Nevada company buying Iowa casino, track for $165 million in deal

Wednesday, Sept. 1, 1999 | 11:33 a.m.

LAKE TAHOE -- Iowa West Racing Association, owner of the Bluffs Run Casino in Council Bluffs, Iowa, said today it agreed to a deal with Harveys Casino Resorts for the management of the operations and the sale/leaseback of the greyhound track and land-based casino.

Harveys said it will pay IWRA, the nonprofit license holder of Bluffs Run, $165 million for the property.

Harveys will also take over management of the casino, which requires approval from the Iowa Racing and Gaming Commission.

In return, Harveys will receive management fees and lease income generally equal to the ongoing cash flow from operations.

All Bluffs Run employees will be offered employment when the transaction is completed. Harveys said it believes employee continuity is important to the property's continued success.

"This is an excellent opportunity for us and the great team of employees at Bluffs Run. We are expanding our operations in the heartland, continuing to enhance economic development in the region, and supporting the efforts of one of the largest charitable foundations in the area," Chuck Scharer, Harveys chief executive in Lake Tahoe, Nev., said in a statement.

Harveys currently operates a riverboat casino and hotel in Council Bluffs, which it said has been the top performing riverboat in the state for the past 36 months. As part of the transaction, the riverboat casino will extend its sponsorship arrangement with IWRA until at least 2010.

"The casino's current manager, Alabama Iowa Management, has served us well since 1984. Harveys is a recognized leader in the gaming industry and a leading corporate citizen of our community. Frankly, this is a way to increase our support for charitable endeavors and community development through the establishment of an endowment," said Chuck Smith, IWRA president.

Harveys has served the Omaha, Neb., and western Iowa market since January 1996, when it opened its riverboat casino.

Harveys also owns and operates Harveys Resort & Casino at Lake Tahoe and Harveys Wagon Wheel hotel-casino in Central City, Colo.

The Iowa West Racing Association was formed in 1984 and was named the casino license holder, a requirement of Iowa state law. The IWRA board of directors is comprised of community volunteers.

In 1986, the Bluffs Run greyhound facility opened with a total capacity of 10,000 including clubhouse seating for 1,200 people. While greyhound racing has declined, the addition of a casino at the Bluffs Run location has kept annual crowds at around 4.25 million people, Harveys said.

The Racing Association is part of the Iowa West Foundation, which was created in 1994 to provide grants for the betterment of living in the southwestern Iowa and eastern Nebraska area. It is one of the largest charitable foundations in Iowa and is funded by the three casinos in Council Bluffs, Harveys said.