Bally’s Corporation has officially signed off on a leaseback deal worth upwards of $500 million on its future Chicago casino site, paving the way for the company to move forward with its Windy City plans.
The acquisition, which was agreed to with an undisclosed firm, allows Bally’s to lease the 30-acre Tribune Publishing Center location on a 99-year lease, followed by 10, 20-year renewals thereafter, according to a company press release.
The leaseback deal allows Bally’s to rent the site, which is located at 777 W. Chicago Avenue near Humboldt Park, with an initial 8.5% annual capitalization rate that drops to 7% if the operator achieves certain “development entitlements and gaming approvals,” according to the release.
Bally’s was awarded the right to develop the $1.7 billion destination casino, the first such facility in Chicago history, in May. The operator beat out competing bids from Rush Street Interactive and Hard Rock Interactive, and received City Council approval by a 41-7 vote.
The legislation that approved a Chicago casino also allowed the end of in-person registration for Illinois sports betting.
"We are excited to be partnering with one of Chicago's leading real estate private equity firms as we progress with building our $1.7 billion flagship property in the Chicago market,” Soo Kim, who serves as the chairman of the board of Bally’s, said in a press release. “We continue to demonstrate our commitment to delivering a world class entertainment facility that supports Chicago's economy and community."
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What’s Included in Bally’s Chicago Casino Project
Bally’s is planning a casino that houses 3,400 slot machines, 170 table games, 10 food and beverage areas, along with a 500-room hotel, an entertainment venue with 3,000 seats, and a variety of other entertainment options.
Among those other options are a 20,000 square foot exhibition space, an outdoor music venue, and a public riverwalk, which will serve as a front door of sorts to the greater Chicago Avenue area.
As part of the destination casino deal, Bally’s has the option to operate a temporary casino for up to three years while a permanent facility is built, with the operator planning to open such a facility in mid-2023.
In order to hit that construction timeline, Bally’s wanted to ensure it had more than enough cash to fund everything that will go into the project, Bobby Lavan, who serves as the chief financial officer for Bally’s, said in the release.
Lavan added the ability to reach a leaseback deal in Chicago allows Bally’s to fully fund the destination casino project without outside help from other financial backers.
"This transaction is an important step in our development plan for Bally's Chicago as we continue to work towards opening the temporary casino in mid-2023,” Lavan said in the press release. “With this new real estate partnership, Bally's has ample liquidity on hand to fund Bally's Chicago without needing to access the capital markets."
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