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Note: This material represents a composite of emails sent by Bradley Franzwa to Nicholas Johnson, and presented here with permission. On the order of 85% of the material is from one email, and reproduced virtually word for word. Some of the final paragraphs were added from other Franzwa emails, and there have been a handful of minimal editorial changes for clarity. -- N.J.

Since this evaluation, the leaders of Riverside have decided to ask the voters this November to approve a city hotel/motel tax of 7% (in addition to 5% state tax plus 1% local SILO tax).  This is the same hotel tax rate as CR and IC.  I assume the voters have to approve the issue since it is a tax.  It is interesting to note that this tax was discussed well before last year and promoted by the casino to city leaders as a way to collect more revenue from visitors.

However, a newspaper article by [Mary] Zielinski indicated that the tax would not be in place by the time the casino opens.  Why? She also noted that the tax was going to be implemented in January 2007 since other hotels may be interested in Riverside.  She noted that this tax was meant for them. What about the casino?  I ask again, “Who is running that town?”
 
The city of Riverside should have held a special vote this summer so that the tax could have been in place by the time the casino opens.  Assuming we use Mr. Kehl’s estimate of $3 million in hotel/motel tax revenue per year, then four months of lost hotel tax revenue would translate to $1 million in lost outside tax revenue to the city of Riverside.  The city leaders will say, “We simply wanted to wait until a regularly-scheduled vote” to ask for the hotel tax.  But the cost of a special vote for the city would be less than $1000.  Why not schedule a special vote now and start collecting the tax as soon as the casino hotel opens?
 
My numbers are not as optimistic as Mr. Kehl’s.  I would estimate that 204 rooms will be occupied 70% of the time for thos four months.  I called the casino, and their nightly rates are $160 weekday/$200 weekend/$230 football weekend plus taxes -- which happen to be the highest hotel rates in the area.  So, 204 rooms x 120 days x 70% occupancy x an average daily rate of $175 produces a grand total of $2,998,800 in taxable revenue.  The 7% tax, if implemented earlier, would have brought the city of Riverside $209,916.  As I see it, the City should have passed this tax before now -- even if a special vote costing $1000 had to be held -- since $200,000 is a lot of money for a town that refuses to give more than $4,640 to Kalona for the use of its public library.

By the way, these numbers indicate that the highest likely amount the City of Riverside could contribute to the rain forest from the hotel tax would be $600,000 per year, assuming all of it would go to the rain forest.  Not quite the $3 million Mr. Kehl pledged to the rain forest on behalf of the City.  Perhaps he meant that total was also an amount collected in a 10-year period as well.  Why has no one questioned these numbers?

Then there is the Foundation story; the issues surrounding its formation and membership. The public won’t like it that the Foundation money is once again being pledged to the rain forest. This money was supposed to go to the schools, Trekfest, library, water park, etc.  Why this is especially intriguing is that all of the casino projections were based on having a Cedar Rapids location.  The casino has denied it, but I believe that the casino in Riverside won’t bring in the same dollars that a Cedar Rapids location would have.

Has Riverside really raised the required $25 million to bring the rain forest to town?  I am sure that the rain forest was hoping for cash up front and not $1,000,000 per year for 10 years from the casino.  The donation of $2M from Mr. Kehl's parents would likely be large enough for some type of naming rights on a part of the project. Is Oman really going to be able to start spending the $50 million federal money again based on fuzzy accounting like that?
 
Unfortunately, the two projects -- casino and rain forest -- have become one, confusing everything. If the rain forest really is a dead deal, my goal would be that no more tax dollars are spent in the process of its dying.

On the television news reports [July 25] the Mayors or Councils of Riverside or Pella were not the ones extending support for the rain forest.  The reporters went straight to the developers and casino investors for comment.  Those people then spoke as if they were the leaders of the towns of Riverside and Pella.  It is interesting that neither town has the land nor the money to be chosen as the site, yet Omen says they are the chosen "finalists."

The news also hinted that the Riverside project funding assumed additional City taxes would pay for the project.  The options were a hotel/motel tax, a user-fee tax, or a local-option sales tax.  The hotel/motel tax would make the most sense. But the City of Riverside has already promised its residents that certain earmarked projects were to be funded with that tax.  In terms of rain forest income, for the City to transfer the proceeds from a user-fee tax to the rain forest would have no different outcome than simply raising the entry fee.  Riverside already has a SILO tax, and its residents certainly aren’t about to approve funding the rain forest with an additional sales tax.

I wish the headlines would state more correctly, “Rain Forest Left Choosing Between Casino and Developer as Final Sites After Municipal Interest Disappears.”.