Casino-entertainment company Bally’s Corporation announced Wednesday the completion of its previously announced real estate transaction with Gaming & Leisure Properties.
Bally’s and GLPI completed a sale-leaseback transaction relating to the land and real estate assets of Bally’s Tiverton Casino & Hotel in Rhode Island; and Bally’s Hard Rock Hotel & Casino in Biloxi, Mississippi; for a total consideration of $635 million.
The transaction was structured as a tax-free capital contribution, and a substantial portion of the proceeds will be applied to reduce Bally’s debt. These properties have been added to Bally’s Master Lease with GLPI, which now includes six properties. The rent for the Master Lease was increased by $48.5 million on an annual basis on account of the transaction.
Bobby Lavan, Chief Financial Officer of Bally’s, said: “We are pleased to have completed another transaction with GLPI. This marks an important step for us, ensuring Bally’s is best positioned for continued growth.”
Bally’s will “continue to own, control, and manage all the gaming operations of the facilities on an uninterrupted basis” with the leasing arrangement. The master lease has an initial term of 15 years, followed by four, five-year renewals at the tenant’s option.
“The transaction will provide the company with significant, long-term liquidity, ensuring that Bally’s is best positioned to continue executing its capital and strategic plan, as well as to capitalize on future opportunities presented in the market,” Lavan said last year.
The sale-leaseback comes as Bally’s moves forward with plans for new properties and markets. Back in December, the firm announced that its zoning plans for a $1.7 billion casino in Chicago’s River West were approved in a 10-4 vote by the City Council Zoning Committee, which signed off on the company’s plans for a casino and entertainment complex on the site of the Chicago Tribune Freedom Center printing plant.
The new zoning would allow for a casino with 4,000 gaming positions, a 500-room hotel, a 3,000-seat theater and event center, and a riverwalk. Future phases will include up to 4,800 apartments and condos, 250 hotel rooms, retail space and a new public park. The project is slated to create 3,000 construction jobs and 3,000 permanent jobs at the casino and entertainment complex.