moratorium on new licenses ends in June 2024.
The moratorium comes into force on June 1 after signing by the governor. Kim Reynolds, who said Friday she is reviewing the newly passed law with her staff.
Local investors, a gaming association and potential operator Peninsula Pacific Entertainment originally planned to share development plans after state regulators indicated they would set a deadline for applications for a Lynn County gaming license.
But that plan changed after Iowa lawmakers passed a moratorium without warning during the last 48 hours of the state legislative session last week.
“It’s time for the people of Cedar Rapid to understand what’s really at stake,” Mayor Tiffany O’Donnell said. “It’s certainly entertainment and convenience, it’s jobs, it’s economic development and it’s flood protection.
“That’s what the Legislature took from us.”
Jonathan Swain, president of Peninsula Pacific Entertainment, the city’s preferred casino operator, said the Cedar Crossing team’s commitment to Cedar Rapids and Lynn County “doesn’t waver one iota based on what happened last week.”
“Whatever the outcome, whether there is a veto or not, we will be close to Lynn County,” Swain said.
“We look forward to seeing this project eventually come to fruition and bring all the non-profit benefits, jobs and economic opportunities that Cedar Crossing brings. Whatever happens, we are ready for it, so go ahead.”
What’s on offer
The name Cedar Crossing is borrowed from the team’s 2017 proposal, which state regulators chose not to license, marking Cedar Rapids’ second unsuccessful attempt to open a casino since 2014.
“We love the Cedar Crossing name and we think that this continuity is important,” Swain said, adding that it showed the team’s commitment to building the Cedar Rapids casino – today or two years from now.
Swain said the project is designed to maximize revenue, 800 to 1,100 slot machines and 40 to 60 table games. But the key difference in this promotional offer is the level of investment in non-gaming components.
“This is really what will attract young audiences to the casinos of the future,” Swain said. “Looking forward to the next 10 years, we think this is a critical difference between what we are doing with this project and everything else that is in the state.”
Proposed site on F Avenue NW, formerly the location of the Best Western Cooper’s Mill Hotel until it was demolished after damage in the 2008 and 2016 floods. Now this place belongs to the city.
Years ago, when the land at First Street SW and First Avenue W was set aside for a casino, Swain said the site was not viable because it was not included in flood protection plans. According to him, now the city plans to introduce a system of dams.
The Cedar Crossing team promised that the structure would “provide critical flood protection infrastructure”, which Swain said would be a flood wall. Swain said there is no cost estimate yet as the project is still in the design phase.
“It’s a better location, better visibility, more space, a lot more creativity,” Swain said of the location, which is next to Interstate 380.
Mayor O’Donnell and Ann Parmley, president of the board of the Lynn County Gaming Association, said the casino would provide a major redevelopment opportunity on the river’s west bank.
“The venue and venues are terribly exciting,” said Parmley. “It’s just as much an entertainment center as a casino or gaming center, if not more, and that’s why I think people will be excited about it.”
The Cedar Crossing team touted the operator’s commitment to contribute 8 percent of annual net income from Cedar Crossing games to fund local non-profit organizations – the highest share of income in the state.
Iowa requires licensed casinos to set aside a minimum percentage of income to fund nonprofits.
The Cedar Crossing team estimates that this is approximately $5 million to $7 million per year.
Parmley said nonprofit leaders she spoke to are “equally frustrated” at the potential delay in casino construction – if government regulators ever issue a license – but the team is moving forward.
Parmley said that as part of the license application process, the gaming association will design the grant application process in a way that is open to all nonprofits in the community to remain flexible in the event of the next flood, hurricane or other natural disaster.
There has been debate among legislators over the adoption of the moratorium, suggesting that another casino will gobble up the casino’s current revenue and take the money to split it among local nonprofits.
Parmley disagreed with the sentiment and said the Cedar Rapids casino would add additional state and county revenue to distribute even more money to nonprofits.
“Then our non-profit community gets funding that doesn’t exist today to help fill the gaps in work, new programs serve more people,” Parmley said.
The Cedar Crossing team has also signed a MoU with Cedar Rapids / Iowa City Building and Construction Trades Council President Mike Sadler to ensure that local labor is used in the construction of the casino if a license is issued by in-house patrons.
The agreement outlined the intention of the investor group to enter into a labor agreement for the project once the plans were finalized.
“For ten years, this team has promised to build a gaming facility in Cedar Rapids,” Sadler said in a statement. “We all support Cedar Crossing and the local unions know this will be the best casino they can bring here and we are proud to have it built by local merchants and traders.”
After Peninsula Pacific Entertainment closed a $2.5 billion deal in March to sell most of its remaining assets to Churchill Downs Inc., an online racing, betting and gaming company based on the iconic Kentucky Derby, Swain said the casino Lynn County will become its ‘cornerstone gaming property’. This transaction did not involve Cedar Rapids Development Group.
Peninsula Pacific Entertainment has built several casinos in the United States, including three in Iowa – the Diamond Jo in Dubuque, the Diamond Jo Casino in Worth County, and the Hard Rock Hotel and Casino in Sioux City.
The developer declined to share details about beautification partners, but said the proposed locations are associated with big names, including professional golfer and Cedar Rapids native Zack Johnson.
The concept of Zach Johnson’s Clubhouse is still in development, but overall it will be a bookmaker and tavern arcade with “a wide selection of classic and modern games, a fully equipped kitchen and a bar.”
The Clubhouse “will be a great place to watch a game with friends, eat delicious food and even play your own games,” Johnson said in a statement. “But most importantly, I’m proud to be part of a project that will mean so much to society through job creation, downtown revitalization, and its commitment to nonprofits in Cedar Rapids.”
The 1,500-seat indoor venue is expected to attract regional and national artists to perform rock, pop, country and hip-hop in Cedar Rapids.
In addition, casino patrons are promising an “extraordinary” celebrity chef who will serve signature dishes to the table, as well as some newly created “homegrown” dishes from Iowa exclusively for Cedar Crossing. They promise signature cocktails and “a culinary experience that Cedar Rapids will be proud to add to its must-try list.”
Some local stakeholders have quietly raised concerns that the casino is absorbing some of the traffic of local businesses. Members of the Cedar Crossing team look forward to more partnerships with local restaurateurs in the future as they unveil the rest of the project, Swain said.
“The amount of tourists that will come to this place will benefit everyone, including the city hotel (DoubleTree by Hilton) and all restaurants in the city center, as well as all other offers in Cedar Rapids,” Swain said.
As Iowa’s gambling revenues face a threat from casinos in Nebraska and Illinois, O’Donnell said the state needs competition, and this “world-class entertainment venue” provides that.
O’Donnell added that banning Cedar Rapids from obtaining a casino license could give the impression that the state is protecting a competitor that is expanding business outside of the states.
Lynn County casino opponent Dan Kael, CEO of Elite Casino Resorts, operator of Riverside casinos, sent tens of thousands of dollars to Republican leadership and the Senate. Robi Smith, R-Davenport, author of the moratorium amendment.
This casino has something for everyone to enjoy, as well as local connections that will complement the existing downtown business, she said.
“This project will become the gold standard for casinos not only in this state, but in the region,” O’Donnell said.
As of now, discussion of the Lynn County casinos is on the agenda of the Iowa Horse Racing and Gaming Commission meeting on June 2 in Emmetsburg.
In March, the group said it would accept applications for the Lynn County gambling establishment after voters again held a referendum in November that allows gambling interests to receive a perpetual license.
The government moratorium may be a hurdle, but Swain said the development team has been developing the concept for the casino for the better part of a decade, so two years in the flow chart is just around the corner.
“For what we’re going to do, and the planning, design and development of the project, the timeline could be perfect for what we’d like to see, which is the construction of the project in 2024,” Swain said. “Our responsibility is to keep the momentum going.”
O’Donnell, who asked for the governor. Reynolds did not sign the bill, which expressed some hope that the release of site plans might tilt the state in favor of Cedar Rapids.
“I hope that any additional information we can provide to them to reinforce our strong desire to own this Cedar Rapids casino will help them in their decision making process,” O’Donnell said.
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