Bettendorf approves $13.8 million loan to finance events center

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By David Heitz | Wednesday, August 20, 2008 8:00 AM CDT | () comments

Construction crews work on the interior of the main entrance to the 53,000-square-foot events center. The Bettendorf City Council finalized a financing package for the center Tuesday night. (John Schultz/Quad-City Times) Buy this Photo

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As the $20 million Bettendorf event center continues to take shape, Bettendorf city officials took some key moves Tuesday toward cementing the deal for the icon-in-progress.

The City Council voted unanimously to proceed with issuing $13.8 million in capital loan notes to help pay for the 53,000-square-foot structure that will be a showcase for meetings and conventions. Alderman James Stewart, 5th Ward, was absent.

The center, which will be owned by the city but run by the Isle of Capri, is located about a block east of City Hall on the Isle of Capri gaming complex. The complex boasts a combined 514 hotel rooms, the most in one location in the state of Iowa.

Council members received 150 pages of background material on the loan and the deal on Monday night, giving them just a day to pore over the documents before voting.

“I read the whole thing and feel comfortable with it,” said Alderman Norm Voelliger, 1st Ward.

“I have no compunction about going forward,” added Mayor Pro Tem Joe Douglas, who ran the meeting.

The loan will be paid using the increased property tax revenue that comes from the second hotel the Isle opened in 2007. That comes to $1.1 million annually. However, the lender also has asked that property tax revenue from the first hotel be used as a backstop in the event the tax revenue from the first hotel is not enough.

To protect its property tax stream in the event that occurs, the council also voted unanimously to sign off on a deal with Isle chairman Bernard Goldstein’s Green Bridge Corp. properties. The properties include Goldstein’s personal Bettendorf holdings upriver from the Isle. In the event the bank goes after the property tax from the first hotel, the city would initiate minimum assessments on the Green Bridge properties to make it whole again.

Alderman Patricia Malinee, 4th Ward, lauded city staff for putting the event center deal together.

“They did a first-rate job,” she said. “I think this is a win-win for us and for the Isle, and what I really like about it is that the city is protected from loss. The agreement is very tight in that regard.”

The 18-year loan is being granted by The National Bank of Bettendorf. The interest rate is 7.5 percent for $11.1 million of the loan and 5.05 percent for the remaining $2.7 million. The rate is lower for a portion of the loan because the bank thinks that amount qualifies for a public-use rate.

The loan comes with possible “resets,” which means the interest rates could balloon through the years. In a worst-case scenario, the rates could go as high as 15 percent and 12 percent, respectively, which would result in a total interest payment over the loan’s term of $14.4 million.

Meanwhile, the center quickly is becoming a fixture on State Street, with its trademark roof-top latticework.

Construction remains about six weeks behind schedule, city Economic Development Director Steve Van Dyke said, but as many as 100 construction workers daily continue to toil at the site to take advantage of the mild weather and play catch up. Most of the glass has been installed, as well as the exterior stone.

Besides the loan, the Isle, Scott County Regional Authority and a Vision Iowa grant also have helped pay for the structure.

David Heitz can be contacted at (563) 383-2202 or dheitz@qctimes.com.

What’s in a name?

Also Tuesday, the Bettendorf City Council voted unanimously to set a date for a public hearing and to direct the advertising of bids for signage at the event center. That prompted some council members to question what the venue will be called.

Alderman Patricia Malinee, 4th Ward, and Alderwoman Debe LaMar, 3rd Ward, said they do not want to miss out on a branding opportunity for Bettendorf’s downtown.

“I know there has been a discussion of whether to sell naming rights, and I don’t know if we want to do that, but I’d like staff to think through carefully all the issues related to the naming of the events center, especially the marketability of the name,” Malinee said.

Malinee said she likes how a hotel and water park in Dubuque, Iowa, came to be named “Grand Harbor,” adding, “Doesn’t it say everything about Dubuque? There’s a harbor and it’s grand.

“I’m hoping that somehow we can tie the characteristics of our geographic location and the characteristics of our community to have a name for the events center that will draw people in.”

City Administrator Decker Ploehn said a name will be decided in consultation between the City Council, the community and the Isle. “But ultimately it’s our building.”