Isle of Capri casino proposal among three pitched to Missouri Gaming Commission

JEFFERSON CITY, Mo. -- A $125 million casino in downtown Cape Girardeau would be a "game changer" for the community as well as generate more new state revenue than any of the other competitors for Missouri's 13th gaming license.

That was the message city officials and Isle of Capri executives gave to the Missouri Gaming Commission during an all-day hearing Wednesday at the Doubletree Hotel.

"I would respectfully suggest that Cape Girardeau represents the best opportunity for the state of Missouri," Mayor Harry Rediger told the five-member commission. "By selecting Cape Girardeau and Isle, Missouri will have a financed project, a licensed operator, a site without permit issues, and a location that adds the most tax dollars to the state of Missouri."

But they went up against two other companies -- down from three others after a last-minute withdrawal late Tuesday -- who tried to convince the commission otherwise. Paragon Gaming wants to put a $107 million casino-resort in Sugar Creek near Kansas City and Koman Properties hopes to get the license for its $150 million Casino Celebration casino in St. Louis.

Rediger also revealed during his time at the podium that Cape Girardeau has commissioned two polls that show community support that he hopes bears out when voters go to the ballot box Nov. 2. While he didn't have the numbers with him, he said after the hearing that both show more than 50 percent of city residents favor a casino while about 30 percent don't. The rest said they were undecided, Rediger said. The poll was done by a St. Louis firm.

One applicant didn't show up, which led commission chairman Jim Mathewson to tell reporters later that proposal was out of the running. North County Development, which sent a letter to the commission Tuesday, said it would not be attending the hearing and that it is having trouble securing financing for its $150 million Chain of Rocks casino project. That project, a casino and hotel, had been proposed for Spanish Lake in north St. Louis County and has drawn criticism because it's in an environmentally sensitive area.

Mathewson, who has stressed financial stability as key all along, said for him that effectively takes that company "off the table," especially this late in the game. The commission has said it hopes to render a decision before Thanksgiving.

"They had a chance just like everybody else to be here," Mathewson said.

Cape Girardeau went first after a drawing. The roughly hourlong pitch from Cape Girardeau included presentations from Rediger, city manager Scott Meyer and Isle executives, including CEO James Perry, president Virginia McDowell, vice president Richard Meister, chief development officer Paul Keller and chief financial officer Dale Black.

Isle emphasized that the other casinos would not generate as much revenue for the state because those markets are saturated. Money from a new casino would be drawing from existing casinos and therefore wouldn't be creating as much new state revenue.

Cape Girardeau city manager Scott Meyer speaks to the Missouri Gaming Commission during a presentation by Isle of Capri executives Wednesday, Oct. 20, 2010 in Jefferson City, Mo. Isle of Capri was the first of three casino companies to make a pitch for the state's 13th gaming license. (Fred Lynch)

Steve Gallaway, from consulting firm Gaming Market Advisers, presented a market study that shows Cape Girardeau would generate greater incremental, or new, revenue for the state. Casino Celebration would generate $106 million annually, but $71 million would be "cannibalized" from other casinos, he said. Only $35.8 million would be new revenue, Gallaway said.

Paragon would raise $93.9 million each year, he said, but $58.6 million of that would come from money that would have otherwise been spent at other Kansas City-area casinos, he said. Isle of Capri, however, would have an annual revenue of $79.4 million, while only $12.5 million would be cannibalized from other casinos, Gallaway said, joking that one of those would be in Metropolis, "and that's Illinois, so who cares?" Since Cape Girardeau is not a saturated market, Gallaway said, Isle of Capri's project would generate nearly twice the incremental tax income for the state than the other applicants, he said.

Las Vegas casino owner Diana Bennett, owner of Paragon Gaming that is seeking to put a casino at Sugar Creek, countered that Las Vegas casinos are especially close together.

"We don't call that cannibalizing there," she said. "We call that growth."

City manager Scott Meyer told the commission that a casino would revitalize a blighted area near downtown by providing an "anchor" business that would draw in 1 million new visitors a year, hopefully spurring further development and providing a boon to existing businesses.

Isle predicts that 600,000 of the casino customers will be from outside the Cape Girardeau-Jackson area. "One of our key components is to enhance our regional hub status," Meyer said. "Not only keep it, but to grow it. Right now, the area where the casino would go is abandoned buildings and without any revitalization, we believe it will stay that way."

Meyer also said the casino would generate more in city tax revenue and create jobs. Currently, the site where the casino would go generates $9,736 a year in real estate taxes. Isle's casino property in Boonville, on similar acreage, generates nearly $3 million. Existing jobs at or near the location is 10, Isle executives said. The casino is expected to hire 450.

Isle executives also stressed it is a financially solvent company and CEO Perry pledged that they would finish what they started.

"I give you my word we can get this project done," Perry said.

smoyers@semissourian.com

388-3642

Pertinent address:

422 Monroe St., Jefferson City, MO

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