Big news for Jack Entertainment!
Published by: Rich Exner/Cleveland.com
Published date: October 2019
CLEVELAND, Ohio – Dan Gilbert’s JACK Entertainment announced Monday an $843 million sale/leaseback deal with VICI Properties real estate trust for JACK’s downtown Cleveland casino and suburban Thistledown Racino.
Both properties will continue to operate under the JACK name.
VICI Properties’ portfolio consists of 24 gaming facilities leased to such names as Caesars Entertainment, Penn National Gaming and Hard Rock International.
John Payne, president and chief operating officer of VICI Properties said, “Ohio continues to be one of the healthiest and fastest growing regional gaming markets and we are thrilled to add high-quality, urban real estate to our portfolio at an attractive capitalization rate.”
VICI said that after paying “approximately $843.3 million in cash” it will enter a rental agreement with JACK calling for initial rent of $65.9 million a year for 15 years, with four 5-year tenant renewal options.
JACK Entertainment said it would continue to invest in the Cleveland area.
“JACK Entertainment looks forward to continuing to operate JACK Cleveland Casino and JACK Thistledown Racino,” said Mark Dunkeson, chief executive officer of JACK Entertainment.
“The combined efforts of our gaming properties together with the other Cleveland assets operated by our sister companies including the Cavs, Avenue Shops at Tower City and the May Company Building, have created a strong connection to the city and allows us to remain heavily committed to the Cleveland area. We will continue to invest significant capital into these properties which will have a lasting positive impact on the city and Cuyahoga County.”
The Rock Family of Companies, which includes JACK Entertainment, employs nearly 4,500 people in Greater Cleveland and has made nearly $2 billion in investments in Cuyahoga County, JACK Entertainment said. This investment includes $700 million in the downtown casino and the racino in North Randall.
The sale/leaseback agreement announced Monday, and which is expected to close in 2020, is third deal in the last year involving JACK Entertainment properties.
- In April, JACK Entertainment and VICI Properties announced a $780 million agreement for JACK to sell its Cincinnati casino along with Turfway Park in Kentucky to Hard Rock International and VICI Properties. The Cincinnati deal was completed in September, with Turfway Park awaiting regulatory approval.
- In November 2018, JACK announced an agreement to sell its Detroit Greektown Casino-Hotel for $1 billion to Penn National Gaming. The sale closed in May.
Gilbert’s involvement in Ohio casinos traces to 2009, when interests tied almost entirely to Gilbert and those of Penn National Gaming spent $47 million on a campaign to win voter approval amending the state constitution to allow four Ohio casinos.
Ohio’s first casino opened in Cleveland in May 2012, a partnership between Gilbert-related companies and Caesars. It initially operated under the Horseshoe name. The same partnership opened the Cincinnati Horseshoe Casino a year later in March 2013.
In 2015, Rock Ohio Ventures bought Caesars’ 20 percent stake. Then JACK Entertainment was formed to rebrand and operate the properties under the JACK name.
Click to read the entire article at Cleveland.com