City staff recommends Hard Rock Casino proposal
By Jim Hagerty
ROCKFORD – City staff has put its stamp of approval on a proposal to build a Hard Rock Casino in Rockford, Mayor Tom McNamara announced Monday.
The Hard Rock proposal, which calls for a casino at the site of the former Clock Tower Resort, was one of three submitted to the city.
“Hard Rock has the strongest and most complete proposal,” the mayor said during a news conference. “Its financing structure is credible and includes realistic and sustainable minimum gambling tax guarantees, along with additional revenue sharing payments to offset impacts to the city.”
Gorman and Co., the developer behind the downtown Embassy Suites and Rockford Convention Center, presented a plan to build a casino adjacent to that project. However, while a casino would be a major downtown development, McNamara said the Wisconsin company’s bid was incomplete.
“Gorman has not secured a casino operator,” he said. “It has not provided a complete financial package. It has made no application for zoning. It must relocate an existing manufacturing business, and it has no experience developing casinos.”
The mayor added that Gorman, on Sept. 27, submitted a nonbinding letter of intent that identified CMS Group as a gaming company willing to assume the role of casino operator and applicant. But city officials say because the CMS was not part of the initial application process, for them to jump in this late in the game would hinder Rockford’s chances of receiving a casino license.
“There is no sufficient basis for assessing the viability of this latest proposal and it’s financing,” McNamara said. “And, therefore, we have been unable to engage in good faith negotiations,” he said. “Unfortunately, the downtown proposal is not developed to the point where we feel confident the Illinois Gaming Board would issue a license at this location.”
CMS CEO Rick Campbell was at Monday’s City Council meeting and said his company was left out of the conversation even after it had been named as a potential operator.
“We still want the opportunity to move forward with that project, but we weren’t even given a chance to present the financials,” Campbell said. “We were told today was the deadline and that’s the one we still want to stick with.”
City leaders also commented on the application by Forest City Partners, which proposed a 60,000-square-foot casino and a host of other components on the far-east side near Javon Bea Hospital.
“The proposal also has very important weaknesses,” McNamara said. “Forest City has not provided evidence to confirm commitments for its equity financing. Its proposal also does not contemplate approximately $46 million of expenses.”
The mayor added the plan’s lack of details regarding sources of debt and equity funding and incomplete data, proposes a significant risk that financing for project may be unavailable or insufficient.
“Although Forest City’s proposal is attractive and ambitious,” he said, “staff cannot recommend certification due to uncertainty related to a number of items, including commitments for the non-casino developments.”
In addition to a casino, Forest City proposed two water parks, two hotels, a senior-living facility a Luxe Golf complex.
If Hard Rock’s plan is approved by aldermen, it would be sent to the Illinois Gaming board for review, which could take as long as nine months. The company says it will transform parts of Giovanni’s Restaurant and Convention Center into a temporary site within 90 days of approval. The temporary site would be open for 18-24 months and feature 736 slot machines.
The permanent facility would offer 1,500 slot machines and 55 gambling tables. The 21-acre development would include several restaurants, including Hard Rock Cafe; a Rock Shop that involves Karen Nielsen, wife of Cheap Trick’s Rick Nielsen, and Hard Rock Live!, a 1,600-seat music venue and event center. The guitarist has been the face of the project since it was announced this summer and is expected to display some of his prolific guitar collection and Cheap Trick memorabilia.
While some council members have openly supported the Hard Rock plan, at least one is not completely sold. Linda McNeely, D-13, said her decision could be based on the identity of the investors.
“I think that will affect how aldermen will eventually vote, whether we go with Hard Rock or one of the other two,” McNeely said.
While state statute does not require applicants to disclose a list of their investors, their identities have been disclosed to the city.
Aldermen could cast a vote Oct. 7. They have until Oct. 26 to certify one or more proposals with the gaming board. Only one license will be issued.
According to the city, Hard Rock has agreed to a pay the city a minimum of $7 million in annual gaming taxes, an amount that falls within the $4 million to $8 million range city officials projected at the beginning of the casino process. The city would keep 70% of those dollars. Winnebago County would receive 20% while the remaining 10% would be divided equally between Loves Park and Machesney Park.
The Rockford Park District stands to benefit, too. Hard Rock announced earlier this month its intentions to help fund an amphitheater at Levings Park, neighborhood youth programs, expansion of Washington Park Community Center and enhancements at the Sinnissippi Park Music Shell.
This story has been updated.