Prairie Meadows Reviving $25 million Expansion Plan
Updated: Friday, June 21, 2002 2:49 PM
Posted: Friday, June 21, 2002 2:49 PM
Prairie Meadows is reviving a $25 million expansion plan on the heels of a state Supreme Court decision that drastically reduced the racetrack's gambling taxes, according to the Des Moines Register
The plan could include a multipurpose banquet hall and concert auditorium, a buffet area, restaurant, and sports bar, according to Robert Farinella, Prairie Meadows' president and general manager.
"From the standpoint of planning purposes, our board would be interested in having that back on our radar screen," Farinella told the Iowa Racing and Gaming Board on Thursday. "That is something that we are interested in completing, should we have the funding ability."
The track has not set a timetable for the expansion or estimated the cost.
An escalating gaming tax had been stymieing the expansion plans. Prairie Meadows was set to pay 32% of gross revenue from its slot machine operations this year and an additional 2% each year through 2004 when the tax reached a cap of 36%. By comparison, riverboats running the same machines have been paid a set 20% tax. The racetrack sued state for relief and was rewarded with ruling by the Supreme Court last week that said the casino tax for racetracks was unconstitutional. The ruling now entitles Prairie Meadows to the 20% rate and maybe a rebate from the state since the ruling is retroactive.
The racetrack will now have enough money to consider pursuing its long-range master plan, which includes the building expansion, Farinella told the Register
. If Prairie Meadows lost its suit, the track would have no money for capital improvements beyond replacing carpet, roof repairs, or parking lot maintenance.
The battle may not be over. Assistant Iowa Attorney General Jean Davis told state regulators Thursday that her office is still considering its options and may ask the Supreme Court to rehear the case. The Iowa Legislature could also affect the plans by raising the casino taxes for both racetracks and riverboats, which has been discussed, according to the Register
Farinella addressed the construction plans while the racing and gaming commission considered a new eight-lease between Polk County, which owns the racetrack property, and the Racing Association of Central Iowa, a non-profit organization that operates the track. The commission approved the lease on a 4-1 vote.
The lease, which begins in January 2003, requires Prairie Meadows to pay Polk County $15.6 million annually in rent, plus a share of profits up to $4.4 million a year for the first five years. The track only needs to pay rent for the last three years of the lease unless purses are increased. If purses are increase, then the racing association must pay the county an amount equal to the increase.
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