Penn National’s $400M Columbus Casino Moves Forward with Land Purchase
- Feb 09, 2010
February 9, 2010
By Barbra Murray, Contributing Editor
Given the lackluster state of the gaming market, most developers with access to hundreds of millions aren’t making a beeline to build casinos, but there are always exceptions such as Penn National Gaming. The Wyomissing, Pa.-based gaming facility owner and operator just made a major move toward building its $400 million Hollywood Casino in Columbus, Ohio, with the acquisition of a 123-acre brownfield site on the city’s west side.
Ultimately Hollywood Casino will feature a 180,000 square-foot casino, a 4,000-space parking facility and food and beverage outlets. The project was originally planned for a 24-acre location in the Arena District of Columbus, but if Ohio voters approve a ballot initiative in May, the newly acquired former General Motors/Delphi Automotive plant property will become home to the casino.
In anticipation of state residents’ authorization of the proposed site relocation, Penn National has already initiated demolition and environmental remediation activities. If all goes as planned, the Hollywood Casino will debut in the second half of 2012, bringing with it a bevy of new jobs, millions in tax revenue and a much-needed boost to Columbus’ struggling West Side.
Despite the recession that quelled demand for new gaming properties, Penn National is moving full steam ahead with the Hollywood Casino; but then again, the project’s locale offers a particular environment that is conducive to the pursuit such an endeavor during these dismal economic times.
“Ohio is a unique opportunity given that it’s an oligopoly market,” Jacob Oberman, director of gaming research and analysis with real estate services firm CB Richard Ellis’s Global Gaming Group, told CPE. “There will be only four casinos in the state, the tax rate is favorable and Ohio is a popular state. Penn National will have the only casino in Columbus and with the city’s population of about 1 million, there is great potential to generate very good return on investment.”
But it will take money to make money, and Penn National has the cash and the means to stay on track with the Hollywood Casino project, recession or no. “While it is difficult to gauge the pace of an economic recovery, we are confident that the company’s facility development skills, strong liquidity position and capital structure, committed management and personnel, prudent management of our property base and exercising appropriate risk management disciplines will generate long-term shareholder value and that Penn National will be well-positioned to benefit from healthier levels of consumer spending as they occur,” Peter M. Carlino, Penn National chairman and CEO, noted in the company’s fourth quarter report.
Penn National, which operates 19 gaming facilities across the country and in Ontario, Canada, saw revenue of nearly $556 million over the last three months of 2009.