28
Dec
2004
Isle of Capri (IOC) casino officials recently rolled out a public-relations campaign consisting of two "public courtesy meetings" featuring multimedia presentations, and face-to-face presentations to the editorial boards of the River Cities' Reader and the Quad-City Times. The big picture IOC would have the public believe is that it is investing $43 million of its own money for a new 10-story, 180-room riverfront hotel, including a five-story parking garage, that will return a whopping $207 million over the next 10 years to the citizens of Davenport, Scott County, and Iowa.
Per usual, the "devil is in the details," and supporters of the waterfront giveaway are betting on the public quietly nodding at the pretty pictures of the proposed site plan on the nightly news, predictably accepting the financial sound bites as truth and dutifully going back to their daily routines. If the media and city government do not ask relevant questions and the public does not demand accountability, then we risk Davenport's quality of life and riverfront heritage for generations to come.
Fundamental Premise is a Myth
A fundamental myth behind the casino-hotel proposal to expand gambling in Scott County, with the assistance of taxpayers no less, is that what is good for IOC stockholders is also good for Davenport taxpayers and the greater downtown economy.
Nothing could be further from the truth.
The often cited, but never substantiated, benefits to the community of a new riverfront hotel include "bringing all these people to our downtown and waterfront," "taking advantage of the synergy of River Renaissance," "capitalizing on the $90 million investment IOC has already made," and so on.
It is truly an urban myth that any of the Quad Cities' riverfront casinos provide an economic advantage to the local downtown economies. This is not to say that, from a kickback standpoint, the casinos have not made a meaningful contribution. City coffers enjoy a boost from additional tax revenues generated; DavenportOne accepts "payment in lieu of taxes" that funnel into downtown Davenport's Self-Supporting Municipal Improvement District fund; the state enjoys its sizable cut; and of course dozens of local not-for-profit organizations, large and small, have been the recipients of millions via grants from the Riverboat Development Authority and Scott County Regional Authority.
But ask many restaurateurs, coffee-shop owners, and retailers in either downtown Davenport or Rock Island, "Do you see much business from gamblers who visit the casino?" and you will learn how little, if any, financial impact casino guests have on downtown businesses. One would think that a restaurant microbrewery, such as Front Street Brewery, would look forward to a $43-million dollar expansion of gambling only one block away. Turns out Front Street doesn't rely on patrons of the gambling boat as part of its clientele and, according to managing partner Mary Gabel, "We don't expect any increased business from an expanded casino hotel. Their people don't leave the boat and they don't visit our bar or restaurant."
Therefore, the myth expands in tandem with the proposed expansion of the Rhythm City Casino operations at Davenport's best waterfront view-shed: increased traffic to the casino/hotel equates to increased visitors to our downtown shops, museums, and restaurants. Not only has this not been the case over the past 15 years, but any IOC projections of increased traffic in the future are purely guesswork with no scientific basis.
"We Were Asked to Move"
IOC would have the public believe that the idea for coming forward with a proposal for a hotel facility between Brady and Perry streets is the result of an initial request from city officials to move the casino's operations to another location. Not quite.
Last year, when the casino came to the city with its request to build a hotel at its current location, city officials stated that they would prefer using this opportunity to move the casino operation and enhance the LeClaire Park waterfront, reclaiming it for green space. Only then did City Administrator Craig Malin indicate a preference for the casino choosing a site other than its current location, outlining three options for where it preferred the casino relocate with a hotel facility, and to what degree it would be willing to assist in financing. The nuance getting lost in translation is that the first action step was the casino coming to the city to build a new hotel, not the city asking the casino to move its operations. In other words, the request by the city was to move the proposed site for the hotel.
On April 2, 2003, Malin drafted a letter to Nancy Donovan, IOC's regional vice president, outlining three locations for consideration in order of preference; the foot of Perry Street was last. According to the letter, the city's first choice was atop the Rhythm Courtyard adjacent to the Redstone Building and connected to the planned sky-bridge entrance. There was even mention of the casino partnering on the restaurants and meeting space within the River Music Experience. The letter states: "Given the shared advantages of this option, the IOC could expect substantial TIF support." Option two stated: "The city has an interest in exploring the relocation of the casino with the construction of an adjacent hotel to anchor Centennial Park area redevelopment. This arrangement would be similar to the site and operation of the Bettendorf facility (with a fuller palette of nearby attractions) and the Isle of Capri could expect TIF support." The third option discussed in the letter talked of a "slightly relocated casino (conceptually near the end of the sky bridge)" and went on to state: "It is important for the Isle of Capri to recognize that this option would require considerable public input and firm city control of site and architectural matters. Given that this option is, at least conceptually, of substantial benefit to the Isle of Capri with comparatively reduced benefit to the city, the Isle of Capri should not expect substantial City assistance in financing, if at all." (Emphasis added.)
Project Will Create Unique Destination for Iowa
Should this project move forward, Ryan Companies will be the builders. In fact, Ryan representatives helped facilitate the "public courtesy reviews" last week. Davenport taxpayers might remember Ryan Companies as the firm, in association with DavenportOne, that successfully convinced the City of Davenport to pass a 20-year, $2.9-million TIF to build the new Mississippi Plaza office building at Harrison and Second streets. Ryan was also successful in getting a 15-year TIF for a warehousing project at the Eastern Iowa Industrial Center, owned in part by the city, DavenportOne, and MidAmerican Energy.
Last week, Ryan Midwest President Jeff Smith repeatedly referred to the casino-hotel project as creating "a white hot fire" out of the "small brush fires" we now have in downtown Davenport. It's fascinating how downtown Davenport's fire can't quite get to "white hot" without the next great publicly funded project.
First it was the "super block" with the MidAmerican Energy building (when after completion the majority of jobs moved to Omaha); then it was two publicly funded parking ramps (which are currently losing money and being underutilized); next it was the $5-million River Renaissance referendum (remember "Say yes!"); and most recently the new Class A office building mentioned above. All were touted as the next big thing that downtown needed to remain competitive. Amidst all this is our $113-million River Renaissance, with the construction of a new $35-million Figge Art Museum; the $9-million River Music Experience; a $6.8-million sky bridge scheduled to be open by mid-February; $13 million in improvements to and renovation of John O'Donnell Stadium; and a renovation and expansion for the Adler/RiverCenter to begin early next year.
But IOC partners see these enhancements as "brush fires" that aren't quite burning hot enough. Further, the IOC folks would have us believe that a new riverfront casino/hotel, not all of the amenities outlined above, will make Davenport a unique destination for Iowa.
Does this mean that a new riverfront hotel/casino will mean more people using our publicly funded parking ramps and more people visiting our publicly funded art museum, music museum, and theatre? Will a new casino/hotel mean more businesses moving into our empty office spaces downtown, too? So far no empirical or anecdotal evidence backs this audacious claim.
Why This Location?
"It makes sense" is the IOC's less-than-compelling answer to the question of why it should be allowed to build a 10-story hotel with a five-story parking garage between Perry and Brady streets just south of the railroad tracks. There is no basis for this claim, even with two financial-impact studies done on IOC's behalf.
Investment in this Location: IOC cites the $90-million investment it's made in Davenport and the Rhythm City Casino property as a primary reason to stay very close to where it is today. But when pressed about that investment, IOC officials admitted that the majority of it, $58 million, was for the operator's license they bought from the President Casino. Except for the value of the lighted porte-cochere carport, the remainder of the IOC's investment is in the floating guest-services barge and the casino boat itself. In other words, the majority of the $90-million investment is not within the current site and almost all of it is completely movable, as easily relocated six blocks downstream as one block upstream.
Other Options Not Economically Feasible (e.g., Centennial Park, River Center): During a presentation to the Reader last week, IOC officials claimed that there has never been any serious discussion with the city about a new hotel/casino in any location other then the proposed site at the Brady Street river's edge. Centennial Park was no good because of "remediation" costs associated with contaminated soil. When asked if there were any environmental studies conducted by the city or IOC to confirm that concern, the answer was "no." The concept of a hotel at Rhythm Courtyard "just wouldn't work" and was not feasible physically.
Tearing down the Black Hawk Hotel and building new there was not going to work, either - too costly - but stats on how much more costly were also not forthcoming. Further, Mary Ellen Chamberlin of the Riverboat Development Authority pointed out that the riverfront site is necessary because IOC wants to be included and participate in the "circle of amenities" that surrounds the proposed location. When asked why this "circle of amenities" did not include the newly renovated John O'Donnell stadium and the QC Sports Center, less than six blocks away, she claimed these amenities were more family-oriented and not suited to a casino presence. Does this mean that the Figge Art Museum, the River Music Experience, and the Adler Theatre are not family-oriented? What makes these less family-oriented than baseball and other sports?
The Isle of Capri casino in Bettendorf is the number-one visited destination in the Quad Cities, with 1.8 million visitors each year. Considering that this facility has no "circle of amenities" and is surrounded only by a long string of parking lots, does it not follow that a casino hotel expansion would prosper no matter where it was built?
IOC officials were quick to point out that the Bettendorf Casino benefits from 75,000 cars per day crossing the I-74 bridge, and that many people going to the Mark for shows will visit their casino. It does beg the question: Wouldn't the Centennial Bridge traffic overlooking John O'Donnell and Centennial Park warrant moving downstream?
No, according to Chamberlin. The Centennial traffic is too local, while the I-74 traffic is more transient. What stats back up such claims? If this were true, then how will the Rhythm City Casino achieve a higher mix of non-locals at its new casino/hotel? Currently 80 percent of its visitors are considered local. With nothing but local traffic around it, how will the casino achieve its growth goals of 2.1 million new visitors?
Via target marketing to the Chicago area, it is explained. Then if it is target marketing, not proximity to an interstate highway, that will attract new customers, won't those guests visit regardless of a circle of amenities?
No documentation has been offered by the IOC that illustrates how or why this project is not economically feasible at any other location. In fact, the IOC's and the city's own study by HVS of Chicago to forecast growth was explicitly not site-specific.
All This for $43 Million?
"All This = $43.1 Million" is the title of a summarizing slide that the public is shown after a sweeping animation fly-by of the LeClaire park waterfront, complete with dozens of trees, landscaping, a public-square promenade adjacent to the sky bridge, an eagle viewing area, and synchronized water fountains creating a canopy over pedestrians' heads.
Truth is, the $43.1 million does not include any of the items named above - those would be left up to the city to pursue with the funds from its increased tax revenues. When asked about the potential cost of these additional features, City Administrator Malin ball-parked the figure at $10 million. Why does the IOC include such features and landscaping as part of the entire project when the proposed financing does not in fact pay for them? Why does a proposed project not include the costs associated with renovating or demolishing the Black Hawk Hotel? The IOC would like to gift the hotel to the City, as part of this package. Last week, Donovan estimated that renovation costs for the historic hotel would exceed $5 million. And if the revenue, taxes, and rebate forecasts are all based on a 10-year plan, as IOC has stated, why is the public's financing for the parking garage being placed on a 20-year schedule? How can the public really know exactly what they are being asked to finance?
Self-Funded?
See Jeff Ignatius' piece outlining IOC's financing proposal. Self-funding might be one way to look at this, but risk-free it is not. Heaven forbid that something would happen to the gambling industry; or that IOC is purchased by an even larger gaming company that wishes to move the operation elsewhere, or worse, decides to stay and proves an even poorer steward of our natural resources; or that citizens of Iowa decide at a later date to disallow gambling. Let's keep in mind that these revenue and growth statistics are based on forecasts, predictions, and educated guesses. Banks loan money every day based on such math, but why should the citizens of Davenport become the casino's bank? "Because the city can borrow money cheaper via public bonds" is the answer. Wouldn't we all like that opportunity?
And whether or not these forecasts take into consideration that two other casinos are simultaneously relying on similar growth in the market (Isle in Bettendorf and Casino Rock Island) is yet to be seen. When asked about this market-growth factor, audience members were told by Donovan, "The future is looking very bright for the gaming industry."
Just how bright is up for debate. In April this year the Isle of Capri Casino's stock dropped 11 percent when it announced that expansion projects in Louisiana, the Bahamas, and England were not as profitable as predicted. In March, the publicly traded company filed a report stating it was highly leveraged and might have challenges obtaining new debt or equity funding on good terms. In November, IOC reported second fiscal quarter "net income of $0.5 million or $0.01 per diluted common share compared to net income of $10.7 million or $0.35 per diluted common share for the same quarter last year." Its stock is trading at higher levels than it did in April, but the company is simultaneously pursuing expansion projects in other markets, such as a $169-million new casino/hotel/parking project in Biloxi scheduled to open a year from now. One has to wonder how much of these acquisitions and expansions in other markets is driving the IOC's desire to have the taxpayers of Davenport act as a bank for nearly 30 percent of this project.
Sidebar: 5 Myths, 5 Answers
Five major myths help shape the many questions taxpayers and council-council members should be getting straight answers to:
1) If you don't support the IOC's proposal as is, then you don't support downtown or the IOC at all. It's not that black-and-white. Citizens deserve input and consideration regarding our number-one riverfront view-shed, and have been completely marginalized by the IOC's planning and one-on-one lobbying of city officials.
2) The project is only profitable at the proposed riverfront site. Existing studies say otherwise, and no data exists about alternative sites suggested by the city to compare.
3) IOC's investment of $90 million in the casino makes relocating too costly. Most of the operation's investment is in the license and two floating structures. How much more can it be to float downstream six blocks? No stats have been offered.
4) The city asked the boat to move. Not quite. The casino came to the city asking to build a hotel where it operates now.
5) The increase in dollars to the community makes the project worth financing. See this story. Is $1.88 million per year back to the community really worth losing our number-one riverfront view?
Per usual, the "devil is in the details," and supporters of the waterfront giveaway are betting on the public quietly nodding at the pretty pictures of the proposed site plan on the nightly news, predictably accepting the financial sound bites as truth and dutifully going back to their daily routines. If the media and city government do not ask relevant questions and the public does not demand accountability, then we risk Davenport's quality of life and riverfront heritage for generations to come.
Fundamental Premise is a Myth
A fundamental myth behind the casino-hotel proposal to expand gambling in Scott County, with the assistance of taxpayers no less, is that what is good for IOC stockholders is also good for Davenport taxpayers and the greater downtown economy.
Nothing could be further from the truth.
The often cited, but never substantiated, benefits to the community of a new riverfront hotel include "bringing all these people to our downtown and waterfront," "taking advantage of the synergy of River Renaissance," "capitalizing on the $90 million investment IOC has already made," and so on.
It is truly an urban myth that any of the Quad Cities' riverfront casinos provide an economic advantage to the local downtown economies. This is not to say that, from a kickback standpoint, the casinos have not made a meaningful contribution. City coffers enjoy a boost from additional tax revenues generated; DavenportOne accepts "payment in lieu of taxes" that funnel into downtown Davenport's Self-Supporting Municipal Improvement District fund; the state enjoys its sizable cut; and of course dozens of local not-for-profit organizations, large and small, have been the recipients of millions via grants from the Riverboat Development Authority and Scott County Regional Authority.
But ask many restaurateurs, coffee-shop owners, and retailers in either downtown Davenport or Rock Island, "Do you see much business from gamblers who visit the casino?" and you will learn how little, if any, financial impact casino guests have on downtown businesses. One would think that a restaurant microbrewery, such as Front Street Brewery, would look forward to a $43-million dollar expansion of gambling only one block away. Turns out Front Street doesn't rely on patrons of the gambling boat as part of its clientele and, according to managing partner Mary Gabel, "We don't expect any increased business from an expanded casino hotel. Their people don't leave the boat and they don't visit our bar or restaurant."
Therefore, the myth expands in tandem with the proposed expansion of the Rhythm City Casino operations at Davenport's best waterfront view-shed: increased traffic to the casino/hotel equates to increased visitors to our downtown shops, museums, and restaurants. Not only has this not been the case over the past 15 years, but any IOC projections of increased traffic in the future are purely guesswork with no scientific basis.
"We Were Asked to Move"
IOC would have the public believe that the idea for coming forward with a proposal for a hotel facility between Brady and Perry streets is the result of an initial request from city officials to move the casino's operations to another location. Not quite.
Last year, when the casino came to the city with its request to build a hotel at its current location, city officials stated that they would prefer using this opportunity to move the casino operation and enhance the LeClaire Park waterfront, reclaiming it for green space. Only then did City Administrator Craig Malin indicate a preference for the casino choosing a site other than its current location, outlining three options for where it preferred the casino relocate with a hotel facility, and to what degree it would be willing to assist in financing. The nuance getting lost in translation is that the first action step was the casino coming to the city to build a new hotel, not the city asking the casino to move its operations. In other words, the request by the city was to move the proposed site for the hotel.
On April 2, 2003, Malin drafted a letter to Nancy Donovan, IOC's regional vice president, outlining three locations for consideration in order of preference; the foot of Perry Street was last. According to the letter, the city's first choice was atop the Rhythm Courtyard adjacent to the Redstone Building and connected to the planned sky-bridge entrance. There was even mention of the casino partnering on the restaurants and meeting space within the River Music Experience. The letter states: "Given the shared advantages of this option, the IOC could expect substantial TIF support." Option two stated: "The city has an interest in exploring the relocation of the casino with the construction of an adjacent hotel to anchor Centennial Park area redevelopment. This arrangement would be similar to the site and operation of the Bettendorf facility (with a fuller palette of nearby attractions) and the Isle of Capri could expect TIF support." The third option discussed in the letter talked of a "slightly relocated casino (conceptually near the end of the sky bridge)" and went on to state: "It is important for the Isle of Capri to recognize that this option would require considerable public input and firm city control of site and architectural matters. Given that this option is, at least conceptually, of substantial benefit to the Isle of Capri with comparatively reduced benefit to the city, the Isle of Capri should not expect substantial City assistance in financing, if at all." (Emphasis added.)
Project Will Create Unique Destination for Iowa
Should this project move forward, Ryan Companies will be the builders. In fact, Ryan representatives helped facilitate the "public courtesy reviews" last week. Davenport taxpayers might remember Ryan Companies as the firm, in association with DavenportOne, that successfully convinced the City of Davenport to pass a 20-year, $2.9-million TIF to build the new Mississippi Plaza office building at Harrison and Second streets. Ryan was also successful in getting a 15-year TIF for a warehousing project at the Eastern Iowa Industrial Center, owned in part by the city, DavenportOne, and MidAmerican Energy.
Last week, Ryan Midwest President Jeff Smith repeatedly referred to the casino-hotel project as creating "a white hot fire" out of the "small brush fires" we now have in downtown Davenport. It's fascinating how downtown Davenport's fire can't quite get to "white hot" without the next great publicly funded project.
First it was the "super block" with the MidAmerican Energy building (when after completion the majority of jobs moved to Omaha); then it was two publicly funded parking ramps (which are currently losing money and being underutilized); next it was the $5-million River Renaissance referendum (remember "Say yes!"); and most recently the new Class A office building mentioned above. All were touted as the next big thing that downtown needed to remain competitive. Amidst all this is our $113-million River Renaissance, with the construction of a new $35-million Figge Art Museum; the $9-million River Music Experience; a $6.8-million sky bridge scheduled to be open by mid-February; $13 million in improvements to and renovation of John O'Donnell Stadium; and a renovation and expansion for the Adler/RiverCenter to begin early next year.
But IOC partners see these enhancements as "brush fires" that aren't quite burning hot enough. Further, the IOC folks would have us believe that a new riverfront casino/hotel, not all of the amenities outlined above, will make Davenport a unique destination for Iowa.
Does this mean that a new riverfront hotel/casino will mean more people using our publicly funded parking ramps and more people visiting our publicly funded art museum, music museum, and theatre? Will a new casino/hotel mean more businesses moving into our empty office spaces downtown, too? So far no empirical or anecdotal evidence backs this audacious claim.
Why This Location?
"It makes sense" is the IOC's less-than-compelling answer to the question of why it should be allowed to build a 10-story hotel with a five-story parking garage between Perry and Brady streets just south of the railroad tracks. There is no basis for this claim, even with two financial-impact studies done on IOC's behalf.
Investment in this Location: IOC cites the $90-million investment it's made in Davenport and the Rhythm City Casino property as a primary reason to stay very close to where it is today. But when pressed about that investment, IOC officials admitted that the majority of it, $58 million, was for the operator's license they bought from the President Casino. Except for the value of the lighted porte-cochere carport, the remainder of the IOC's investment is in the floating guest-services barge and the casino boat itself. In other words, the majority of the $90-million investment is not within the current site and almost all of it is completely movable, as easily relocated six blocks downstream as one block upstream.
Other Options Not Economically Feasible (e.g., Centennial Park, River Center): During a presentation to the Reader last week, IOC officials claimed that there has never been any serious discussion with the city about a new hotel/casino in any location other then the proposed site at the Brady Street river's edge. Centennial Park was no good because of "remediation" costs associated with contaminated soil. When asked if there were any environmental studies conducted by the city or IOC to confirm that concern, the answer was "no." The concept of a hotel at Rhythm Courtyard "just wouldn't work" and was not feasible physically.
Tearing down the Black Hawk Hotel and building new there was not going to work, either - too costly - but stats on how much more costly were also not forthcoming. Further, Mary Ellen Chamberlin of the Riverboat Development Authority pointed out that the riverfront site is necessary because IOC wants to be included and participate in the "circle of amenities" that surrounds the proposed location. When asked why this "circle of amenities" did not include the newly renovated John O'Donnell stadium and the QC Sports Center, less than six blocks away, she claimed these amenities were more family-oriented and not suited to a casino presence. Does this mean that the Figge Art Museum, the River Music Experience, and the Adler Theatre are not family-oriented? What makes these less family-oriented than baseball and other sports?
The Isle of Capri casino in Bettendorf is the number-one visited destination in the Quad Cities, with 1.8 million visitors each year. Considering that this facility has no "circle of amenities" and is surrounded only by a long string of parking lots, does it not follow that a casino hotel expansion would prosper no matter where it was built?
IOC officials were quick to point out that the Bettendorf Casino benefits from 75,000 cars per day crossing the I-74 bridge, and that many people going to the Mark for shows will visit their casino. It does beg the question: Wouldn't the Centennial Bridge traffic overlooking John O'Donnell and Centennial Park warrant moving downstream?
No, according to Chamberlin. The Centennial traffic is too local, while the I-74 traffic is more transient. What stats back up such claims? If this were true, then how will the Rhythm City Casino achieve a higher mix of non-locals at its new casino/hotel? Currently 80 percent of its visitors are considered local. With nothing but local traffic around it, how will the casino achieve its growth goals of 2.1 million new visitors?
Via target marketing to the Chicago area, it is explained. Then if it is target marketing, not proximity to an interstate highway, that will attract new customers, won't those guests visit regardless of a circle of amenities?
No documentation has been offered by the IOC that illustrates how or why this project is not economically feasible at any other location. In fact, the IOC's and the city's own study by HVS of Chicago to forecast growth was explicitly not site-specific.
All This for $43 Million?
"All This = $43.1 Million" is the title of a summarizing slide that the public is shown after a sweeping animation fly-by of the LeClaire park waterfront, complete with dozens of trees, landscaping, a public-square promenade adjacent to the sky bridge, an eagle viewing area, and synchronized water fountains creating a canopy over pedestrians' heads.
Truth is, the $43.1 million does not include any of the items named above - those would be left up to the city to pursue with the funds from its increased tax revenues. When asked about the potential cost of these additional features, City Administrator Malin ball-parked the figure at $10 million. Why does the IOC include such features and landscaping as part of the entire project when the proposed financing does not in fact pay for them? Why does a proposed project not include the costs associated with renovating or demolishing the Black Hawk Hotel? The IOC would like to gift the hotel to the City, as part of this package. Last week, Donovan estimated that renovation costs for the historic hotel would exceed $5 million. And if the revenue, taxes, and rebate forecasts are all based on a 10-year plan, as IOC has stated, why is the public's financing for the parking garage being placed on a 20-year schedule? How can the public really know exactly what they are being asked to finance?
Self-Funded?
See Jeff Ignatius' piece outlining IOC's financing proposal. Self-funding might be one way to look at this, but risk-free it is not. Heaven forbid that something would happen to the gambling industry; or that IOC is purchased by an even larger gaming company that wishes to move the operation elsewhere, or worse, decides to stay and proves an even poorer steward of our natural resources; or that citizens of Iowa decide at a later date to disallow gambling. Let's keep in mind that these revenue and growth statistics are based on forecasts, predictions, and educated guesses. Banks loan money every day based on such math, but why should the citizens of Davenport become the casino's bank? "Because the city can borrow money cheaper via public bonds" is the answer. Wouldn't we all like that opportunity?
And whether or not these forecasts take into consideration that two other casinos are simultaneously relying on similar growth in the market (Isle in Bettendorf and Casino Rock Island) is yet to be seen. When asked about this market-growth factor, audience members were told by Donovan, "The future is looking very bright for the gaming industry."
Just how bright is up for debate. In April this year the Isle of Capri Casino's stock dropped 11 percent when it announced that expansion projects in Louisiana, the Bahamas, and England were not as profitable as predicted. In March, the publicly traded company filed a report stating it was highly leveraged and might have challenges obtaining new debt or equity funding on good terms. In November, IOC reported second fiscal quarter "net income of $0.5 million or $0.01 per diluted common share compared to net income of $10.7 million or $0.35 per diluted common share for the same quarter last year." Its stock is trading at higher levels than it did in April, but the company is simultaneously pursuing expansion projects in other markets, such as a $169-million new casino/hotel/parking project in Biloxi scheduled to open a year from now. One has to wonder how much of these acquisitions and expansions in other markets is driving the IOC's desire to have the taxpayers of Davenport act as a bank for nearly 30 percent of this project.
Sidebar: 5 Myths, 5 Answers
Five major myths help shape the many questions taxpayers and council-council members should be getting straight answers to:
1) If you don't support the IOC's proposal as is, then you don't support downtown or the IOC at all. It's not that black-and-white. Citizens deserve input and consideration regarding our number-one riverfront view-shed, and have been completely marginalized by the IOC's planning and one-on-one lobbying of city officials.
2) The project is only profitable at the proposed riverfront site. Existing studies say otherwise, and no data exists about alternative sites suggested by the city to compare.
3) IOC's investment of $90 million in the casino makes relocating too costly. Most of the operation's investment is in the license and two floating structures. How much more can it be to float downstream six blocks? No stats have been offered.
4) The city asked the boat to move. Not quite. The casino came to the city asking to build a hotel where it operates now.
5) The increase in dollars to the community makes the project worth financing. See this story. Is $1.88 million per year back to the community really worth losing our number-one riverfront view?
