Without comment, the Cedar Rapids City Council this week approved an amendment to its agreement with the local casino investor group that will allow the city to have a private developer pay to build a $25-million parking ramp and skywalk for the casino project.
The development agreement approved in August between the city and casino investors Cedar Rapids Development Group LLC called for the city to pay to build the 1,000-space ramp with skywalk over First Avenue West to connect to the Cedar Crossing Casino at First Avenue and First Street SW.
The council this week amended the development agreement on the ramp in preparation for Cedar Rapids Development Group’s formal presentation to the Iowa Racing & Gaming Commission on Jan. 9 at the Isle Casino Hotel in Waterloo.
The commission plans an April vote on whether or not to grant the proposed Cedar Rapids gambling venue a state gaming license.
Steve Gray, the Cedar Rapids businessman who is heading up the casino investor group, told the City Council on Tuesday evening that the group had secured financing to build and open the casino. Gray said nearly 200 mostly local investors now are part of the investment group.
City officials have said that having a private firm design pay for and build the parking ramp will ensure that the ramp is in place by June 26, 2015, in time for the casino’s planned opening on July 3, 2015.
The amendment to the casino development agreement spells out that the city will be allocated 352 parking spaces on the three-story ramp’s third floor for general city parking use.
The city will not have to take on debt to build the ramp this year, but the amendment to the agreement calls on the city to buy the ramp from the developer before Sept. 1, 2017. So the city will have to take on debt then to make the purchase. By then, the casino will be generating a stream of new property-tax revenue based on the investor’s investment in the new facility, revenue that will be used to pay for the ramp. This tax increment financing arrangement has been part of the casino agreement from the start.
Cedar Rapids Development Group LLC will operate and maintain the parking ramp, and both the Development Group and the city will contribute annually to a capital maintenance fund that will raise $1.9 million over 20 years.
After 20 years, the casino can purchase the parking ramp at fair market value if it chooses.
The agreement calls for the Development Group to pay the city 1 percent of adjusted gross receipts each year for 50 years, an annual amount that is expected to start at $800,000 year. That payment will be made in two parts on Jan. 31 and July 31 of each year, according to the agreement amendment.