COUNCIL BLUFFS, Iowa — Sioux City Entertainment will build a Hard Rock Casino in northwest Iowa's Sioux City after the Iowa Racing and Gaming Commission awarded a gambling license Thursday to the group.
The commission chose from four proposals for land-based casinos in Sioux City after hearing proposals, meeting with developers and touring the proposed sites last month for casinos to replace the Argosy Sioux City riverboat casino. State regulators decided in 2011 to replace the Argosy with a land-based casino.
Penn National Gaming Co., which currently runs the Argosy, submitted two proposals for a casino – one just outside of Sioux City and one in downtown Sioux City that would have required the demolition of several buildings. Ho-Chunk Inc. also put in a bid to build the proposed Warrior Casino & Hotel, a $122 million project slated for the Davidson Building and Warrior Hotel.
But it was Sioux City Entertainment's bid for the Hard Rock Hotel & Casino for $118.5 million that was selected. It will be at the site of the historic Battery Building in downtown Sioux City.
"Obviously, we're very happy with the decision," said Bill Warner, president of Sioux City Entertainment and founder of the group's Las Vegas parent company, Warner Gaming. "We had no idea how it was going to go until they announced it."
The vote was not unanimous. Commissioners Greg Seyfer and Dolores Mertz voted against awarding the license to the Hard Rock site, with Mertz earlier declaring the Ho Chunk proposal as her pick and Seyfer preferring Penn National's downtown proposal. All five commissioners expressed difficulty in coming to a decision.
"I have never lost so much sleep," Mertz said. "It has been really a wrenching decision."
The winning Hard Rock proposal will see a casino with 800 slot machines and more than 200 gambling tables, Warner said. It will also sport an 800-seat venue for entertainment acts and concerts, several restaurants, a 60-room hotel and a "backyard" park setting around a small lake that can hold 3,000 people.
Construction is set to begin in July and is set to be complete by July 2014.
If the casino is not up-and-running by March 31, 2015, a fine of nearly $54,000 a day will be accessed against the casino's developers until it opens.
Iowa law requires casino developers to pair with qualified nonprofit organizations, which collect and distribute a portion of casino profits to nonprofit and government groups. Sioux City Entertainment is paired with the Missouri River Historic Development – which had been the nonprofit for Argosy operator Penn National.
The nonprofit and Penn National have been locked in a legal battle over their contract. Penn filed a breach-of-contract lawsuit against the nonprofit group last year when the two groups failed to agree on a contract extension and the nonprofit joined forces with Sioux City Entertainment.
Asked how Thursday's decision might affect that legal battle, Missouri River Historic Development President Mark Monson said, "I don't know. I assume it will go on."
Monson said he expects his nonprofit to collect $3.8 million a year from the Hard Rock Casino, most of which will be awarded to education, social and cultural organizations and economic development groups through a grant-writing process. The group had been collecting just under $2 million a year from the Argosy.