Gaming and Leisure Properties announced Tuesday that it has acquired the northern Illinois site associated with the Hard Rock Casino project under construction in Rockford from an affiliate of 815 Entertainment for $100 million.
Simultaneous with the land acquisition, GLPI entered into a 99-year term lease with 815 Entertainment. Initially, annual rent is $8 million, subject to fixed 2% annual escalation.
In addition to the lease, GLPI has also committed to up to $150 million of development funding. The new development will open in September 2024 with 60,000 square feet of gaming floor, Initially, 1,250 slot machines, 50 table games, and in-person and online sportsbooks.
The project has a budget of $358 million, with about $120 million spent to date. 815 Entertainment currently operates a 37,800-square-foot temporary casino that opened in November 2021.
815 Entertainment is owned by Dan Fischer, along with a consortium of local investors and Hard Rock International, which is also acting as the property manager.
The agreements with 815 Entertainment will allow GLPI to expand its footprint with the addition of a new lease, new tenant, and commitment to provide potential funding, according to Peter Carlino, GLPI’s chairman and CEO.
“We believe this is an attractive transaction for our shareholders as the strong initial results at 815 Entertainment’s temporary facility demonstrate the strength of the location and the depth of the market,” Carlino said.
Hard Rock, as the property manager and an equity investor in 815 Entertainment, will bring its management team to the project. The overall transaction structure makes $250 million available to 815 Entertainment to invest in the project and reflects GLPI’s creativity in crafting a comprehensive construction financing solution, he said.
“Hard Rock’s financial strength and development trajectory are only made stronger with great partners like GLPI and 815 Entertainment,” said Jon Lucas, chief operating officer for Hard Rock International.
In conjunction with the transactions, GLPI will receive a right of first refusal on the building improvements of the Hard Rock Casino if there is a future decision to sell them once completed, company officials said.
