As a result of the unconstitutional and illegal award of the Woodbury County license to Sioux City Entertainment and the unjustified non-renewal of Argosy’s gaming license, the Argosy has requested the courts issue a “stay” of development of the Hard Rock Casino.
FINALArgosy STAY Petition9-16-13 (2).pdf
2013 09 16 Belle's Motion to Stay (Hearing Requested) (02019108).pdf
2013 09 16 Belle's Brief Support of Motion to Stay (02019109).pdf
MRHD misleads the people of Woodbury County
Wow, where do we start with this one? There’s just a whole heap of information that MRHD president, Mark Monson, seems to be leaving out of his story and its yet another opportunity for us to get the truth out and set the record straight.
As you may recall, Argosy submitted a request for a third party receiver to hold and distribute the 3% of our revenues which we have, up until May, submitted to MRHD per our operating contract. You may also recall that MRHD has denied having any contract with us, which led to our request to the court to appoint a third party receiver instead. MRHD claims that under statute that they are owed this money. They are wrong. Under contract they are owed the money and since they don’t acknowledge our contract they shouldn’t receive the money. Iowa law simply requires that “a” qualified sponsoring organization (QSO) receive a portion of revenue from a gambling boat – it doesn’t say that MRHD is entitled to it. Any QSO could receive and distribute the dollars from Argosy – it doesn’t have to be MRHD. We’ve said it before, MRHD can’t have it both ways. You can read our response to MRHD’s response here.
It’s been interesting reading MRHD’s response to our request to the court as well as their responses in the media. There’s just so many blanks to fill in and misinformation to correct, we hope you’ll stay with us as we describe the real truth behind MRHD and some of their claims and actions.
In a June 23, 2013 Sioux City Journal article, MRHD president, Mark Monson ponders, “It’s unfortunate we have to spend it [money on legal representation]. On the other hand, who filed the lawsuit?”
Great question, Mark.
We’d like to point out (yet again) that MRHD was the first to file suit against Argosy in January 2012 well before we ever responded to their breach of contract. In 2011, MRHD’s legal costs skyrocketed from $11,641 in 2010 to $50,795 in 2011. Yet, no lawsuit existed. MRHD started the lawsuit war, not Argosy. We call on Sioux City media to include this fact in any of their reporting of these legal matters in the interest of fairness and full disclosure.
What is even more interesting is that the Journal notes that in 2012, MRHD paid law firm Lane & Waterman of Davenport, Iowa $244,334 in legal bills. Yet, the firm, to our knowledge, is not representing MRHD in the lawsuit brought by Argosy. If that’s the case, what are they getting paid for? Was he paid to work to get rid of the Argosy and replace us with a new operator? If that is the case, is that the best use of funds intended for community and charitable causes?
And in case you’re interested, the attorney from Lane & Waterman, Curt Beason, is the same Curt Beason who has been advising MRHD in its development with Hard Rock, and the same attorney who was charged for his part in funneling illegal campaign contributions to Governor Chet Culver’s re-election campaign on behalf of Peninsula Gaming. Peninsula Gaming Chief Executive Officer at the time, Brent Stevens, was subject to the same charges in the same case. Brent Stevens is now financer/owner of the Hard Rock project in Sioux City.
A Quick Glance at MRHD’s Giving Practices
The graph above demonstrates exactly how much Argosy-generated money MRHD has “passed through” to the community since 2008 and approximately how much of the community’s dollars they are sitting on today. Of the nearly $9.4 million provided to MRHD by Argosy from 2008 to what is publicly known for 2012 and 2013 through MRHD’s website and IRS filings, here’s a quick breakdown:
The graph is only a quick representation of the dollars distributed and undistributed.
If you don’t own anything and you don’t really do anything, then what exactly are you getting paid for?
MRHD president Mark Monson stated that MRHD, “employ[s] no one. We own nothing” in a June 23, 2013 Sioux City Journal article. Click here for the article. If that’s the case, then why are Mr. Monson and three other board members receiving compensation in their capacity as board members?
Since 2008 MRHD board members Mark Monson, Larry Jensen, Bruce Miller and Ron French have received compensation of $1,200 each, each year. You can view MRHD’s 990s for yourself here. Assuming that they received the compensation in 2012 (their tax returns have yet to be filed), that’s over $20,000 over a 5-year period! That’s more than many organizations and cities have received over the same time frame.
A complete list of organizations that receive MRHD money can be found at www.hollywoodcasinosiouxcity.com.
MRHD's Resistance to Belle's Pet for Appt of Receiver (02016494).pdf
Belle's reply in support of petition to appoint receiver (02016657).pdf
Once again the Sioux City Journal gets its facts wrong, using sources who are intent on bending the facts instead of coming clean with the truth regarding the ouster of Argosy from the Sioux City community.
The Journal reports in its June 19, 2013 article that, “Attorneys for MRHD filed motions last week to quash or modify the subpoenas on grounds they are ‘overly broad and unduly burdensome,’ there are no limits on time or scope, and the materials are ‘privileged and/or protected by the work product doctrine’.” Yet, what MRHD… we mean, the Journal… doesn’t tell readers is that over 100 pages of documents from MRHD board member David Bernstein have in fact been turned over to Argosy lawyers with more apparently on the way.
The documents, received as a result of the subpoena of Mr. Bernstein, provides further evidence that MRHD clearly broke its exclusivity clause in its contract with Argosy as early as September 2011 by meeting with other operators in the state and even seeking out land to purchase for a potential new land-based casino.
Read the release below...
The Journal Gets it Wrong.pdf
Other Opertors-Land Options.pdf
Governors Office Emails.pdf
Other Operators 2.pdf
CONTACT: Karen Bailey 610-401-2914
Asks Court to Appoint a Third Party to Receive and Hold or Distribute Community Funds
SIOUX CITY, IA (JUNE 10, 2013) – Argosy filed a “Petition for Receiver” in Polk County Court today. The purpose of this petition is to request the court to appoint a third party “receiver” to receive and hold or distribute the revenues the Argosy currently generates for the community and has, up until today, turned over to the Missouri River Historical Development (MRHD).
Argosy cites in the petition the ongoing dispute over whether a contract exists between MRHD and Argosy. Argosy asserts that it does have a contract with MRHD, signed through March 2015 while MRHD disagrees.
The purpose of a third party receiver in a case like this is to remove the property in question – in this case the 3% of revenues or approximately $1.8 million annually – from the disagreeing parties and to put it with a third party until the matter is resolved. The contract dispute between Argosy and MRHD is scheduled in Polk County Court for April 2014.
“We feel it is important and in the best interest of the community to make this request of the court. It is hypocritical of MRHD to dispute the existence of our contract yet still demand the monies from Argosy – they can’t have it both ways,” explains Karen Bailey, Vice President for Public Affairs for parent company, Penn National Gaming. “It is also our intention to do everything possible to ensure these dollars go to the community as they are intended and not to support a legal war chest or the development of the Hard Rock casino which is already draining significant dollars from community organizations.”
A copy of the petition can be found at www.hollywoodcasinosiouxcity.com.
2013 06 10 Petition for Appointment of Receiver (02016037).pdf
Posted on www.kcautv.com
News, Weather and Sports for Sioux City, IA: KCAU-TV.com
Osceola, IA (KCAU) - The Iowa Racing and Gaming Commission has decided not to act on a request by Penn National Gaming Inc. to reconsider it's April 18th decision to give a casino license to Hard Rock Casino.
The IRGC granted Sioux City Entertainment the license to operate a land-based casino in Woodbury County. Penn Gaming had filed the request for reconsideration, saying the commission had broken state laws and procedures.
Mark Weinhart, who was representing Penn, claimed the commission had violated the casino operator's right to due process. Weinhart said the matter should have been brought to court to begin with, allowing Penn the opportunity to defend their right to have the sole bid for the land-based casino.
Weinhart also said the commission broke state statutes that say a gambling license can only be replaced by a matching structure, meaning a riverboat casino could only be replaced by another riverboat casino. He claims the only reason this became an issue is become someone decided riverboats became unpopular.
Weinhart went on to argued that the commission allowed Sioux City Entertainment to make changes to their original proposal. He asked that for these reasons the commission should reverse their decision and allow Penn to make a sole bid for a new casino.
Despite Penn's efforts to persuade the commission, no motion was made to reverse the decision.
Before the discussion began, the commission unanimously voted to deny all proposals that were not chosen for the land-based casino.
Once again we present to you some additional emails we received as a result of a freedom of information act request. This time its Mayor Scott talking about Argosy’s corporate officials to MRHD Board Member, Dave Bernstein and vice versa.
We get it; Mayor Scott doesn’t like us much. We still are a little puzzled, given our longstanding good relationship with the City and the community. Even former Mayor Hobart advised the Iowa Racing and Gaming Commission (IRGC) of this fact during the public hearing in March. But, we found out that we weren’t alone. He and MRHD board member David Bernstein had plenty to say about other people behind their backs.
So beyond calling Penn National officials “dips**t” and “moron” in emails with MRHD board member, David Bernstein (emails dated May 4, 2012 and June 8, 2012 – while were all supposed to be negotiating in good faith), he also makes fun of another constituent who appears before the council (unrelated to the gaming matters). In an email to David Bernstein, the conversation goes like this,
“Speaking of personnel, your pigeon loving truck driver was a hoot at our last Council meeting.”
“Oh shit who was it?”
“It was a Gunsolley and he of course was more than a little of [sic] balance but should we expect anything less than that. I am sure you need to fix the exhaust on his truck because he obviously has sucked too many fumes.”
“but those trucks run so much faster when you use the exhaust to directly heat the cab. not funny.”
Nice guys, huh?
But then there is the email Mr. Bernstein sends to Mayor Scott on April 24, 2012 the morning after council held a closed session, likely about the negotiations with the Argosy and our land-based plans. Apparently, Councilwoman Rhonda Capron didn’t get the talking points following whatever went on behind closed doors as Mr. Bernstein notes,
“So after you closed session last night, Rhonda I guess was on Open Line this am talking about the casino and MRHD. heard about it from another MRHD member, said her comments were full of lots of misinformation etc. This doesn’t help us one bit, and probably hurts us. can you please find a way to stop this? thanks and sorry…”
Who was Ms. Capron’s comments hurting? When she couldn’t come up for a good answer as to what happened to the site the Argosy was offered as a land-based option? Or, when she said that the convention center would be her preference for a land-based casino because parking and hotel already exist? We’re not really sure what her comments were that Mr. Bernstein took issue with. None of us probably will know the real story since the conversation took place behind closed doors and in closed session with City Council. It’s important to note that this took place on April 24, 2012 – when MRHD, Argosy and even the City were supposed to be negotiating in good faith. We have asked KSCJ for permission to re-post the audio file from Open Line but to date have not received that authorization. Interested parties can contact KSCJ/Powell Broadcasting directly for a copy of the show’s April 24, 2012 recording.
Then there is MRHD board member David Bernstein’s comments about local businessman, Lew Weinberg (owner of the Warrior Hotel). In emails between him and Mayor Scott, Mr. Bernstein notes regarding a potential other operator deal that,
“if john involved way more interesting as Lew at this point i don’t think can close a deal on something like this. I really like the guy but so all over the map.”
Given the earlier email references in that same string, we believe that the “john” Mr. Bernstein is referring to is John Gleeson of Klinger Construction and executive committee member of the Siouxland Initiative.
However, our favorite is what Mayor Scott had to say about Bob Knowler, the current board chairman of the Hollywood Casino’s QSO partner – the Greater Siouxland Improvement Association. In June 2012, Argosy announced it had partnered with a new QSO after talks and negotiations fell through with their existing QSO, MRHD. It just shows some of the intimidation tactics used against Argosy and some of its allies, including vendors. On June 6, Mayor Scott emails MRHD board member, David Bernstein,
“It appears they [Argosy] must be close to a deal with another non-profit. What a bunch of jerks.”
Mr. Bernstein responds,
“or thinking they should start talking to one. rumor had it, very minor rumor, that Knowler was up to something.”
Mayor Scott responds (referencing Bob Knowler),
“I will burn his ass if he does”
Mr. Bernstein then says,
“who Knowler? Wonder who else is with him? can we sell tix somehow and make some money, bring Gann [retired boxer] out of retirement somehow. State Steel is helping fund this type of activity with repeated red light violations, only 4 this month.”
Bob Knowler was part of the alternate QSO Argosy proposed to partner with, called Friends of Woodbury County. As a result of intimidation by local officials, some of the participants in that early board removed themselves from consideration. Today, that organization is Argosy’s proposed partner, Greater Siouxland Improvement Association. Mr. Knowler is still the chairman of the board.
moron and dipshit.pdf
Mayor to MRHD board member: “I’m a Hard Rock Café Guy”
Despite “recusing” himself from any casino-related developments in December 2012 Mayor Bob Scott was in fact very active in the land-based casino process. Seems like when the deals were finally done, the mayor then decided to step out of the picture. Click here for the December 2012 article.
Yesterday, Mayor Bob Scott told KSCJ radio host, Woody Gottburg, that he and the City had remained neutral throughout the casino selection process. Emails retrieved from a freedom of information act request show otherwise.
When MRHD and PENN were supposed to be working toward a resolution to their impasse, an email references a discussion between Mayor Bob Scott and another potential casino operator for the Woodbury County license (Peninsula Gaming – formerly owned by Brent Stevens who is now owner and financer of the Hard Rock project). MRHD Board member David Bernstein is copied on the email from Mayor Scott to local businessman and owner of the Warrior Hotel, Lew Weinberg.
Lew Weinberg to Mayor Bob Scott:
“If the City is wanting something better or different than Penn is proposing, MRHD, City and say Peninsula are going to have to go hand in hand to IRGC and say , we want to do the Warrior Concept OR whatever other concept is agreed on... Also, I need to know from you, preferably after we can talk one on one, what Role you feel comfortable pushing as Mayor…”
Mayor Bob Scott responds:
“I had a nice talk [referring to either an official with Diamond Jo casino or a Peninsula executive] but without the IRG giving their blessing he is not willing to move at this time. Working with Dave to see where we go next."
Mayor Scott emails MRHD board member David Bernstein,
“Do you believe Lew and Gleeson are close to a deal”
Even though the City repeatedly told us that we had to negotiate independently with them and MRHD, numerous conversations took place between David Bernstein and Mayor Scott. Including Scott’s misrepresentation of Penn’s proposal for a land-based facility:
MRHD board member, David Bernstein, asks Scott whether or not we put a minimum assessed value over the life of our requested TIF (tax increment financing). Scott replies,
“no of course not.”
“agree to a baseline property tax value sufficient to amortize the TIF bonds. We would agree in the development agreement, as staff has indicated, to not appeal any valuation while bonds are outstanding.”
A subsequent email, on April 15th, from David Bernstein says,
“assumed but wanted to confirm. They may have as well have fluffed their gross up to $200mil and said mrhd will get 300% more.” Mayor Scott responds, “Council is on board.”
But what was the City Council on board with?
Email from city manager Paul Eckert asks Mayor Scott in an email,
“Would it be useful or necessary to have Dave B [referring to MRHD board member David Bernstein] in Closed Session regarding Penn? Dave offered. We will have their attorney present.”
Emails between Penn officials and MRHD board member David Bernstein, regarding an agreement between Argosy and MRHD, are forwarded to city officials and would be
“for discussion purposes at the meeting at 2p.”
Mayor Bob Scott asks MRHD board member David Bernstein if there is any reason for him to attend the upcoming IRGC commission meeting. David Bernstein replies,
“to lay down the law? thats [sic] a good reason….”
As the summer of 2012 progressed, the negotiations began to include the City’s renegotiation of the Argosy’s agreement for the riverboat. Those negotiations, according to the tone of the emails received from the freedom of information act, were not in good faith and were not independent of MRHD’s supposedly separate ongoing negotiations with Argosy:
Bob Scott sends the following email to city council members:
“I will never ask you for more authority than I should but on this I am begging you to let me negotiate the extension of the lease on the river. I really have grown to strongly dislike everything about these guys and want nothing more than to stick this up there [sic] rear after their shenanigans yesterday.”
Councilwoman Rhonda Capron responds,
“Bob…go for it and kick ass”
Mayor Scott forwards his original email to MRHD board member, David Bernstein saying,
“God I hope I get to negotiate their lease extension.”
Yet publicly, the City stated they supported simply extending the current lease. What was there to negotiate and to negotiate so seemingly aggressive?
So much for independent negotiations…. Mayor Scott instructs city attorney, Nicole Jensen regarding the Argosy’s lease extension,
“Please visit with the MRHD attorney to make sure we are all on the same page.”
Once again, we remind readers that on Tuesday, May 21, 2013, Mayor Bob Scott said on KSCJ that he and the City remained neutral in the casino issue. Emails received from the freedom of information request show otherwise. These are just a sample of emails related to the mayor’s involvement in the Hard Rock proposal.
MRHD board member, David Bernstein asks Mayor Bob Scott to join him and what seems to be a group of people at Eldons that same evening. We can suppose it was a group related to the Hard Rock developers since Mayor Scott responds,
“I am a Hard Rock Café guy so this is good for guys like me.”
KMEG14 reported this in its article, Sioux City Hard Rock Casino?:
“The plan even got the support of Sioux City’s mayor. ‘More than a Friday night gambling hall, we want something that will bring people to our community,’ said Mayor Bob Scott. ‘And certainly this proposal does that.’”
You can read the full article here.
In an email from Walt Fales of Warner Gaming to several people including city staffer Robert Padmore, he speaks to a visit to Sioux City – what appears to be for the purpose of examining land parcels as well as to study the local gaming markets. During that trip, Hard Rock officials met with Jeff Hanson (Community Development Ops Manager for the City of Sioux City) and a colleague that were to be “dressed down.” At the end of the itinerary, Mr. Fales notes,
“Also, please be sure you have a well-rehearsed cover story for each situation as this group will likely stick out, and we are very close to going public…”
In an email from city manager, Paul Eckert, to Walt Fales of Warner Gaming, Mr. Eckert responds to what seems to be some final deal points between Warner Gaming and the City of Sioux City. On point number 2, discussing Warner’s need of the City to acquire a privately held parcel on their proposed land area, either Mr. Fales or Mr. Eckert note the following,
“Given the potential publicity of our combined partnership likely on Oct 1st, we would need to move very quickly in this regard.”
The Merriam-Webster Dictionary defines “partnership” as:
This is far from the “neutral” position Mayor Scott is portraying himself as today.
In November 2012, each of the Woodbury County applicants had to appear before the IRGC to discuss their financing. The City attended on behalf of the Hard Rock developers but did not, to our knowledge offer the same to Ho-Chunk (who was also seeking taxpayer financing) or to Argosy who was not asking for any taxpayer money.
In an email, Walt Fales of Warner Gaming suggests the following in an email to city staff,
“… I believe all that is necessary is for a representative of the City to be present and referenced when we refer to the City LOU/Development Agreement. At worst case, the City rep could simply issue a verbal statement that suggests that the City is committed to providing TIF financing to the applicant subject to a successful award of the IRGC license.”
Following the City’s appearance at the Hard Rock’s financing presentation, Mr. Fales sends the following thank you email,
“Thank you for attending the IRGC meeting this morning. It was greatly appreciated by MRHD, Bill, and I. In speaking with the commissioners and staff afterwards, they too were appreciative of the City’s support and presence at the meeting which bodes well for us and a Downtown facility.”
Yet someone from the City appeared before the IRGC on Hard Rock’s behalf despite concern expressed by city manager, Paul Eckert suggesting that the City should not be at the meeting. (Email dated November 6, 2012). What changed?
As mentioned in our previous communication, “He Was Against it Before He Was For It”, the Hard Rock developers were given a number of sweeteners by the city despite even initial concern by Mayor Scott and city staff. Additional concern was also expressed about the City’s indemnification for Hard Rock in the ongoing legal battle between Argosy and MRHD and potential legal matters between the City and Argosy (of which, to date, none exists).
In an email from Paul Eckert to Walt Fales, Mr. Eckert notes,
“Please be aware the indemnification is highly problematic for our internal and various external legal assets to sign off on. We will continue to work on it. I do not want to slow down the LOU…. We will have it in a side letter.”
What were the problems expressed by the City’s legal team? Who made the decision to override those concerns since the indemnification was eventually put into the Hard Rock’s development agreement with the City?
You can view the emails quoted in this document as well as emails between Warner Gaming and city staff regarding the various costs the city picks up as a result of the Hard Rock proposal. These emails show that Mayor Bob Scott was far from neutral as it relates to the casino proposals for Woodbury County.
You can also find the terms of the City’s development agreement with the Hard Rock developers at our website: www.hollywoodcasinosiouxcity.com/moving-forward to find out more about what the City has agreed to.
Bernstein Closed Session.pdf
City Giveaway to Warner.pdf
Hard Rock Guy.pdf
IRGC City Finance Meeting.pdf
Mayor Scott Negotiating.pdf