Isle attorney claims RDA member violated agreement

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Isle attorney claims RDA member violated agreement

Posted Online: Jan. 23, 2013, 8:33 pm

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By Stephen Elliott, selliott@qconline.com

An Isle of Capri attorney claims conversations between a Riverboat Development Authority member and potential operators of a land-based casino in Davenport violate an October agreement.

Davenport officials have proposed buying the Rhythm City Casino, owned by the Isle of Capri, for $46 million and converting it to a land-based casino. The RDA holds the gambling license in Davenport.

On Oct. 25, the Isle gave the RDA permission to talk exclusively with Davenport officials about the purchase plan.At the RDA's request, the Isle extended that permission until Jan. 25 and expanded it to include talks withthe Davenport Community Improvement Corp., a nonprofit board created by the city and appointed by Davenport Mayor Bill Gluba to oversee a proposed land-based casino's operation.

On Monday, the Isle's chief legal officer, Edmund Quatmann, sent a letter to RDA attorney Bob Gallagher saying the RDA may have breached that agreement by talking with additional parties.

Three developers have submitted formal proposals to the city for land-based casinos. In his letter, Mr. Quatmann stated RDA treasurer Don Decker has said he has spoken to at least three other major casino operators.

Mr. Decker has expressed opposition to a city-owned casino, particularly one in downtown Davenport.

In his letter, Mr. Quatmann told Mr. Gallagher that "this is not the first time that I have needed to remind RDA of its obligations to (the Isle) under the operator's contract."Mr. Quatmann claimed Mr. Decker "is/was acting in his capacity as a member of RDA board," further evidenced by Mr. Decker sharing his emails with Mr. Gallagher and other RDA board members.

That action, Mr. Quatmann wrote, has made the Isle "unwilling to extend its permission to RDA to engage in discussions with the City of Davenport and DCIC" beyond Friday.

"It is time for RDA to act," his letter states.

On Wednesday, Mr. Gallagher said he plans to advise Mr. Quatmann that the RDA has not violated the agreement and that any contacts between RDA members and others was not on behalf of the RDA. Mr. Gallagher also sent an email to RDA members telling them Mr. Decker is acting on his own behalf.

"He is a private citizen and can act as one," Mr. Gallagher wrote.

Mr. Gallagher's email also states theIsle doesn't want the RDA to "interfere" with an agreement.

"I believe the Isle would like the RDA to vote favorably on the present contract with the Davenport not-for-profit," Mr. Gallagher said."The Isle is vested in getting the deal with Davenport done."

But he stated the Isle's wishes won't rush an RDA decision on the city's proposal. The RDA, which uses a share of casino revenues to issue about $2 million in grants annually to community organizations and projects, must approve any city proposal for a land-based casino and the use of its license.

"The RDA has a responsibility to exercise its due diligence," Mr. Gallagher said. "When the RDA is comfortable, it should meet and vote and not until."

Mr. Decker said he believes the Isle is trying to intimidate RDA board members from questioning any potential agreement between the city and the Isle.

Jill Alexander, spokeswoman for the Isle of Capri, could not be reached for comment Wednesday.

Last week, Davenport city administrator Craig Malin said the citywants a developer chosen and a purchase agreement signed by the Feb. 21 deadline to put Davenport's proposal on the Iowa Racing and Gaming Commission's March 7 meeting agenda.

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