Davenport a 'poor stepchild' to Isle of Capri, mayor says

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By Tom Saul | Thursday, July 03, 2008 |

Davenport’s Rhythm City riverboat casino is in line to become a Lady Luck casino, but company officials declined to say exactly when because details need to be worked out with the city.

Rhythm City is one of four properties owned by St. Louis-based Isle of Capri that it plans to rebrand as a Lady Luck casino. The company will spend $16 million to $18 million to complete the makeovers, Jim Perry, Isle chief executive officer, said during a conference call Wednesday.

“The rebranding is part of our strategy to attract local customers and shows our commitment to local markets,” Perry said.

Virginia McDowell, Isle’s president and chief operating officer, said the changeover has already begun at the company’s Caruthersville, Mo., casino.

“It’s been wonderful,” she said. Customers have been very accepting of the resurrected brand.

Davenport officials have concerns, however.

City leaders received a briefing from the Isle a few months ago about the conversion, Mayor Bill Gluba said. Since then, his concerns have been about how much the company plans to spend on its Davenport property and its focus on a local customer base that could result in less revenue.

“They are spending $145 million in Bettendorf for a new hotel, parking and an events center,” Gluba said. “Davenport is the poor stepchild, an afterthought. I’m not sure I’m satisfied with us being the stepchild.”

Last year, plans by the Isle to locate a land-based casino in a portion of Davenport’s RiverCenter adjacent to a refurbished Black Hawk Hotel collapsed after aldermen demanded $2 million in annual rent for the space.

In March, Isle officials announced plans to eventually build a land-based casino in Bettendorf and said Davenport would remain a smaller, localized operation without a hotel. An agreement between the city and the Isle completed in 2005 also was abandoned. That agreement outlined a $43.1 million project, including a 10-story hotel and a parking ramp for 513 vehicles on the city’s riverfront.

“The local focus is of concern,” Gluba said. “Will it be reflective of the amount of money for the Riverboat Development Authority and the amount the city gets? We have to look at what is in the best interests of the city and the taxpayers of the city.”

If the conversion to a locally focused casino is found not to be in the city’s best interests, Gluba said, “We may need a different approach.” He declined to say what that means.

Isle of Capri completed purchase of Lady Luck in 2000. The brand is familiar to Quad-City gamblers because the Bettendorf property was a Lady Luck casino. It was converted to an Isle of Capri in 2000.

Other properties slated for conversion to the Lady Luck brand include the Isle’s Marquette, Iowa, property and a casino in Lula, Miss. In Caruthersville, changes so far have included new signs, gaming chips and logos. Some renovations also are planned.

McDowell declined to say exactly when the changes at the Davenport casino will come.

“We are in preliminary conversations on what changes there will be,” McDowell said. “We will be happy to have that conversation after we have conversations with city leaders.”

The conference call was held to announce fourth quarter and fiscal year 2008 financial results that showed companywide net revenue was up by $124 million over the 2007 fiscal year. The increase came despite higher gas prices and a slumping economy. The Isle’s fiscal year ends April 30.

The Isle’s Bettendorf property posted a net revenue increase of $4.73 million fiscal year over fiscal year, while Rhythm City saw net revenue decline of $7.8 million during the same period, according to a company news release.

Although Rhythm City’s net revenues declined year over year, Isle spokeswoman Jill Haynes said the declines became smaller with each successive quarter.

Company officials attributed improving performance at the Isle’s Quad-City properties in part to the Illinois smoking ban that took effect in January. A smoking ban in Iowa went into effect July 1, but casinos are exempt.

Tom Saul can be contacted at (563) 383-2453 or tsaul@qctimes.com. Comment on this story at www.qctimes.com.