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Indiana racetrack company. Additionally, they will build a convention center on the Las Vegas Strip.
Under the of deal, Caesars will sell Harrah’s Las Vegas to VICI Properties for $1.14 billion. Additionally, the company will enter into a 15-year lease for Harrah’s Las Vegas, with an annual rent of $87.4 million.
Caesars will continue to operate Harrah’s Las Vegas as normal. The rent will increase contractually in subsequent years. Plus, Caesars will have the option to extend the lease for an additional 20 years through four five-year extensions.
Caesars acquiring Hoosier Park and Indiana Grand
Caesars Entertainment President and Chief Executive Officer Mark Frissora said the company expects the sale and leaseback of Harrah’s Las Vegas to allow it to finance the acquisition of Indianapolis-based horse racing company Centaur Holdings LLC. The company announced that deal last month.
Centaur owns and operates Anderson, Indiana’s Hoosier Park Racing and Casino, and Shelbyville, Indiana’s Indiana Grand Racing and Casino. The cost of the acquisition is $1.7 billion.
As a part of the deal with VICI Properties, Caesars Entertainment will also acquire an 18.4 acre parcel of land adjacent to Harrah’s Las Vegas.
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Caesars plans 300,000 square foot convention center
The company plans to develop a new 300,000 square foot convention center on that site. Caesars Entertainment hopes the planned convention center can become a leading destination for meetings on the Las Vegas Strip.
Caesars Entertainment properties will surround the convention center. Additionally, it will feature the largest column-free ballroom in the United States. Caesars also says the new convention center will be outfitted with state-of-the-art technology. Plus, it will include flexible space aimed at accommodating meetings of different sizes.
“The transactions we are announcing today demonstrate our commitment to pursuing growth opportunities while maintaining balance-sheet discipline,” Frissora said in a press release.
“We expect the sale and leaseback of Harrah’s Las Vegas will allow us to acquire Centaur and develop the convention center without increasing leverage. The sale and leaseback transaction is our first post-emergence transaction with VICI and maintains Harrah’s Las Vegas’ connectivity to our network, which will create value and provide benefits to our guests. The acquisition of the adjacent land and development of the convention center allows us to develop another important destination right in the middle of our center-Strip footprint.”
A deal for ownership of the convention center with VICI Properties is also part of the negotiations. Once construction is complete, Caesars will have the right to require VICI to purchase the convention center and lease it back to them. Plus, should Caesars not exercise that right, VICI will have the option to do so.
VICI Properties and Caesars
VICI Properties already owns and leases more than a dozen US casino properties to Caesars Entertainment. This includes Caesars Entertainment’s flagship property Caesars Palace in Las Vegas. Plus, other VICI properties under leaseback agreements with Caesars include:
- Caesars Atlantic City
- Harrah’s Lake Tahoe
- Harvey’s Lake Tahoe
- Harrah’s Louisiana Downs
- Horseshoe Tunica
- Horseshoe Southern Indiana
- Bally’s Atlantic City
- Horseshoe Council Bluffs
- Harrah’s Council Bluffs
- Harrah’s Reno
- Horseshoe Bossier City
- Harrah’s North Kansas City
- Horseshoe Hammond
- Harrah’s Metropolis
- Harrah’s Joliet
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