Bally’s Chicago secures on line casino financing, unveils recent hotel create

One week after taking possession of the Freedom Center printing plant, Bally’s has secured the wanted financing to supplant it with a $1.7 billion Chicago on line casino complicated on the 30-acre jam in River West.

Bally’s announced a deal Friday with Gaming and Leisure Properties, a Pennsylvania-essentially essentially based accurate property funding belief, to produce $940 million to fund the event of the eternal on line casino.

As well, Bally’s has also finalized redesign of its planned 500-room hotel tower, which has been shifted from north of the on line casino to the south to dwell a ways from adverse metropolis water pipes alongside the Chicago River, pending approval from the metropolis’s planning department.

“We’ve been working grand in the background to revive the corpulent hotel tower for Bally’s Chicago On line casino and totally intend to fulfill the September 2026 opening date as planned,” George Papanier, president of Bally’s Corp., said in a news delivery Friday. “We’re also gay to instruct that Gaming & Leisure Properties Inc. has agreed to finance this whole style in a single section to eventually ship a higher mission in a extra atmosphere pleasant manner.”

The financing package and revised jam idea must peaceable allay concerns expressed by analysts, investors and the metropolis itself that Bally’s didn’t maintain the monetary wherewithal to attain the eternal on line casino.

In 2022, Rhode Island-essentially essentially based Bally’s won a heated opponents to attain Chicago’s first on line casino. The glitzy proposal included an exhibition corridor, a 500-room hotel, a 3,000-seat theater, 10 restaurants and 4,000 gaming positions overlooking the Chicago River.

Bally’s Chicago launched a transient-time length facility at Medinah Temple in September, with plans to delivery the eternal on line casino by September 2026. Nonetheless the percentages against the on line casino complicated being constructed as planned perceived to be increasing by the month this year.

In January, Bally’s announced that the hotel tower would must peaceable be relocated from its designated space on the north waste of the positioning after it was as soon as obvious that riding caissons into the floor would possibly perhaps well ruin municipal water administration infrastructure pipes.

The initial idea known as for a 100-room hotel unpleasant shut to the Chicago River, with a vibrant 400-room tower constructed on high of it within five years of opening the eternal on line casino.

The recent jam idea by create agency HKS switches to a single-section style and flips the on line casino layout, inspiring the 500-room hotel tower to the south of the entertainment complicated, the put it’s peaceable on the river, but a ways from the infrastructure points.

Soo Kim, chairman of Bally’s and founding associate of its largest shareholder, New York hedge fund Customary Total, told the Tribune Friday that securing mission-stage financing for Chicago through a sale-leaseback of its properties has been in the playing cards for a whereas.

“We’re in fact funding an quantity that’s higher than on the origin anticipated, because we’re drawn to finishing the scope of the mission,” Kim said. “It’s a signal of self belief that we’re lining up the money to attain out the extra monumental mission in a single fell swoop.”

Gaming and Leisure Properties has a portfolio of 65 locations across 20 states, alongside side plenty of Bally’s properties. The exchange model entails procuring for, financing and owning the land, then leasing it wait on to gaming operators.

Bally’s expects to take extra than $2 billion during the transactions with Gaming and Leisure Properties, which encompass sale-leasebacks on the Bally’s Kansas City and Bally’s Shreveport properties for $395 million, the firm said. Gaming and Leisure Properties also has a beforehand announced be pleased chance on Bally’s Lincoln On line casino Resort in Rhode Island, which has been adjusted to a decrease label of $735 million.

In November 2022, days after shopping the Freedom Center jam for $200 million, Bally’s executed a sale-leaseback on the property with Chicago-essentially essentially based Oak Street Proper Estate Capital, raising as much as $500 million to succor achieve the eternal on line casino.

As fragment of the transaction, Gaming and Leisure Properties is also shopping the Freedom Center jam for $250 million earlier than style begins.

Lance Vitanza, senior analyst in TD Cowen’s equity compare community, known as the financing and sale-leaseback presents a “very appropriate ” for Bally’s and its investors.

“It goes to peaceable allay alternative concerns about Bally’s asset mix, its leverage, its liquidity,” Vitanza said Friday. “To maintain GLPI coming in and model of underwriting Bally’s exchange idea, no longer much less than for its domestic casinos, it’s surely fundamental.”

Bally’s owns and operates 15 casinos across 10 states. It made its entree into Illinois in June 2021 with the $120 million acquisition of Jumer’s On line casino & Hotel in Rock Island, which it renamed Bally’s Quad Cities.

Concerns about financing the Chicago on line casino mission surfaced in February when Bally’s revealed it desired to bridge an $800 million funding gap to hide final prices to attain the eternal Chicago on line casino as planned.

Some analysts urged a tight credit market and Bally’s debt-heavy steadiness sheet would possibly perhaps well power the on line casino firm to prolong or downsize the eternal Chicago on line casino.

Even Chicago Mayor Brandon Johnson expressed doubts final month, asserting it was as soon as “peaceable to be obvious” whether the corpulent $1.7 billion entertainment complicated would be constructed as planned.

The mission took a serious step toward that purpose with Friday’s financing announcement.

“With keys to the property in hand, the recent financing secured, a jam idea that exceeds the distinctive, and demolition articulate to delivery this summer season, let there be absolute self belief that Bally’s Chicago On line casino and Hotel will at this time come up alongside the Chicago River,” Papanier said.

The metropolis issued an announcement Friday morning echoing these sentiments in the wake of Bally’s financing and refreshed jam plans.

“The City is gay with this style relating the financing and development of Bally’s Permanent Chicago On line casino,” Mayor Johnson said. “We dwell up for reviewing the updated plans and proceeding during the evaluate job with the Division of Planning and Pattern.”

Building what would possibly perhaps be the articulate’s largest on line casino would possibly perhaps well even be mandatory to meeting the audacious monetary goals of every the metropolis and Bally’s.

After a file-breaking Could maybe, earnings fell by 11% final month on the Bally’s Chicago brief-time length on line casino, which generated $10.4 million in adjusted imperfect receipts, in line with data from the Illinois Gaming Board.

Bally’s Chicago admissions, nonetheless, had been up 1% for June to almost 120,000 company, ranking second in the wait on of Rivers On line casino Des Plaines, which remains the busiest and high earnings-producing space amongst the articulate’s 15 casinos, in line with the monthly data.

The brief-time length Bally’s facility properly-known its millionth customer final month, gifting them with a cruise for two and $1,000.

Statewide on line casino earnings was as soon as down almost 4% to $138 million in June, with extra than a million company for the month, in line with Gaming Board data.

Via the fundamental six months of 2024, Bally’s Chicago generated $62.8 million in adjusted imperfect receipts and further than $6.8 million in native tax earnings at its brief-time length River North on line casino, in line with Gaming Board data.

Bally’s was as soon as projected to generate $243 million in adjusted imperfect receipts and $35 million in gaming taxes for Chicago this year.

While the metropolis would possibly perhaps well also peaceable gaze fundamental upside from Bally’s during the graduated wagering tax, which goes up because the on line casino’s cumulative annual earnings will enhance, long-time length development hinges on the planned eternal on line casino on the at this time-to-be demolished Freedom Center printing plant jam in River West.

Final year, Bally’s agreed to pay Tribune Publishing, proprietor of the Chicago Tribune and diversified newspapers, $150 million to vacate the 43-year-historic Freedom Center by July 5 to interrupt floor on the recent on line casino complicated. The Tribune shifted printing operations in Could maybe to the frail Day-to-day Herald facility in Schaumburg, which it purchased for an undisclosed label.

Bally’s took possession of the positioning final week, with vehicles, trailers and the Brandenburg Industrial Service demolition firm constructing shop to delivery up the job of lowering what was as soon as as soon as the biggest newspaper printing plant in North The United States to rubble.

Meanwhile, the Chicago Tribune opened its recent newsroom this week in the historic Brooks Building at 223 W. Jackson Blvd. in the Loop, its fourth editorial dwelling in six years since being booted from Tribune Tower in 2018.

While financing concerns about constructing the Chicago on line casino would possibly perhaps well even maintain been assuaged Friday, Bally’s is peaceable navigating some uncertainty in the wake of an ongoing buyout provide from its largest shareholder.

In March, hedge fund Customary Total, which owns 26% of Bally’s, submitted a proposal to buy out the relaxation of the stockholders at $15 per part, valuing the firm at about $648 million. The Bally’s board formed a distinct committee and retained Macquarie Capital as its monetary adviser to be conscious of about the provide and come across strategic choices.

Bally’s has no longer supplied any updates on the articulate of the buyout provide since March.

The firm’s stock gained extra than 6% Friday, closing at $13.44 per part.

rchannick@chicagotribune.com

In the origin Printed: July 12, 2024 at 6:15 a.m.