As the Davenport City Council contemplates how it ended up paying millions in site work for its new land-based casino, Bettendorf aldermen also should be asking questions about its development agreement with the Isle of Capri Casino.
Revisions to that agreement in 2007 allowed Green Bridge Company (owned by the Goldstein family) to wiggle out of a pledge to create $27 million worth of riverfront development on land adjacent to the casino.
The changes, negotiated by City Administrator Decker Ploehn and former City Attorney Greg Jager and approved by the council, let Green Bridge shift its pledge for a minimum assessment of $27 million on 40 acres just upstream from the casino property to the Isle of Capri, beginning July 1, 2021 and lasting until June 30, 2028.
The land owned by Green Bridge was to be where high-rise condos with riverfront access would be developed. Half of the land is vacant and the other half has several old warehouses. The property currently is assessed at $2.6 million.
Most residents might say "no harm, no foul" as the liability (higher property tax assessment) would still be due and payable in higher taxes, regardless whether it was from Green Bridge or the Isle's pocket come 2021.
However, the paragraph transferring the tax liability ends with a brief caveat: "The foregoing obligation is subject to offset by any Tax Rebate available as provided in Paragraph 2(G) below."
As we're learning now, Paragraph 2(G) gives the Isle a tax rebate for "any new land-based casino improvement" for a period of 20 years, if the value is more than $20 million, or 10 years, if the value is less than $20 million.
So with the Isle's recent announcement to build a new $30-million land-based casino, it appears the city will get no new tax revenue from the gambling hall between the two hotels for the next 20 years.
And, thanks to that little sentence, those higher taxes – rebated back to the Isle to pay for its land-based casino – also will offset the entire $27 million in new riverfront development promised by Green Bridge.
Now, the Isle is seeking to cut its property tax assessment on its hotels and strip mall from $85 million to $44 million. Having paid off the Tax Increment Financing (TIF) revenues bonds on the city's events center in May of this year, it is no longer bound by the minimum assessment agreement, also part of that development contract redo of 2007.
The $85-mllion assessment is really a constructed number by the assessor's office in order to generate enough "incremental" taxes to pay off the event center bonds.
With that debt retired, and minimum assessment clause null and void, it will be tough for the city to argue the actual property value of two middle-aged hotels and a largely vacant strip mall is anywhere near $85 million. I would suspect the Isle would be happy with, say. . . a $30 million reduction.
Isn't that the amount the Isle is spending to build a land-based casino, but won't have to pay any taxes on for 20 years? And, isn't that about the amount Green Bridge and the Isle will avoid having to invest in riverfront improvements?
Why, yes it is. Pretty nifty, if you're a casino holding all the cards.
Snake eyes, though, if you're a taxpayer thinking gambling will lead to improvement of the city's riverfront.
