Bally’s overhauled the design of its planned 30-acre casino and hotel campus along the Chicago River and accelerated its completion timeline, backed by $940 million in new financing for a project that has faced recent skepticism about its viability.
Bally’s announced on Friday an agreement with Gaming and Leisure Properties in which the casino company will become a tenant in Chicago and at existing casinos in other cities, in exchange for $940 million toward construction costs of the casino complex in River West.
The binding term sheet for the deal moves the long-planned project closer to the starting line after a series of setbacks, including questions about Bally’s finances and ability to complete the project, which included Mayor Brandon Johnson recently expressing doubts about the project’s future.
Another setback, concerns that the previously chosen location for a large hotel tower would damage underground city water pipes, appears to have been overcome by a reconfiguration of the site announced Friday.
Bally’s said the accelerated new plan is to build the entire project, including a 34-story, 500-room hotel now moved to the south end of the property, in a single phase. Previous plans were to construct the campus — which also will include a 3,000-seat theater, 2-acre park, restaurants, cafes and food hall — in multiple phases. Tenants will include a Tao nightclub and cafe, according to a Securities and Exchange Commission filing.
The project also will create a 2,000-foot-long extension of the city’s Riverwalk.
Providence, Rhode Island-based Bally’s said it plans to complete the project, which it said will generate about 3,000 short-term construction jobs and 3,000 long-term casino jobs, by 2026. In the meantime, Bally’s is operating a temporary casino in the historic Medinah Temple building in River North.
Bally’s said it took possession of the former Chicago Tribune printing facility at 777 W. Chicago Ave. a week ago and has begun preparing the site for demolition as it seeks formal approval of the new site plan from the city’s planning department.
The casino company on Friday also unveiled new renderings of the project from design firm HKS.
“With keys to the property in hand, the new financing secured, a site plan that exceeds the original, and demolition set to start this summer, let there be no doubt that Bally’s Chicago Casino and Hotel will soon rise up along the Chicago River,” Bally’s President George Papanier said in a statement.
As part of the deal announced Friday, Wyomissing, Pennsylvania-based Gaming and Leisure Properties will buy the site which the Freedom Center printing plant now occupies for $250 million.
The seller is Oak Street Real Estate Capital, which bought the site for $200 million in late 2022 as part of a deal that was announced at the time as a potential $500 million total sale-leaseback investment. In that deal, Bally’s agreed to a 99-year ground lease with two 20-year renewals.
The new deal has an initial 15-year lease term. Bally’s will pay $20 million annually, with scheduled rent escalations, according to the SEC filing.
The Chicago project will be funded from this August through December 2026, with Gaming and Leisure owning all the real estate.
“This multi-faceted deal is another example of our ability to be innovative in our approach to creating opportunities for our shareholders in conjunction with our best-in-class regional gaming tenants in what remains a volatile interest rate and challenging transaction environment,” Gaming and Leisure Chairman and CEO Peter Carlino said in a statement. “Furthermore, these transactions will expand and diversify our already industry-leading regional gaming property portfolio while adding a downtown asset in a world-class city, and the nation’s third largest metropolitan area, to our unmatched geographic breadth.”
In the statement, Bally’s Chairman Soo Kim described Chicago as “vitally important” to the company’s growth and said that “our permanent downtown facility will become our company’s flagship property when it opens in late 2026.”
Financing for the Chicago project is part of a larger, $1.585 billion deal in which Gaming and Leisure plans to buy the real estate assets of Bally’s casinos in Kansas City and Shreveport, Louisiana, for a combined $395 million. Bally’s will lease back the properties from the new owner.
The deal includes a $735 million purchase option for the casino in Lincoln, Rhode Island, starting in October 2026. That is down from a previously agreed-upon purchase price of $771 million.
Annual rent for the Kansas City and Shreveport properties will start at $32.2 million.
The overall deal will create an initial capitalization rate, or annual rate of return, of 8.3% for Gaming and Leisure.
Bally’s is considering an initial public offering for 25% overall ownership of the Chicago casino, which would be offered to some city residents and women- and minority-owned businesses as part of a host community agreement with the city, according to the SEC filing.
The project is expected to cost about $1.8 billion, according to Gaming and Leisure Properties, up from Bally’s previous estimates of $1.7 billion.
“The city is pleased with this development concerning the financing and construction of Bally's Permanent Chicago Casino,” Johnson said in a statement. “We look forward to reviewing the updated plans and proceeding through the review process with the Department of Planning and Development."