Profits at Prairie Meadows. Firearm at airport. No more IMAX dome. Historic preservation grants.10/5/2022
“We are having a record year,” said CEO Gary Palmer at the September board meeting of Prairie Meadows Casino and Hotel.
“When we did our budget, we thought the inflation factor would hit us much earlier in the year,” said CFO Elaine Castelline. “So far, our customers are still gambling at a similar rate to last year.”
Through July, Prairie Meadows garnered revenue totaling $156.1 million with a net revenue of $148 million, exceeding their goal by $12 million. Of that total, the casino generated $136.7 million. For every dollar Prairie Meadows brings in, 88 cents come from the casino.
Payroll expenses were about $2 million less than budgeted, even when taking Palmer’s $1.4 million salary and bonus into account. This was due, in part, to health expenses decreasing among employees, Castelline said. Prairie Meadows is self-insured.
Other upcoming expenses for the facility include a delayed $12 million hotel remodel expected to conclude through the spring, plus an $800,000 exterior painting project and $1.4 million escalator replacement.
In other business, the board plans to discuss and vote on a $5 million contribution to the Des Moines International Airport expansion project. Kevin Foley, the airport’s executive director, presented the request to the executive committee and will address the entire board at their next meeting. The $5 million would be donated outside of Prairie Meadows’ three grant programs.
“We are real firm believers in keeping the grants within the grants,” Palmer told the board, “but we’ve made exceptions through the years for economic development.”
Palmer recommended paying the $5 million over three to five years. Polk County and the City of Des Moines are each giving $10 million to the project that is currently $155 million short of its goal, Palmer said, adding that the county might partner with the casino to match their $5 million contribution.
The board meeting concluded after a closed session to discuss the succession plan of Palmer, who recently postponed his retirement and renewed his contract through 2026. …
Speaking of the Des Moines International Airport, TSA officers intercepted a handgun before it was brought onboard a plane last month. A routine X-ray screening revealed the pistol stowed in carry-on luggage, loaded with six rounds — none in the chamber — and without a safety. Law enforcement issued a citation and confiscated the gun. The incident marked the 11th firearm detected at the Des Moines airport in 2022, just three-fourths of the way into the year. A total of nine firearms were discovered at security checkpoints in 2021.
TSA policy states that passengers “may transport unloaded firearms in a locked hard-sided container as checked baggage only.” Firearms and ammunition must be declared, and their containers must “completely secure the firearm from being accessed.” Carrying a loaded handgun into a security checkpoint could impose civil penalties of nearly $14,000, with a typical first offense falling around $4,000. …
The iconic Blank IMAX Dome Theater at the Science Center of Iowa (SCI) is permanently closed, after its status had remained in flux for more than four years. Heavy rains in June 2018 inflicted severe flood damage that rendered the facility “a total loss,” SCI President and CEO Curt Simmons told CITYVIEW. A failed storm drain caused water to disperse broadly across the whole ceiling and rain down across the entire theater, damaging projectors, film, speakers, acoustical material, seating and the dome screen. Repairs would have cost upwards of $3 million.
SCI later filed a lawsuit against its insurance carrier, Philadelphia Insurance Company, claiming underpaid and delayed claims. “The highly technical nature of the equipment in the theater has created complicated settlement negotiations,” Simmons told CITYVIEW in February 2020. The two entities finalized a settlement in February 2022, although details are shrouded under a non-disclosure agreement.
Next, SCI will undergo a capital campaign to renovate the space covering 6,000 square feet, where the IMAX screen had towered six stories tall. The project remains in a “quiet phase,” Simmons said, but leadership is targeting mid-2023 to announce plans.
“Suffice it to say, we will be producing something that is compatible with our high-quality science learning experiences here at the Science Center,” Simmons said. “We’re really excited about the opportunities that the space provides us.”
The remaining IMAX theatre in the metro is located at The Palms Theatre in Waukee. …
The Iowa Economic Development Authority (IEDA) awarded $19 million in tax credits to preserve and transform historic buildings across the state. IEDA had received 23 applications requesting almost $35 million. The 14 awarded projects included four buildings in Des Moines.
The Globe Hoist building, located at 217 E. Second St. in the East Village, was awarded $2.58 million. The 24,000 square-foot building opened as a class A office in January this year, said Jake Christensen, president of Christensen Development. The structure features a sawtooth roofline rarely found in Des Moines. The building was built in 1928 as a factory that built hoists, then machine gun mounts during World War II. It later housed a casket factory. Various nightclubs occupied the building until its purchase for $1.8 million in 2018 by 217 E Second LC, managed by Christensen Development. The total cost of the project was $15 million.
The Des Moines Film Society was granted $1.06 million for its renovation of the Varsity Theater at 1207 25th St. The building constructed in 1916 had an assessed value of $139,000 prior to the project’s start. After serving as a Coca-Cola bottling plant, The Varsity was renovated back into a theater in 1938, one of the oldest art house cinemas in the nation. The Des Moines Film Society announced the renovation and plans to reopen the theatre as the Varsity Cinema in May 2020. A 40-seat micro-cinema was added to the second floor, in addition to the upgraded main auditorium planned to seat 240. The project’s estimated total cost is $5 million, according to IEDA records. The cinema anticipates opening this fall.
A third Des Moines building received $701,739 in tax credits. The two-story French Way Cleaners building was constructed in 1925 at 413 Euclid Ave., about a block from the Highland Park neighborhood. Its original 2,400 square feet expanded to 14,000 over the years, with Hi-Ho Grill operating in one of the commercial bays until 1995, and the century-old dry cleaning business closing in 2018. The $4 million building restoration involves significant environmental cleanup due to its dry cleaning history, said Danny Heggen of DEV Partners. Construction began last September, with completion projected in June 2023. Four residential units will occupy the upper floor, with an unannounced restaurant and brewery coming to the first floor.
Finally, IEDA awarded $479,280 to Benchmark Real Estate Group for its preservation of the Euclid Avenue State Bank Building at 3523 Sixth Ave. The previously vacant structure built in 1917 will be rehabilitated with six commercial bays totaling 8,870 square feet. IEDA records show the project total as $2.16 million.
Project applications for the next round of IEDA awards are due Jan. 9, 2023. More than $20 million is available. ♦
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