Linn County's voters might face gambling points once more

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CEDAR RAPIDS – If another try is planned for a casino in Iowa's second largest city, the first thing local authorities will need to do is decide when to ask Linn County's voters to renew their gambling permits.

Local officials told The Gazette they are rethinking when to vote on the gambling referendum, which Linn County voters overwhelmingly backed in 2013, to keep it alive before it runs out this year.

It would be a critical vote for the region's casino prospects – approving the measure on a second consecutive attempt would permanently approve licensed gambling within the county.

Then the only remaining hurdle for Cedar Rapids – a big one – would be to obtain a license from state regulators who turned down applications for casinos in the city in 2014 and 2017.

The Iowa Racing and Gaming Commission cited a saturated market and “cannibalization” of revenue from existing Riverside and Waterloo casinos when they opposed a license to Cedar Rapids.

"It's the last major city in Iowa that doesn't have any gambling," said Brad Hart, Cedar Rapids mayor. "I think there really is a market here that someone can get it right."

Cedar Rapids still has a Memorandum of Understanding with the Cedar Rapids Development Group until October 9, 2029, which is composed of many mainly local investors. As part of the 10-year contract, the group pays the city $ 75,000 per year, so the city would only support the group with a casino license application.

To date, the group has paid Cedar Rapids $ 300,000, according to Casey Drew, director of urban finance.

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The Gazette was unable to reach Steve Gray and Jonathan Swain, who were part of this original investor group, for comment. However, the group was listed as a new member on the Cedar Rapids Metro Economic Alliance website in January, indicating that investor activities have resumed.

"The local investors are and will be involved as something evolves, and that's a plus," said Hart.

The agreement with the city is not tied to a specific location. Hart said no decisions have been made on any potential site if an application is re-filed.

However, the originally proposed location is out of the question. The 8-acre site on First Avenue and First Street SW that was earmarked for a casino prior to the failed attempts is now a $ 90 million to $ 100 million proposal for a Big Grove Brewery, a family fun Center and other entertainment dedicated.

Tax reconciliation difficult

The Linn district supervisory authority has several options as to when a vote on the renewal of the referendum on games of chance should take place.

The question could be put on the November 2nd ballot along with candidates from city and school authorities. Five of the nine seats of Cedar Rapids City Council, including the Mayor, will take part in this vote.

Alternatively, the county regulators could opt for a special September 7 election, said Rebecca Stonawski, the county's deputy electoral commissioner. The Iowa Code dictates when special elections can be held for an election. She said the cost of a major special election would likely be between $ 250,000 and $ 400,000.

According to a memo Stonawski sent to regulators, the county’s elected officials must also decide whether to put the gambling referendum on the ballot, asking whether to extend sales taxes on local options.

Regulators set the date for a 1-cent VAT extension for unincorporated areas in Linn County. However, the five cities in the metropolitan area – Cedar Rapids, Marion, Hiawatha, Robins, and Fairfax – can vote at the same time with the county or separately.

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If that is not on the ballot in September or November, Stonawski's memo states that the other possible dates for 2022 are March 8 or September 13.

For Cedar Rapids, that means voters could soon be asked if they support the extension of the 1-cent sales tax that is used to fund the Paving for Progress road repair and construction program. The tax applies until fiscal year 2024, the fiscal year that ends on June 30, 2024.

Council members will discuss the ideal time to include both action for Cedar Rapids and the best structuring of electoral initiatives in the vote, Hart said. After further talks between city officials, Hart said he would consult the leaders of the other four cities.

"That is definitely part of the conversation, whether or not it makes sense for both of them to be on the same ballot," Hart said. “There is likely to be some effort to educate the public on each of these issues, and how long do these awareness campaigns last? That's all we need to think through to make a decision. "

Hart said he wanted more information about the types of voters who turn out to be for one measure compared to another – whether the common theme on the ballot would affect the other's passage.

"Extending the sales tax on local options is the more critical issue for me, so what makes it more likely that this will be successful is what I want to push forward," said Hart.

Former district chief Brent Oleson, who recently resigned and is now the district's deputy director of politics and communications, said he is investigating for regulators the potential impact of the measures that are summarized on the same ballot.

"It's all these different groups that are talking about different referendums, so they don't want to conflict with each other. I think it's just the beginning when everyone starts planning what they want to do," said Oleson.

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However, he is aware that it may be beneficial for Cedar Rapids to vote on the issue of extending the sales tax for local options sooner rather than shortly before the question expires.

"These road construction projects could take several years. For the sake of planning and anything else, put them well ahead of the voters so you can plan those dollars," Oleson said.

Don't bet completely yet

The process of the gambling referendum is part of the puzzle of Cedar Rapids' prospects of actually landing a casino.

The officials are also monitoring the composition of the five-member board that issues gambling licenses. The term of the only remaining commissioner who has voted against licensing Cedar Rapids, Kristine Kramer of New Hampton, expires on April 30th. Other opponents of the State Commission, Jeff Lamberti from Ankeny and Carl Heinrich from Council Bluffs, previously drove out.

But also Richard Arnold from Russell and Dolores Mertz from Algona, who both favored a Cedar Rapids license.

Pennie Gonseth-Cheers, a Democrat from Afton, is the only other commissioner whose three-year term expires this year.

Governor Kim Reynolds has not announced any new picks or reappointments for the panel.

After the legalization of sports betting in Iowa in 2019, some thought it could boost casino revenue and potentially decrease market saturation, opening up the possibility that Cedar Rapids could finally get a license.

The commission's administrator Brian Ohorilko said market studies were being conducted or updated in the past when a license application was submitted, but it would be up to the commissioners to take this course of action.

"There is currently no application," said Ohorilko. "There really was no discussion of Linn County or a new gaming license for that matter. It would be a situation where the commission would have to have a discussion and make a decision on how to proceed."

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Linn County has yet to have a champion proposing a casino or leading the campaign to get another referendum.

But when that number comes up, it could spark another costly and controversial campaign. When voters last passed the referendum in March 2013 by a margin of 22 points (61 to 39 percent), the vitriol campaign cost $ 2.2 million.

Karlyn Ollendick, Chief Operating Officer of Elite Casino Resorts, which operates Riverside Casino and Resort south of Iowa City and whose managing director largely funded the opposition campaign, said in a statement: “The Cedar Rapids market is well served and we all appreciate our greatness Employees and customers in Linn County. … With regard to the possibility of a new referendum, little has changed in the demographics of this market since the last study and review by the (state commission). "

Notes: (319) 398-8494; [email protected]