The long-anticipated casino project at Hawthorne Race Course seems to be coming to an end, although horse racing may still continue under the Hawthorne brand.
The owners of the 135-year-old track are pursuing bankruptcy court approval to sell the underlying real estate of the Stickney property to Delaware-based Allimac 2023 LLC for $90 million.
Since Allimac plans to acquire the site for redevelopment rather than for racing, according to NBC Chicago, this sale seems to derail the long-awaited casino project at the Stickney site, a venture considered crucial for the future of thoroughbred racing in Illinois.
Financial Turmoil
Hawthorne is currently the only racetrack left in the Chicago region and filed for Chapter 11 bankruptcy protection in late February. It reported estimated assets between $50 million and $100 million against liabilities ranging from $100 million to $500 million, following reports of bounced payments to horse owners.
In 2019, Illinois lawmakers authorized casino gambling at racetracks, and Hawthorne received preliminary approval from the Illinois Gaming Board the following year. Plans were initiated to dismantle part of its grandstand to pave the way for redevelopment; however, the owners have struggled to secure the necessary funding, causing significant delays.
In February, Hawthorne President and CEO Tim Carey mentioned that there was “significant interest from potential buyers and recapitalization partners” due to the transformative potential of the still-unfinished casino.
However, this interest did not yield a competitive bid for the property. Allimac’s offer was structured as a stalking-horse bid, setting the benchmark for any other prospective buyers.
As per the proposed sale agreement, Allimac would transfer $90 million in cash, including a $4.5 million deposit, and initially aimed for closing by July 30.
The official auction notice indicated that Allimac and secured creditor 180 Hawthorne Holdings were the only qualified bidders, although only Allimac chose to engage in the auction. Consequently, no competitive bidding occurred, resulting in Allimac being confirmed as the successful bidder.
What’s Next?
The sale did not receive approval on Monday, despite early reports suggesting otherwise. According to the bankruptcy docket, Judge Timothy Barnes has postponed the sale hearing until Wednesday, July 22.
The Illinois Thoroughbred Horsemen’s Association states that the court has permitted Hawthorne’s backstretch to remain operational through at least August 31. Allimac has expressed that it might delay possession until November 1, but maintaining racing and housing through that date would necessitate additional financing that is currently unconfirmed.
Carey emphasized that the operational business of Hawthorne is excluded from the land sale. This means the company could potentially continue racing either in partnership with Allimac or by relocating to another venue.
Importantly, the sale agreement does not impose any requirements on Allimac to preserve racing activities at the site.