Bally's Corporation has secured a funding commitment totaling $2.07 billion from Gaming and Leisure Properties, Inc. (GLPI) for the development of its permanent casino in the city of Chicago. This strategic arrangement includes a binding term sheet and a construction funding facility, with additional rent based on an 8.5% cap rate for incremental amounts funded. Additionally, Bally's has announced its intention to build a 500-room hotel tower as part of the casino entertainment complex. The new design relocates the hotel tower to the southern end of the development site due to potential risks to Chicago's underground infrastructure, resulting in a re-imagined integrated complex across a single phase of construction.
Bally's also plans to conduct sale leaseback transactions for its Kansas City and Shreveport properties, expecting to receive a total consideration of $395 million in exchange for $32.2 million in initial annual rent, with annual escalators. The company intends to use the proceeds from these transactions to repay amounts drawn under its $620 million revolving credit facility and for general corporate purposes.
Furthermore, Bally's expects the new funding and development agreements with GLPI, combined with certain proceeds from the expected sale leaseback transactions and its financial resources, to fully fund the development expenditures necessary to complete the Chicago project.
The company anticipates that the contemplated initial public offering of Bally's Chicago, Inc. will offer individuals and qualifying businesses the opportunity to participate in 25% equity ownership in the project, in line with the host community agreement with the City of Chicago.
Soo Kim, Chairman of Bally's Corp., expressed delight at the partnership with GLPI, emphasizing the fulfillment of construction financing requirements to bring the Bally's Chicago permanent casino and entertainment complex to River North by the fall of 2026. Peter Carlino, Chairman and CEO of GLPI, echoed Kim's sentiments, highlighting the partnership's strategic nature and the companies' joint efforts to bring the project to fruition on time and on budget.
Once completed, the Bally's Chicago resort is expected to feature a 3,000-seat theater, a 2-acre public park, six restaurants, and space for approximately 3,300 slots and 173 table games. The development is projected to generate approximately 3,000 construction jobs and 3,000 casino jobs upon becoming operational. As a result of these announcements, the company's shares have moved 6.5% on the market, and are now trading at a price of $12.63. If you want to know more, read the company's complete 8-K report here.
