Flood recovery and the casino. Will state regulators make the connection?

Cedar Crossing backers say gambling caps CR's comeback

Todd Dorman
Published: January 12 2014 | 5:05 am - Updated: 29 March 2014 | 1:57 am in
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It’s the Cedar Crossing casino that Cedar Rapids leaders and local investors formally pitched to the Iowa Racing and Gaming Commission on Thursday.

But maybe it should be the “Capstone” casino, instead.

Cedar Rapids Mayor Ron Corbett told the commission that the casino project is “a capstone of our recovery,” referring, of course, to the Flood of 2008.

During a video presentation showing the flood’s devastation, rebuilding efforts and the casino project’s promise, that stone was capped twice.

“Cedar Rapids is truly the Comeback City, but one with a capstone project yet to be done, a project that unites and develops the city like never before,” said narrator Frosty Mitchell, in his instantly recognizable voice. Later on, Mitchell says the casino is “truly a capstone in our journey as the Comeback City of Iowa.”

Lead casino investor Steve Gray also dubbed it “The capstone project, if you will.”

Actually, I wouldn’t.

Don’t get me wrong, I like this project. I voted for it. Its economic effects could be truly significant, especially in the budding, adjacent Kingston Village and at the new Convention Complex/Double Tree hotel up the street. I hope it gets a license. I think it will.

But all that stone-capping got me thinking about this city’s long road to recovery, all of the sweat and tears and muck, all of the risks both big and small taken by so many people, all of the bureaucratic hoops jumped through and the deep frustrations that bent but did not break this town. So I can’t help but think the capstone of our recovery already has been lifted into place. It was raised slowly, steadily, one inch at a time, by countless hands, over more than five years.

In short, the capstone thing hit me off-key. That said, I actually really like “Comeback City,” because it’s accurate. Catchy, even. I say we keep it, casino or no casino.

And really, I need to remember that all of this capstone stuff wasn’t intended to persuade me. Thursday’s presentation in Waterloo, heavily steeped in the notion that the casino will play a critical role in the city’s comeback from devastation, was for the commission’s ears and eyes. Its five members have the only opinions that matter now. It’s those votes that can deliver a state license.

And within that context, connecting the dots between recovery and Cedar Crossing is smart.

“Well, I think it certainly has impact,” said Jeff Lamberti, the commission’s chairman and a former state senator from Ankeny, when I asked him what effect the city’s flood experience would have on the panel’s decision. “Along with the community support, what the referendum was, the fact that you’ve got strong local investors, support of all those groups, the city, the county, that all ties into it.

“All of that has impact, but the market studies will still be very, very important,” Lamberti said.

But let’s say the market studies due in March make this a close call. Perhaps they find Cedar Crossing’s effect on nearby casinos is larger than expected. Would flood recovery be a tie-breaker? Would it make it harder to vote no?

“It might be for some of the commissioners, yeah, just because of the devastation that occurred there, the huge impact of the flood. Also, I think the fact that it is the second-largest city has some impact,” Lamberti said.

“Yeah, I think the market studies are huge.”

I asked the other four commissioners whether the flood sways them. Dolores Mertz, a former state lawmaker from Algona, said she appreciated that the casino would be part of the city’s effort to build flood protection. Kristine Kramer, a car dealer from New Hampton, and Rich Arnold, a former state lawmaker from Russell, each said the flood would be one among a number of factors they’d consider, a list led by the all-important market studies.

Carl Heinrich, a former community college president from Council Bluffs, is sympathetic, and was awed by what he saw in the video.

“It was just devastating. But as far as this particular issue is concerned, that factor is not a key issue,” Heinrich said.

Commissioners did say the Cedar Rapids presentation was “high-quality,’ “first-class,” “professional” and “excellent.”

“We didn’t expect anything less,” Lamberti said.

But the really big presentation will be on March 6 in Altoona, when two firms deliver independent market studies showing Cedar Crossing’s potential impact on the existing gambling industry, which the commission is sworn to protect.

Cedar Rapids casino backers’ own market study, conducted by TMG Consultants, shows that Cedar Crossing's take from existing casinos would range from just 5 to 9 percent, while generating new casino revenues of $61 million annually. Susan Leckert, TMG’s director of gaming feasibility and land use analysis, called the Cedar Rapids market “underserved.” Cedar Crossing’s urban location makes it a “new product” different from nearby facilities.

On one hand, TMG is Cedar Crossing’s hired gun. On the other hand, the gambling market analysis business is a pretty small world, and your credibility is your biggest asset. So it’s in TMG’s best interest to play it straight.

If the commission’s studies are in the neighborhood of TMG’s modest cannibalization estimates, Cedar Crossing will get its license. You can carve that in stone.

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