Illinois: Peoria council rejects Par-A-Dice casino settlement with Boyd, leaving city poised for legal fight

The Peoria City Council voted Monday to reject a proposed settlement with Boyd Gaming, operator of the Par-A-Dice Hotel Casino, keeping the city positioned to contest a planned $160 million redevelopment of the gambling venue in neighboring East Peoria.

The decision followed a lengthy special meeting and ended in a 5-5 tie vote, with one council member absent, which was sufficient to defeat the agreement. The proposal would have provided Peoria with 2.25% of the redeveloped casino’s reported adjusted gross revenue each year, estimated at about $1.8 million.

“I am in favor of fighting this out,” said city council member John Kelly, who voted against the settlement. Mayor Rita Ali, who supported the agreement, said she was disappointed by the outcome. “I can’t help but to say I’m disappointed,” she said, as reported by WCBU. “This was a rare opportunity for us.”

The proposed payment would have been in addition to the existing 50-50 split of gaming revenues between Peoria and East Peoria under a 1991 intergovernmental agreement. That agreement also requires any land-based casino in the region to be built in Peoria, a provision that has become the central point of contention.

Boyd Gaming, which owns the Par-A-Dice, has proposed what it calls a riverboat modernization. The plan would replace the existing riverboat casino with a new facility constructed on a 1,000-gallon man-made basin filled with water drawn from the Illinois River, rather than floating directly on the river itself.

“I wish we could get to a point where we all agreed that a riverboat actually floats on a river, and that’s undisputable,” said council member Tim Riggenbach, who also opposed the settlement.

Riggenbach was joined by Kelly, Zach Oyler, Kiran Velpula, and Alex Carmona in voting against the agreement. Council member Denis Cyr did not attend the meeting. Riggenbach argued that Boyd assumed the obligations of the 1991 agreement when it acquired the casino.

“Boyd is the second owner of the Par-A-Dice, let’s not forget that. They bought it after the intergovernmental agreement was put in place. If they didn’t realize the covenants that are involved with that, that’s on them, not on us,” he said. “I’m flabbergasted that this is such a point of contention.”

Boyd outlined its redevelopment plans during a December meeting of the Illinois Gaming Board. The council vote came ahead of a scheduled gaming board meeting on Thursday, at which a decision on the proposal could be announced.

City Attorney Patrich Hayes said the city faces significant uncertainty. “It was clear to us, in speaking on many occasions with the administrator of the [gaming] board, that there’s a significant risk that the board would approve Boyd’s proposal,” he said.

Hayes warned that a legal challenge could take three to four years and cost millions of dollars if appealed to the Illinois Supreme Court. “There’s a significant chance that the City of Peoria could successfully challenge this proposal. However, that outcome wouldn’t create any requirement on Boyd or the Par-A-Dice to redevelop their property in any way,” he said. 

Supporters of the settlement said avoiding prolonged litigation would have benefited the city financially. Council member Mike Vespa said, “If we’re going to avoid spending all those attorneys’ fees and waiting years to even begin building a casino, whether here or there, I’m more inclined to take it.”

Carmona said rejecting the agreement could lead to better terms. “I think it’s important for us to stand up and to get more out of this deal than what we’re getting now,” he said. 

Ali said even a court victory would not guarantee a casino for Peoria. “It just means we were right,” she said. “That’s not a win, for me.”