One week after acquiring the Freedom Center printing plant, Bally’s secured financing to build a $1.7 billion casino complex on the 30-acre River West site. The company announced a deal with Gaming and Leisure Properties for $940 million to fund the construction of the permanent casino.
Redesign and approval:
Bally’s has redesigned its planned 500-room hotel tower, moving it south of the casino to avoid city water pipes, pending city planning department approval. George Papanier, president of Bally’s Corporation, confirmed the intention to meet the September 2026 opening date, as the Chicago Tribune reports.
The financing package and revised site plan address concerns about Bally’s financial capability to build the permanent casino. Bally’s won the bid to build Chicago’s first casino in 2022, featuring an exhibition hall, hotel, theater, restaurants, and gaming positions.
Bally’s opened a temporary facility at Medinah Temple in September, with plans to open the permanent casino by September 2026. Earlier this year, Bally’s announced the need to relocate the hotel tower from its original planned location due to infrastructure concerns.
The new site plan by HKS involves a single-phase development, relocating the hotel tower south of the entertainment complex, away from infrastructure issues. Gaming and Leisure Properties, which owns 65 locations across 20 states, will fund the project.
Bally’s expects to raise over $2 billion through transactions with Gaming and Leisure Properties, including sale-leasebacks on properties in Kansas City and Shreveport. Additionally, Gaming and Leisure Properties is acquiring the Freedom Center site for $250 million.
Addressing funding gaps:
Concerns about funding surfaced in February when Bally’s revealed an $800 million gap to cover the remaining costs. Analysts suggested a tight credit market and Bally’s debt-heavy balance sheet might delay or downsize the project.
Chicago Mayor Brandon Johnson expressed doubts last month about the project’s feasibility. However, Friday’s financing announcement represents a significant step toward the goal.
“The City is pleased with this development concerning the financing and construction of Bally’s Permanent Chicago Casino,” Mayor Johnson stated. The project is crucial for meeting the financial goals of both the city and Bally’s.
Bally’s temporary casino saw an 11% revenue drop last month but had a 1% increase in admissions. The temporary facility celebrated its millionth visitor last month. Statewide casino revenue was down nearly 4% in June.
Through the first six months of 2024, Bally’s Chicago generated $62.8 million in adjusted gross receipts and $6.8 million in local tax revenue. Bally’s was projected to generate $243 million in adjusted gross receipts and $35 million in gaming taxes for Chicago this year.
Long-term growth:
Long-term growth hinges on the planned permanent casino. Bally’s paid Tribune Publishing $150 million to vacate the 43-year-old Freedom Center by July 5 to break ground on the new casino complex.
Bally’s took possession of the site last week, with preparations for demolition beginning. The Chicago Tribune relocated its newsroom to the historic Brooks Building.
Despite the financing announcement, Bally’s is navigating an ongoing buyout offer from its largest shareholder, Standard General, which owns 26% of Bally’s. The board is evaluating the offer with Macquarie Capital.
Bally’s and Gaming and Leisure Properties entered a binding term sheet for $940 million construction funding for the Chicago project. GLPI’s principals have over three decades of construction development experience in the gaming industry.
The project’s demolition contractor began preparing the site for demolition. The development will generate approximately 3,000 construction jobs and 3,000 permanent casino jobs.
The Chicago Community Builders Collective, a minority-led construction partnership, will implement the improved site plan. Jimmy Akintonde, CCBC member, expressed excitement about the project’s positive impact on Chicago in the company’s press release.