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The new hotel tower at the M Resort in Henderson will break ground in late 2023 and is expected to be completed in 2025, executives from Penn Entertainment Inc. reported Thursday.
The 384-room expansion will nearly double the hotel’s capacity to 774 rooms and suites.This $206 million in projects Part of four $850 million expansion projects in Illinois, Ohio and Nevada.
Penn CEO Jay Snowden added some details about the projects, including plans to kick off construction, during a third-quarter earnings call with investors on Thursday. Snowden said all four projects would begin by the end of next year, with the bulk of spending taking place in 2024 and 2025.
Penn will invest $225 million in the project by Gaming and Leisure Properties Inc., a Penn-owned REIT that owns the land beneath four resorts and provided $775 million in financing. Penn has negotiated a variable cap rate of $350 million with GLPI that can be drawn at Penn’s discretion at the then-current rate, thereby providing the company with additional balance sheet flexibility. The capital rate on the remaining $225 million through GLPI is 7.75%.
Penn will launch four capital projects simultaneously. In addition to M Resort, other projects include:
— The $360 million Hollywood casino Aurora relocated from an old riverboat barge on the Fox River in downtown Aurora, Illinois, to a new 200-room hotel that will include 900 slot machines and 50 table games. The new site will also be adjacent to the Chicago Premium Outlets, which attract 8 million visitors a year.
— The $185 million Hollywood casino Joliet was relocated from an old riverboat barge on the Des Plaines River near Joliet, Illinois, to a new mixed-use development, Rock Run Crossing, less than four miles away. The new facility will feature 780 slot machines and 30 table games.
— New $100 million Hollywood Casino in Columbus, Ohio, with 200-room hotel and new bar and restaurant.
The new hotel tower at M Resorts is expected to capitalize on growth in West Henderson and will include a 15,000-square-foot ballroom that provides additional capacity for group businesses.
M takes advantage of its proximity to the Raiders corporate headquarters and training facility three miles away. In 2019, the resort became the “Official Raiders Headquarters Hotel”, and in April 2021, the resort opened Raiders Tavern & Grill, the world’s only official Raiders-themed restaurant.
M opened in March 2009 as the southernmost property in the Las Vegas Valley. It was acquired by Penn in 2011. Penn recently sold another Las Vegas property, Tropicana Las Vegas, to Bally’s Corp.
Analysts applauded Penn’s third-quarter results. The company reported net income of $123.5 million, or 72 cents a share, on revenue of $1.63 billion for the quarter ended Sept. 30. In the year-ago period, the company reported net income of $86.1 million, or 52 cents per share, on revenue of $1.51 billion.
Penn shares were down $1.30, or 4%, to $31.53 a share in average midday trading on the Nasdaq.
This is a developing story. Check for updates.
Contact Richard N. Velotta at rvlotta@reviewjournal.com or 702-477-3893.follow @RickVelotta on Twitter.
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