Posted on: May 7, 2023, 07:18h.
Last updated on: May 7, 2023, 07:18h.
Bally’s (NYSE: BALY) reportedly reached an agreement with Tribune Publishing to expedite the media company’s departure from Chicago’s Freedom Center — its 30-acre riverfront property.
The accord represents a cleared hurdle for the Rhode Island-based gaming company in its plans to developed a $1.7 billion integrated resort in the third-largest US city. Last November, Bally’s paid $200 million for the land. The casino operator subsequently sold the property to private equity firm in a $500 million sale-leaseback transaction to raise capital for the Chicago casino projects.
Under the terms of the previous accord, Tribune Publishing could have stayed at the property for an extended period of time. If reports of the new accord are accurate, Bally’s will provide the Chicago Tribune publisher with a series of cash payments to speed the newspaper giant’s vacating of the premises to July 2024.
The amount of the payments wasn’t publicly revealed. Tribune has occupied the site for more than four decades. Bally’s will demolish the building there to make way for the Chicago casino — the operator’s most expensive project to date.
Bally’s Clearly Wants Chicago Land
Alden Global Capital, the investment firm that owns Tribune Publishing, recently added 10 years to its lease at Freedom Center, indicating that a near-term deal with Bally’s wasn’t likely in the offing.
There was some speculation that Bally’s would help Tribune find another building to lease, but now appears to the more expeditious course of action for the regional casino operator is to simply pay the media company to vacate the premises.
Outgoing Mayor Lori Lightfoot (D) selected the Freedom Center site. Initially, that decision didn’t go over well, but she was able to get a majority of the Chicago City Council to support the idea.
Clearing the real estate hurdle is pivotal because Bally’s is still waiting on approval for the project from the Illinois Gaming Board (IGB). Bally’s is hoping to commence construction on the casino-hotel in 2024 while aiming for a 2026 opening date.
Time of the Essence for Bally’s
The impetus for getting a deal done with Tribune Publishing could be as simple as time. Bally’s is already facing potential delays for its temporary Chicago casino, which will be located in the Medinah Temple in the River North section of the city.
Obviously, the more rapidly Bally’s gets approval for a temporary casino and then the permanent project, the sooner it can start making money in Chicago. That opportunity is certainly there. Bally’s Windy City property will be the first integrated resort in the city and data confirm Illinois misses out on hundreds of millions in tax revenue annually by way of Chicagoans traveling to Indiana casinos.
Owing to the precarious financial positions of both Chicago and the state of Illinois, it behooves those entities to see Bally’s project come to life sooner rather than later. The jobs, income and corporate taxes created by the casino-hotel are seen as essential revenue to generators to a city and state grappling with some of the deepest public employee pension problems in the country.