Archive for Thursday, September 17, 2009

Review board hears new casino proposal for Wyandotte County

Penn Hollywood National and International Speedway Corp. are now partners in a joint venture to build and operate a state-run casino near the Kansas Speedway in Kansas City, Kan. The Hollywood Casino would open in January 2012, pending state approval.

Penn Hollywood National and International Speedway Corp. are now partners in a joint venture to build and operate a state-run casino near the Kansas Speedway in Kansas City, Kan. The Hollywood Casino would open in January 2012, pending state approval.

September 17, 2009

— The Kansas Lottery Commission, Kansas Entertainment LLC and the Unified Government of Wyandotte County presented a single casino proposal Tuesday to the Kansas Lottery Gaming Facility Review Board, instead of the expected two.

Originally, The Cordish Group was backing a Hard Rock casino to be located next to the Kansas Speedway, and Penn National Gaming, under its subsidiary Penn Hollywood Kansas, was presenting a Hollywood casino to be located next to Schlitterbahn Waterpark. The Kansas Lottery had approved both proposals.

Last week, though, Penn Hollywood Kansas announced it had bought out The Cordish Group, joining International Speedway Corporation for a 50 percent share in Kansas Entertainment LLC, a joint venture to build and opearate a state-run casino at the Kansas Speedway. With the change, a Hard Rock Casino was out, replaced by a Hollywood Casino.

The proposed Hollywood Casino would be constructed in two phases, said Steve Snyder, Penn National senior vice president for corporate development. In the first phase, the $386-million casino would be built with 2,300 slot machines, 86 table games and 28,000 square feet of food and entertainment outlets. Phase one would begin in summer 2010, and the casino would open in January 2012.

Snyder said the casino was anticipated to generate $225 million in gaming revenue during its first year of operation. Within two years of the opening, the second phase of construction would begin, during which a 250-room hotel would be added to the casino. If construction on this hotel did not begin during the 24th month after Hollywood’s opening, the casino would pay a 1 percent per year penalty fee from its total gaming revenue back to the Unified Government.

Both ISC and Penn National, Snyder said, have the funds to complete this project.

“The financial strength of this partnership is second to none,” Snyder said. “We have the ability…to immediately populate this facility with known Kansas gaming customers. This team creates something that can’t be replicated almost anywhere in the country. This will become the Midwest leading destination bar none.”

ISC Chief Executive Officer Lesa Kennedy explained to the review board that Kansas Speedway planned to petition NASCAR to have a second NASCAR Sprint Cup Series race at the speedway. Kansas Speedway already plays host to the event once a year, which brings in about $110 million for the state, Kennedy said, and an additional race each year would increase the economic influx in the area and would draw visitors to the casino.

“We are prepared to promote the facility in any way possible,” Kennedy said of the race request as a means of attracting tourists to the casino.

Of the total revenue generated by the casino each year, Snyder said, 1 percent would go to the Unified Government for civic causes, $500,000 would go to non-host school districts in Wyandotte County, $500,000 would be given to various community projects, $100,000 would go to the Unified Government Parks and Recreation department, $10,000 would go to the Conventions and Visitors Bureau, and $10,000 would be given to the local chamber of commerce. In addition, ISC pledged to donate two billboards to the state, at a value of $1.5 million, that would stand near the speedway, promoting both it and the casino.

Unified Government Mayor/CEO Joe Reardon also spoke to the board, expressing his full support of the proposal.

“The benefit (of the casino) to our community is far reaching,” Reardon said. “We’re excited and anxious to see the construction of a casino in Wyandotte County finally begin.”

Members of the board posed several questions to Tuesday’s speakers about the proposal. Chairman of the board Matt All said he was concerned there was no definition of “construction commencement” in the proposal. All said he wanted to be sure the hotel would be finished within a reasonable amount of time after construction began.

“I mean, can I get a permit and then ride around on a bulldozer for six years?” All asked.

Reardon said a certain amount of trust needed to be given to the partners of this project when it came to construction timelines.

“I can say from my own experience, Kansas Speedway has been a great partner in Wyandotte County, and they do what they say,” Reardon said. “We’ve negotiated this in some good faith.”

Further discussion of the Kansas Entertainment LLC Hollywood casino proposal will take place Oct. 26 at the next Kansas Lottery Gaming Facility Review Board, meeting at the Topeka Performing Arts Center, 214 SE 8th Ave, Topeka.

Comments

Use the comment form below to begin a discussion about this content.

Commenting has been disabled for this item.