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Penn announces construction timeline for M Resort

Updated November 3, 2022 - 4:28 pm

The new hotel tower at Henderson’s M Resort will break ground by the end of 2023, and it’s expected to be completed in 2025, executives with Penn Entertainment Inc. reported Thursday.

The 384-room expansion will nearly double the capacity at the property to 774 rooms and suites. The $206 million project is part of a four-property $850 million expansion in Illinois, Ohio and Nevada.

Penn CEO Jay Snowden added a few details about the projects, including the construction start-up plan, in a Thursday third-quarter earnings call with investors. Snowden said all four projects would begin by the end of next year with most of the spending occurring in 2024 and 2025.

Penn is putting $225 million toward the projects with Gaming and Leisure Properties Inc., the Penn-affiliated real estate investment trust that owns the land beneath the four resorts, contributing $775 million in financing. Penn has negotiated a $350 million variable cap rate with GLPI that can be drawn at Penn’s discretion at then-current rates, giving the company additional balance sheet flexibility. The remaining $225 million through GLPI is at a 7.75 percent capital rate.

Penn will start the four capital projects simultaneously. In addition to the M Resort, the other projects include:

— The $360 million relocation of the Hollywood Casino Aurora from an old riverboat barge on the Fox River in downtown Aurora, Illinois, to a new 200-room hotel that will include 900 slot machines and 50 table games. The new site will also be next to the Chicago Premium Outlets, which draws 8 million visitors annually.

— The $185 million relocation of Hollywood Casino Joliet from an old riverboat barge on the Des Plaines River near Joliet, Illinois, to a new mixed-use development, Rock Run Crossing, that is less than four miles away. The new facility will have 780 slot machines and 30 table games.

— A new $100 million Hollywood Casino in Columbus, Ohio with a 200-room hotel and a new bar and restaurant.

The new hotel tower at the M Resort is expected to take advantage of the growth in west Henderson, and will include a 15,000-square-foot ballroom that would provide additional capacity for group business.

The M has capitalized on its close proximity to the Raiders’ corporate headquarters and training facility about three miles away. In 2019, the resort became the “Official Raiders Team Headquarters Hotel,” and in April 2021, the resort opened the Raiders Tavern & Grill, the world’s only official Raiders-themed restaurant.

The M opened as the Las Vegas Valley’s southernmost property in March 2009. It was acquired by Penn in 2011. Penn recently sold its other Las Vegas property, the Tropicana Las Vegas, to Bally’s Corp.

Analysts applauded Penn’s third-quarter results. The company reported net income of $123.5 million, 72 cents a share, on revenue of $1.63 billion for the quarter that ended Sept. 30. For the same period a year ago, the company reported net income of $86.1 million, 52 cents a share, on revenue of $1.51 billion.

Penn shares, traded on the Nasdaq exchange, were down $1.68, 5.12 percent, to $31.15 a share in slightly-above-average volume. After hours, the stock fell another 6 cents, 0.19 percent, to end at $31.09 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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