State regulators approve Sioux City casino contracts

OSCEOLA, Iowa | A $30 million loan for the proposed Hard Rock Hotel & Casino Sioux City won approval from the Iowa Racing and Gaming Commission Thursday.

The panel also signed off on the purchase of nearly $5 million in property for the downtown gaming and entertainment complex, which will be designed around the historic Battery Building at 323 Water St.  The developer, Sioux City Entertainment, or SCE, will begin closing on the parcels this week, President Bill Warner said after the vote.

In a single motion, the IRGC ratified 33 contracts and agreements submitted by SCE for the $120 million project. Ninety-four percent of the expenditures, totaling more than $10 million, are with Iowa-based companies, individuals or other entities, according to an IRGC report.

SEC's $30 million loan agreement is with Sioux City Funding LLC, an limited liability company headed by former Iowa casino executive Brent Stevens.

In January, Stevens reached a deal with SCE to provide up to $35 million in financing for the Hard Rock venture. The equity investment would give Stevens and SCE President Bill Warner a 50-50 stake stake in the development.

Stevens was CEO of Peninsula Gaming LLC, whose holdings included the Diamond Jo Casino in downtown Dubuque and the Diamond Jo Worth Casino near the Minnesota border along Interstate 35.

The Hard Rock real estate transaction approved Thursday include include more than $1.33 million for the historic Battery Building at 323 Water St., more than $2.4 million for the former Bomgaars store at 333 Douglas St., and $103,529 for a vacant lot on the east side of Third and Water. All of the parcels were owned by Bomgaars, a Sioux City-based retail chain, or entities established by the Bomgaars family.

The Battery formerly served as Bomgaars' corporate offices and central warehouse.

Other acquisitions include $368,850 for parcels at Fourth and Water streets where Dalton's Pub is located, and $451,650 for a building at 224 Fourth St. that formerly housed a flea market.

Other Hard Rock contracts approved by the IRGC Thursday included:

- SCE's development agreement with the city of Sioux City. The 20-year deal, which won final City Council approval Monday, provides $22 million in tax-increment financing for surface parking, new utilities and other infrastructure. The city-issued bonds for the improvements would be repaid with future property taxes from the development.

The city also would receive at least $2.1 million in casino revenues annually, under the deal.

- $112,885, to date, to the Friedmutter Group, the Las Vegas-based architect for the Hard Rock venue.

- $173,2665 for a professional services agremeent with JEO Consulting Group of Ankeny, Iowa.

- $812,000 to Des Moines-based MidAmerican Energy Co. for electric and natural gas infrastructure.

- $73,980, to date, to Hendeson, Nev.-based PBR Consulting Serivces for construction design and cost consultation.

- $25,000, to date, to Omaha-based Terracon Consultants Inc. for soils and engineering work.

- $40,000, to date, to Omaha-based Thiel Geotech Inc. for environmental engineering.

Reported by:  Sioux City Journal