$705M Hard Rock Casino and Hotel Bid Wins

KANSAS CITY, KS-A joint venture of the Baltimore-based Cordish Co. and the International Speedway Corp. has won the bid to build and manage a new state-owned casino in the northeast Kansas area. The Kansas Entertainment LLC venture will build a $705-million Hard Rock Hotel and Casino, after their proposal was approved recently by the Kansas Lottery Gaming Facility Review Board. The development beat out two other bids, a $500-million proposal by Las Vegas-based Golden Gaming Inc. and a 275-acre project by Legends Sun, made up of the Mohegan Gaming Authority, Olympia Gaming LLC and RED Development LLC.

When completed, the 1.5-million-sf Hard Rock project will going up at the second turn of the speedway, which is at the intersection of interstates 70 and 435. The project will include a 300-room hotel, a casino with 3,000 slot machines and 140 gaming tables, 275,000-sf of retail, and meeting and convention facilities. A temporary casino will operate at the site beginning in 2009, with 2,000 slot machines and 75 tables. “We’re finishing up on the design and architectural plans, and will open the 100,000-sf first phase in summer 2009,” Joe Weinberg, a principal with Cordish, tells GlobeSt.com. Also, the speedway company is petitioning NASCAR to realign a second Sprint Cup series race at the racetrack no later than 2011.

The company will own the land and buildings of the project, while the state will own the gaming equipment and will take in the direct profit, providing the venture with a set fee, Weinberg says. The casino is expected to generate $350 million in gaming revenue the first year of operation.

The venture is contributing between 20% to 40% in equity to the project, with the remaining portion expected to be funded by non-recourse, secured debt financing. Weinberg says his firm, which has developed Hard Rock casino projects in Hollywood, FL and Tampa and is a prominent developer in the Kansas City Power and Light project across the river in Kansas City, MO, is not too worried about the short-term economic struggles. “Nationally, there has been a downturn in gaming revenues in certain markets, such as Las Vegas,” he tells GlobeSt.com. “But this is a long-term investment. We try not to react to short blips in the economy, this is long-term, and we’re bullish on the region and the US.”

The Kansas Racing and Gaming Commission has begun an extensive background check on the Kansas Entertainment venture, with a completion date within the next 70 days. Also, the review board will meet Friday, Sept. 26, to vote on the awarding of another casino management bid for the southwest Kansas market. Butler National Service Co., and Dodge City Resort and Gaming, are vying to build a casino in the Butler County area.