Tuesday, February 28, 2017

Why casinos?

Is a casino what this block needs?
The required cooling-off period has passed since Cedar Rapids's casino proposal was denied by the Iowa Racing and Gaming Commission in April 2014, and three proposals have emerged to try it again (Morelli). The Cedar Crossing group led by Steve Gray, who created the 2013-14 proposal for a casino that would have straddled 1st Avenue West near the Cedar River, has resubmitted that version along with a smaller casino concept on 1st Avenue where it currently intersects with 4th Street NE, the railroad tracks and the Cedar River Trail. Wild Rose, which operates large-scale casinos in Clinton and Dubuque, has proposed a small casino on the second floor of a four-story building proposed in the 400 block of 1st Avenue SE.

Of the three I prefer the look of Wild Rose's proposal. It's an unpretentious building that works well with the rest of the block and doesn't impede walkability. My main beefs against the original Cedar Crossing proposal were that it was a gaudy building that wouldn't work with the street; that it was a self-contained pod of attractions that not only would provide no spillover benefits to nearby businesses but would actively compete against them; and that, compared to a contemporaneous proposal by MGM to Springfield, Massachusetts, the City of Cedar Rapids seemed to be getting very little out of the deal. I haven't seen the financial details of the current proposals, so can't compare them or assess their sufficiency.

I remain curious as to why a casino plays such a central role in our city's discussions of economic development. Some people enjoy them, some don't; I get that. And whether big- or modestly-sized, a new casino will make a noticeable splash when it opens. But as economic drivers casinos seem less effective than incremental urbanism. This admittedly is a pretty slap-dash way of demonstrating this, but let's look at the 400 block of 1st Avenue SE, where the Wild Rose hopes to build. The venerable Bever building, built in 1923, is pretty, but this is far from the hoppin'-est block in town. Using the Strong Towns model of property tax comparison...

Albert Auto 421 1st Av SE Cedar Rapids Linn 154,600 155,800 310,400 0.296 1,048,649 11,443
417 1st Av SE Cedar Rapids Linn 80,600 549,400 630,000 0.154 4,090,909 23,226
411 1st Av SE Cedar Rapids Linn 168,000 860,000 1,028,000 0.321 3,202,492 37,899
Vacant Land Cedar Rapids Linn 100,800 6,700 107,500 0.193 556,994 3,963

504,000 1,571,900 2,075,900 0.964 2,153,423 76,531

Wild Rose Casino 777 Wild Rose Dr Clinton Clinton 2,935,000 21,065,000 24,000,000 28.6 839,161 893,468
Riverside Casino & Golf Resort 3184 Hwy 22 Riverside Wash
5,343,500 65,930,100 71,273,600 381.23 186,957 2,069,682

...we find that the taxable value per acre on this block vastly exceeds either of the region's most successful casinos. The taxable value per acre of the vacant lot where Wild Rose hopes to build is more than three times that of the Riverside Casino and Golf Resort!

However, as dubious a use of valuable real estate as I believe a downtown casino to be, I am done with the Iowa Racing and Gaming Commission. I would rather have the city make its own decisions, even if I disagree with them, about its future. The State of Iowa has shown an unbridled willingness to intervene in and overrule local decisions--from casino location to minimum wage to labor agreements to plastic bags to rental regulations, and now taking down the Des Moines Water Works--without any notable talent for doing it. Unless someone's rights are being violated, the governor and legislature should butt out. We can handle this. Do something you're good at, like ensuring gun rights for robots.

B.A. Morelli, "3 Cedar Rapids Casino Choices Meet Application Deadline," Cedar Rapids Gazette, 13 February 2017
Strong Towns, "The Walmart Index: Results of Our Big Box Data Collection Are In," Strong Towns, 3 August 2016
"G.O.P. Statehouse Shows the Locals Who's Boss," New York Times, 21 February 2017, A22

Ben Seigel and Brooks Rainwater, "Preemption Prevents Innovation," US News and World Report, 
"Value Capture and the Property Tax," Lincoln Institute of Land Policy, n.d.

"No CR Casino... Now, What?" 17 April 2014
"Their Casino, Our Casino," 5 September 2013


  1. I agree with certain points you have made, but now we are looking at a gaping open space on the west side of the river. The city overwhelmingly voted to have that casino which was proposed. I believe our competitor in Riverside must have contacted the gaming Commission. With the significant population increase Cedar Rapids has experienced, we can certainly support this. Whatever tax dollars come from it, it's more than what those vacant lots are providing. Is a smaller Casino better than nothing? Yes. But the bigger the venue, the more jobs and revenue it is going to provide for our area. The odds of people traveling from surrounding areas to go to a miniscule Casino are small when compared to a larger destination point. A person doesn't have to agree with what the majority of the people of Cedar Rapids want. It's a shame that such a small group of people, namely the gaming Commission, can overrule what such a large number of people want.

    Strangely enough, the so-called reasoning they used is that it was too near in proximity to other casinos. They said it would cannibalize their business. However, it wasn't long after the rejection that another casino was approved in the Quad Cities and that casino was owned by the same gentleman who owns Riverside. Correction in gambling? The hell you say.

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