On December 19, Iowa Supreme Court Justice Brent Appel granted Sioux City Entertainment, developer of the 8.5 million Hard Rock Hotel & Casino in Sioux City, an emergency stay of Polk County District Court Judge Robert Hanson’s December 10 decision to temporarily suspend the Hard Rock license. Hanson said he wanted to withhold Hard Rock’s license until litigation between Penn National Gaming, owner of the Argosy Sioux City riverboat casino, and the Iowa Racing and Gaming Commission could be worked out. A hearing in that case is scheduled for December 2014. Appel’s ruling allows the Hard Rock to continue construction of the land-based downtown casino which will replace the Argosy.
Penn’s lawsuit against the IRGC claims the commission violated Penn’s constitutional rights and state law during a bidding process that resulted in the IRGC awarding Woodbury County’s first land-based casino license to Sioux City Entertainment on April 18. This lawsuit led to Hanson’s decision which was appealed by both the IRGC and Sioux City Entertainment. Appel or another justice will decide early this month if either or both appeals should be heard by the full court.
Meanwhile, Penn National Gaming representatives plan to address the IRGC at its January 9 meeting, although the IRGC denied Penn National’s request to include considering Penn National’s joint application with its new nonprofit partner, the Greater Siouxland Improvement Association, for a gaming license. IRGC Administrator Brian Ohorilko wrote in a December 27 letter to Penn National attorney Mark Weinhardt, “The application will be publicly recognized and a timeline for consideration will be issued at a later date consistent with past practice.” In response, Weinhardt said there is “no rational basis upon which the GSIA license application should be denied.” Ohorilko also rejected considering at the meeting two other requests by Penn National that would prevent the IRGC from closing the Argosy riverboat when the Hard Rock opened.
In August, the IRGC denied Argosy’s application for a standard one-year renewal of its license, saying the boat no longer had an active operating agreement with a licensed nonprofit group, as required by state law. Argosy’s operating agreement with its former nonprofit partner, Missouri River Historical Development, expired in July 2012, although the IRGC has allowed the Sioux City casino to remain open. Since May, Penn National has withheld the 3 percent of Argosy’s gross casino revenues designated for charitable purposes, that previously went to MRHD. Penn wants to redirect the funds to GSIA.
On March 5 the IRGC plans to hold an administrative hearing to address whether, if an application lacks an operating agreement with a qualified nonprofit group, that “precludes renewal” of a license. However, Penn National will ask the IRGC at its meeting this week to reschedule the March 5 meeting citing its pending litigation against the commission. Ohorilko said the commission will consult its attorneys about the issue.
Sioux City has borrowed $22 million to help fund parking and other infrastructure for the Hard Rock venue. The city has paid the first installment of $5.5 million in tax-increment financing funds, which are scheduled to be repaid with a share of casino revenues and future property taxes from the complex.
To date, Hard Rock developers have spent $44 million on the project and issued $68 million in contracts to contractors and other vendors. About 100 construction workers are currently on-site and that number is expected to increase to more than 400. The Hard Rock facility will employ more than 500 workers.
