Representatives for the nonprofit Clarke County Development Corporation (CCDC) and the operator of the Lakeside Casino in Osceola told the Iowa Racing and Gaming Commission today they had reached an agreement to settle their longtime dispute over payments– but now that agreement is in dispute.
CCDC lawyer Doug Gross told the commission the group backed away from a memorandum of understanding with Affinity Gaming after learning the owners wanted to subtract their lease payment to the city for casino land from the nonprofit payment. Gross said that is not what agreement said.
“It says the new owner shall agree to pay CCDC three percent of its adjusted gross revenue — or the state minimum — whichever is greater,” Gross said. “They indicated to us that they believe that means three percent minus one percent. I don’t see where that minus one percent is in the agreement — we never discussed it. We will work with them to try and resolve that matter.”
Gross said Affinity has only been paying the nonprofit one-and-a-half percent of gross revenue since taking over the casino from bankruptcy, even though the state minimum is three-percent. He told the commission he would recommend they drop the lawsuits over the issue and pursue the terms of the memorandum.
Affinity attorney, Jim Quilty, told the commission that his company started negotiations recognizing they were paying the 1.5- percent and also the 1-percent for the lease agreement with the city. Quilty said they then offered a couple of proposals that would increase the amount to a total of three percent, and that is the memorandum they signed.
“After the memorandum of understanding was negotiated and signed, which contemplated that more formal agreements would be adopted, we learned the CCDC believed that what in fact had been agreed was that we would pay three percent AGR under the management agreement on top of what we were already paying. And that is not what we agreed,” Quilty said.
Commissioner Carl Heinrich of Council Bluffs told the two men he was glad they appeared to be closer to solving their dispute, and wants to see it completed. “I really thing it’s time to sit down — and I don’t know if you need another mediator or not — but for crying out loud, surprise us and come back and say we have agreed that this is the way it is going to be. We are happy they are happy, we are all happy,” Heinrich said.
He said this issue has been going on since he came onto the commission and would like to see the issue solved by August, noting August 1st is his birthday and it would be a good present to see an agreement. Gross said he is not certain he wants to go back over everything again.
“I don’t know about you, but if you’re involved in a dispute with a party and you resolve the dispute with the party and they write the agreement that shows what the resolution is and then they try to back out of it, would you go back to mediation?,” Gross asked.
“I have a hard time recommending that to them frankly. I just do, it just doesn’t seem right. We’ve been drug through the knothole for four years.”
Quilty said he is willing to work more on the issue.”We feel disappointed that we’re here. We’re happy to work toward some type of resolution with the commission’s direction. But,I do want you to know that we offered everything that we had to give to them,” Quilty said. Commissioner Heinrich said they are closer than they have been on the issue in the past and he hopes they can work things out soon.
The issue was an update from the two sides and not scheduled for any action by the commission.