Hard Rock Casino and Hotel

The Hard Rock Hotel & Casino, under construction at Third and Water streets in downtown Sioux City, is shown Jan. 17. A Polk County District Court Judge will hear oral arguments Thursday in a case involving the Hard Rock's state gaming license.

Jim Lee, Sioux City Journal file

SIOUX CITY | The city should not be allowed to enter a lawsuit involving the Hard Rock Hotel & Casino Sioux City's state gaming license, Penn National Gaming Co. argued in court documents Thursday.

Citing its large public investment in the Hard Rock venue under construction downtown, the city on Jan. 17 filed an emergency request to present evidence at a Jan. 30 hearing in Polk County District Court.

The hearing was ordered Jan. 9 by the Iowa Supreme Court, which told the lower court to reconsider its Dec. 10 decision to stay the Hard Rock license issued by the Iowa Racing and Gaming Commission in April until a final verdict in Penn's suit seeking to overturn the IRGC decision.

Penn, the nation's second-largest gaming operator, owns the Argosy Sioux City riverboat casino, which is scheduled to be dislodged by the Hard Rock upon its opening next summer.

In its motion for resistance filed Thursday in Polk County District Court, attorneys for the Argosy argued the district court lacks the jurisdiction to address the city's request.

Argosy attorneys also argued it would be "highly inequitable" and an "affront to the judicial process" to let the city only now intervene in a case that started nearly 18 months ago.

"The city chose to sit on the sidelines amidst all the litigation activity that has already occurred while continuing to invest millions of dollars in taxpayer funds in the development of a casino that it has known all along will never open if the (Argosy's) legal claims are successful," Penn said in briefs.

"If the city is facing any "emergency" at all, it is the result of its own calculated decision to risk funding the Hard Rock development, despite the pendency of the (Argosy's) legal challenges, and not the result of the stay order the city seeks to attack."

The Supreme Court instructed the district court to determine if it had the authority or jurisdiction to stay the Hard Rock license while Hard Rock developer SCE Partners was not a party to the IRGC judicial review case.

At the Jan. 30 hearing, District Court Judge Eliza Ovrom is scheduled to hear oral arguments from attorneys for the IRGC, Penn and SCE Partners.

In its request to Ovrom to participate in the hearing, the city argued its interests are not adequately represented by other parties in the case.

The city has pledged $22 million in tax-increment dollars to help finance parking and other infrastructure for the Hard Rock venue at Third and Water streets. As of Jan. 3, $11 million had been paid.

Repayment of the city's long-term debt for the project is contingent on increased property tax valuation of the Hard Rock property. SCE has agreed to a minimum $51 million assessment, effective Jan. 1, 2015.

The city has also handed over several city-owned parcels and alleys for the project, torn up and replaced streets and alleys, and removed and relocated public utilities.

Under the Supreme Court order, the district court has until Feb. 15 to render a new ruling on the Hard Rock license.

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