City/Isle deal to end tax dispute; city gets $652,000 and schools, county may finally see tax boost

The tax dispute between the city of Bettendorf and the Isle of Capri Casinos, Inc. would be resolved under a development agreement deal expected to be approved tonight (11/17) by the city council.

The Isle has been seeking to lower the assessed value of its riverfront property to $45 million from the current $85 million. An appraiser hired by the city valued the Isle's two hotels and riverboat casino at $55 million. The county review board in June rejected the Isle's tax appeal, but the casino operator then filed suit in Scott County District Court.

The Isle had agreed to a minimum $85 million assessment of its property as part of the current development agreement with the city, but that clause terminated when the Isle paid off the Tax Increment Financing (TIF) bonds for the city owned events center in May.

The new amendment sets the value of the current Isle property at $50 million, increasing to $80 million with completion of the Isle's new land-based casino under construction between the two riverfront hotels.

However, only a portion of that $80 million value – approximately $29 million related to the South Tower hotel – would begin generating property taxes for the city, county and school district.

Property taxes on the remaining value – $30 million for the land-based casino and $21 million for the North Tower hotel – would continue to be rebated back to the casino under the deal. The North Tower TIF rebate would continue another 10 years through June 30, 2026, while the land-based casino tax rebates would last 12 more years through June 30, 2028.

To sweeten the deal for the city, $652,000 in the joint Isle/city events center capital reserve will be paid over to the city. The reserve for events center upkeep and improvements now totals nearly $1.7 million.

Under terms of the development agreement when the events center was funded, both the city and Isle were to contribute $250,000 a year to the fund. That amount was scaled back later because the reserve was greater than originally thought needed, and the Isle's funding source – a $4 per night room charge at its hotels – never generated the full $250,000 per year.

The new deal before the council would set a floor of $500,000 for the reserve fund. Should it fall below that level, the Isle would pay up to $250,000 a year from its TIF rebate on the land-based casino. If that amount is insufficient, the city and Isle would each contribute half the amount needed to bring the fund up to the $500,000 minimum reserve.

CLICK HERE to download a copy of the development agreement amendments.

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