Statehouse Republicans this week unveiled bills that would block gaming projects awarded a license this year from being included in a city’s urban renewal plan, ensuring tax dollars don’t support future gaming expansions.
Lawmakers say the bills — Senate Study Bill 1159 and House Study Bill 208 — do not affect Cedar Rapids’ new casino but rather ensure public funds are not used to support the expansion of gaming in Iowa. It applies to any casinos approved after Jan. 1, which only includes the Linn County project for now.
Sen. Scott Webster, R-Bettendorf, who introduced the Senate bill, said the Jan. 1 retroactive date ensures all new casinos moving forward won’t get tax incentives that would take away from schools and local government operations.
“We didn’t pass a moratorium bill,” Webster said. “What this is saying is government and taxpayers should not be paying for casinos or getting new casinos throughout Iowa. That’s exactly what it says. It says we shouldn’t take money away from schools. We shouldn’t take money away from police officers, firefighters, taxpayers.”
The measure advanced out of subcommittee Thursday with support from Webster and Sen. Dawn Driscoll, R-Williamsburg. Sen. Janice Weiner, D-Iowa City, was opposed.
A rendering of the proposed Cedar Rapids casino.
Iowa regulators awarded license for Cedar Rapids casino this month
The Iowa Racing and Gaming Commission voted 4-1 earlier this month to award Cedar Rapids gaming interests a license to operate the $275 million Cedar Crossing casino, which is slated to open by New Year’s Eve 2026.
Once it is completed, it will be Iowa’s 20th state-licensed casino.
Peninsula Pacific Entertainment, the operator, and the nonprofit Linn County Gaming Association, which will divvy up casino revenue to local nonprofits, were awarded the license.
The day after state regulators approved a license, crews broke ground at the site near downtown Cedar Rapids, west of the Cedar River on land that has sat largely vacant since the 2008 flood.
Its approval came after the Iowa House passed a legislative moratorium that would have barred state regulators from awarding a new license for five years. The Senate declined to take it up as the concept of a moratorium lacked sufficient support among Senate Republicans, opening a path for the commission to vote in Cedar Rapids’ favor.
The panel twice denied Iowa’s second-largest city a gaming license in the past, in 2014 and 2017, as opponents feared the threat of “cannibalization” of existing gaming revenues.
Weiner, the Senate minority leader, said the Senate Republican caucus had the opportunity to bring a moratorium to the floor and did not, and viewed this bill as “performative.”
“This is the party of small government trying, yet again, to tell local governments what they can and can’t do,” Weiner said.
Officials say Cedar Rapids casino, funded by private dollars, could proceed
While Cedar Rapids’ casino project falls in an urban renewal area, casino developers did not ask for nor receive city financial incentives to support the project. It’s entirely funded by private funds.
Local governments in Iowa may establish urban renewal areas to redevelop blighted areas, fund private economic development, support public improvements related to private development and finance construction of low- and moderate-income housing, according the nonpartisan Legislative Services Agency. Tax increment financing is the main funding source for urban renewal areas.
Gary Grant, a lobbyist representing the city of Cedar Rapids, said city officials also believed this bill would not prevent the casino development that’s underway.
But he said city officials are working to understand whether the bill could affect any public improvements in the area, such as road work to accommodate more traffic or a flood wall that is part of the city’s approximately $1 billion Cedar River flood control system.
It’s unclear when the urban renewal area was established here, but Grant said the city is reviewing whether the casino development would need to be removed from the urban renewal area if this legislation is signed into law.
RG Schwarm, a lobbyist representing the project’s developer, the Cedar Rapids Development Group, said the developer would continue not to seek any tax incentives.
He said the group is reviewing a proposed provision stating that a development agreement setting the minimum actual value must not be less than what was presented to the Iowa Racing and Gaming Commission in the license application process.
“What previous casinos were treated at with regards to their initial assessment, we would ask be treated the same,” Schwarm said.
Chelsea Hoye, director of government affairs for the Iowa League of Cities, said the group is undecided on the bill and generally does not support any negative changes to the use of TIF.
“We appreciate that this has a very narrow scope to the language, but we believe the use of TIFs is a great tool for cities to promote economic development,” Hoye said.
Marissa Payne covers the Iowa Statehouse and politics for the Register. Reach her by email at mjpayne@registermedia.com. Follow her on X, formerly known as Twitter, at @marissajpayne.
This article originally appeared on Des Moines Register: Public funding couldn’t be used on new casinos under Iowa bills
