SL Green Realty, Manhattan’s largest office landlord, and Caesars Entertainment, the biggest U.S. casino-entertainment company, are seeking a gaming license in the tourist and entertainment mecca of Times Square as New York attempts to recover from the fallout of the pandemic.

The partnership plans to redevelop 1515 Broadway, between west 44th and 45th streets, as Caesars Palace Times Square, and make significant investments in security, traffic and mass transit improvements as well as “accelerate” economic recovery for surrounding businesses, SL Green and Caesars said Thursday in a statement.

Caesars Palace Times Square is set to include a theater for the hit Broadway show “The Lion King” as part of the proposal that's just the latest interest by a major real estate company in a casino in New York. The partnership also plans tie-ups with area businesses to allow more than 65 million members in Caesars Rewards loyalty program to use credits at Broadway shows, local hotels, restaurants, retail stores, comedy clubs and entertainment venues.

“We believe that Times Square offers the best location for a new resort casino that can attract tourists and benefit local businesses,” Marc Holliday, SL Green CEO, said in the statement, adding that a casino in Times Square is in keeping with existing neighborhood uses. “Times Square is the center of the entertainment universe. Because we are proposing a renovation, once the license is issued, we can open quicker than other facilities, which require entirely new construction, changes in law, and will be disruptive to their local communities.”

On a conference call Thursday, when SL Green discussed the results of its third-quarter earnings, Holliday said the partnership with Caesars is exclusive and the details of the project will be addressed when New York state issues an anticipated request for proposals for downstate casino licenses.

This is “not just a big opportunity for the city and the state but a rallying point for Times Square to have something very positive to redirect some of the degradation in the area,” Holliday said on the call. “Coming on the heels of the pandemic, areas like Times Square need to reboot ... to make it an economic engine around which we can have a Times Square renaissance much in the way you see Grand Central renaissance.”

SL Green’s Caesars deal for a Times Square gaming license came a month after rival developer Related Cos. said it’s teamed up with Wynn Resorts to pursue a downstate casino license at Western Yards, directly next to the Javits Center convention venue, at Hudson Yards, the largest U.S. private development. Related’ s Hudson Yards on Thursday opened 50 Hudson Yards, New York's fourth-largest office tower and the biggest in the neighborhood that has attracted major corporate tenants including Meta and BlackRock.

The major real estate and casino players’ jostling comes after the New York state budget passed earlier this year set the stage to issue up to three downstate gaming licenses, with one widely expected to be in Manhattan. Vornado Realty Trust Chairman and CEO Steven Roth said earlier this year the real estate investment trust is “aggressively pursuing” the idea of a casino in anticipation of three downstate licenses.

He’s said while one license likely goes to the New York suburb of Yonkers and another goes to the Queens Aqueduct area, Roth said the third license “would be best served to go into Manhattan.”

Roth was said to float the idea of pitching a license around the Herald Square area, site of Vornado’s massive Penn District development surrounding the Penn Station transit hub.

As for the Grand Central renaissance Holliday referred to, it reflects in part demand for its trophy tower One Vanderbilt as well as improvement for the other properties surrounding the Grand Central Terminal transit hub.

For instance, among its major leases last quarter, many came from the area, led by a new lease with Memorial Sloan Kettering Cancer Center spanning 414,317 square feet at 885 Third Ave. One Vanderbilt, almost fully leased, added Fidelity Information Services for 25,488 square feet.

SL Green, which recently took back control of 245 Park Ave. after an agreement following the bankruptcy filing of the former owner, an affiliate of Chinese conglomerate HNA Group, said it plans to redevelop the tower to make it, in Holliday’s words, “one of the most desirable” places. The tower, between east 46th and 47th streets, is right across from JPMorgan Chase’s global headquarters under construction at 270 Park Ave. and has a direct access to Grand Central Terminal.

In another sign of Manhattan’s improved office leasing market, Steven Durels, executive vice president and director of leasing and real property, said on the call SL Green is seeing more activity from small- to medium-sized tenants.

By sectors, financial services represented about 41% to 42% of SL Green’s third-quarter leasing, which totaled 930,232 square feet, up from about the 30% range in the past year. Law firms also are a lot more active than they were a year ago, Durels said. Against reports of tech giants such as Meta and Amazon taking a pause on expansion or hiring, Durels said tech tenants made up just 8% to 10% of SL Green’s total leasing last quarter.

Durels said office relocations are taking place as companies are “reinventing their workplace.” Whereas typically only 30% of leases signed were for tenants relocating, that jumped to over 40% last quarter, he said.

Part of the renaissance in the Grand Central neighborhood also can be seen with the Summit observatory at One Vanderbilt. Holliday said the observation deck, celebrating its first anniversary, has greeted 1.4 million visitors in the first year.

As companies seek desirable workplaces for their employees, SL Green’s other trophy tower, One Madison Avenue, has signed Franklin Templeton in a new lease spanning 347,474 square feet, joining tech giant and anchor tenant IBM at the tower by Madison Square Park.

Improvements aside, Holliday said rising interest rates “are more of a concern,” making interest rate hedging and debt repayment the company’s top priority.

“We want to protect cash flow and earnings,” SL Green’s finance chief, Matthew DiLiberto, said on the call. He’s told CoStar News SL Green is reducing its floating rate-debt exposure. Rival developer Vornado Realty Trust, which has said it has more floating-rate debt exposure than most commercial real estate landlords, has completed at least four refinancing deals to reduce its risk.

While borrowers are wary about rising rates, for lenders such as Blackstone Group, its floating-rate debt credit business benefits in a rising rate environment, the company said Thursday.