Hard Rock Hotel & Casino

Crews work at the Hard Rock Hotel & Casino construction site on Jan. 30. The Iowa Supreme Court has allowed a district court judge to vacate an earlier ruling that suspended the project's state gaming license.

Chris Coates, Sioux City Journal file

DES MOINES | The Iowa Supreme Court has given Polk County District Court Judge Eliza Ovrom the green light to vacate an earlier ruling that suspended the Hard Rock Hotel & Casino Sioux City's state gaming license.

The Supreme Court last month ordered the district court to reconsider District Court Judge Robert Hanson's Dec. 10 ruling that stayed the license pending a final verdict in the Argosy Sioux City riverboat casino's lawsuit against the Iowa Racing and Gaming Commission.

Argosy parent Penn National Gaming Inc. is seeking to overturn the IRGC's April 18 vote that awarded the license to Hard Rock developer SCE Partners and its nonprofit partner, Missouri River Historical Development.

In a ruling Friday, Ovrom decided against reinstating the stay, and found SCE Partners should be allowed to join the larger judicial review case. But she declined to issue a final order "in the absence of express authority from this court to do so," the Supreme Court noted in a three-page ruling Tuesday.

"After consideration, the court remands this matter back to the district court with authority to enter an order vacating the district court's previous stay and to join SCE as a party," the high court said in the order, signed by Justice Bret Appel.

Appel on Dec. 21 granted emergency relief of Hanson's stay after SCE Partners and the IRGC appealed.

Ovrom's ruling clears the way for construction on the $128.5 million Hard Rock project in downtown Sioux City to proceed, and for the venue to open as scheduled in late summer.

Ovrom found a license suspension would have a "drastic" impact on the Hard Rock project, which includes extensive renovations to the historic Battery Building at Third and Water streets and construction of an adjoining 55,852-square-foot structure. SCE has already spent nearly $50 million and has approved dozens of contracts.

Though Ovrom found Argosy would "suffer extreme financial loss" if the IRGC would follow through with its plans to replace the boat with the Hard Rock, a stay was not warranted because Argosy was "not likely to succeed on the merits" of its legal claims against the IRGC.

In her ruling, Ovrom pointed to the IRGC's "broad discretion to regulate gambling and to set the requirements for licensure" in the state.

The five-member commission decided in June 2012 to take bids for a land casino in Woodbury County after growing frustrated with months of failed talks between Penn and its then-nonprofit partner MRHD over a long-term contract that would have included moving from water to land.

In its petition for the district court to review a series of IRGC actions that culminated with the April vote, Argosy claims the IRGC ignored its own rules and violated state laws and the company's constitutional rights.

As part of the Supreme Court order, Ovrom also expedited the remaining schedule for the Argosy's judicial review case.

Final arguments in the case are now set for Sept. 26, with reply briefs due by Oct. 6.

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