Davenport reaches casino deal with Kehl

Davenport City Council passed a development agreement with Dan Kehl Wednesday night for construction of a new, land-based casino, but some aldermen fear the City is still sending mixed messages to the state.

Council members unanimously passed the agreement with Kehl, who has proposed a $110 million casino and hotel on Veteran’s Memorial Parkway near Brady Street.

“It was time we went to Dubuque, to the Gaming Commission, and say, ‘This is it. We’re done. We’re all in agreement,’” said Alderman Gene Meeker.

Over the past weeks, the Council has been at odds with the Riverboat Development Authority, the nonprofit which holds the city’s gaming license and signed an operator’s agreement with Kehl on September 16th. Kehl now has until October 15, 2013, to reach a deal with the Isle of Capri, before heading to the Iowa Racing and Gaming Commission for final approval.

Some aldermen, though, said they still want to have a backup plan.

“If something happens on the 15th of October, we do have another agreement that we can cue up,” said Alderman Bill Boom.

That agreement came in at the last minute from developer Rodney Blackwell, who has teamed up with a Toronto-based investment company called Clairvest. Blackwell has proposed a $250 million project that includes a casino, hotel, retail and residential space near the intersection of Interstate 80 and Interstate 74.

“Mr. Blackwell also has a car in that train. He happens to be behind Mr. Kehl, but just in case that first car derails, I want to make sure that we have a backup development agreement,” said Alderman Bill Edmond.

With a 6 to 4 vote, Council members decided to table a development agreement with Blackwell until after October 15th. By keeping Blackwell in the background, though, some others worry that Davenport isn’t showing a unified front to the Iowa Gaming Commission.

“The mixed messages coming from this council, that does cause me some concern,” said Alderman Jason Gordan.

Wednesday night, the Clairvest Group also presented an amendment to their development agreement, which would offer the City an extra $5 million in exchange for the leases to Rhythm City and exclusive rights to indemnities from the Isle of Capri.

That amendment, though, will likely only see a vote if Kehl fails to reach an agreement with the Isle by October 15th.