SIOUX CITY | The owner of the Argosy riverboat casino promises to push forward with a $100 million Hollywood-themed casino in Sioux City, despite being passed over by its long-standing nonprofit gaming partner.
"No other operator in the country has the financial ability to move forward without delay or the strong operations record that our company is known for," said Karen Bailey, a spokeswoman for Penn National Gaming.
Penn and the nonprofit Missouri River Historical Development, which holds the casino license, have been locked in ongoing discussions about replacing the riverboat.
The Iowa Racing and Gaming Commission in June moved to replace the Argosy with a more lucrative land-based casino in Woodbury County and take bids from any operator partnered with a local nonprofit group, known legally as a Qualifying Sponsoring Organization.
Penn also in June asked the commission to replace MRHD with a new nonprofit, called Friends of Woodbury County. Former Woodbury County Treasurer Bob Knowler is one of three local leaders listed as officers of the new group.
The MRHD board on Wednesday voted to partner with a new operator, called Sioux City Entertainment, to create the Hard Rock Casino Sioux City, a $100 million project that incorporates the historic Battery Building at 323 Water St.
Bailey in a statement said Penn "will likely submit a proposal with a new" nonprofit group." She declined to offer details of its Qualifying Sponsoring Organization "at this time as we wish to protect the privacy of those individuals involved, given the harassment by MRHD of previous QSO interests announced earlier this year."
It was unclear if the QSO referred to in Bailey's statement is different than Friends of Woodbury County.
MRHD President Mark Monson said the nonprofit group would welcome Penn's competing bid.
"It is a democratic society and that usually fosters the best product," Monson said.
Besides submitting its own land-based proposal, Penn also has promised to press forward with its litigation to reverse separate IRGC votes that put the Argosy's license up for grabs, and turned down a deal that would have extended Penn's contract with MRHD through March 31, 2015. The previous operating agreement expired July 7.
Last month, Wyomissing, Pa.-based Penn filed a breach-of-contract lawsuit against MRHD, and asked a judge for a temporary restraining order to prevent the nonprofit from applying for a license with another operator.
"We continue to work with the IRGC and the Iowa courts to resolve the disputes that have arisen as a result of MRHD's actions," Bailey said in a statement. "Just because MRHD has moved forward -- despite being in breach of our contract -- with a new partner, it does not undo the contract we currently have with them through 2015."
MRHD claims the 30-month contract extension Penn signed in June is null and void because the IRGC never approved it.
Penn insisted MRHD's public parting has not changed day-to-day operations at the Argosy, which is danger of losing its state license without an active agreement with a nonprofit group.
"The partnership announcement by MRHD also does not change Penn's resolve to remain in Sioux City and to keep our 300-plus employees employed while we work to get these challenges put behind us," Bailey said in a statement.
Bailey said Penn presented the MRHD board with a revised contract offer on Sept. 27, but never received a response from the nonprofit. The share of casino revenues to the nonprofit had been one of the main sticking points in the negotiations.
Bailey declined to offer details of the most recent proposal.
Earlier, Penn had offered to build a 110,000-square-foot Hollywood Casino that would house about 750 slot machines and 25 table games, a buffet, two other dining options and a multi-purpose room for concerts and other special events.
Designed in a 1930s art deco motif, Penn's Hollywood brand features Hollywood memorabilia, billboard-size movie posters and video screens that continually shows trailers for upcoming releases, and clips from classic flicks.