Hollywood Casino at Kansas Speedway Misses 10th Hotel Deadline
When Penn Entertainment received permission to develop what would become its Hollywood Casino at NASCAR's Kansas Speedway, the company also committed to building an adjacent hotel within two years. But 10 years after this deadline, no such hotel has been built.
Instead, the developer chose to pay a $13 million penalty for missing the deadline ten times in a row.
As part of a 2009 agreement with the combined governments of Wyandotte County and Kansas City (WyCo & KCK), Kansas Entertainment LLC committed to building a hotel tower with at least 200 rooms. Kansas Entertainment LLC is a joint venture between the University of Pennsylvania and International Speedway Corporation (now part of NASCAR).
In return, the project received STAR bonds from WyCo and KCK. This is a special financing vehicle available to Kansas City governments for the development of large-scale commercial, entertainment and tourism projects.
Delays and Penalties
Under the agreement, construction of the hotel will begin within the second anniversary of the casino's opening (February 2014). If that does not happen, under the agreement, Kansas Entertainment LLC will pay WyCo and KCK 1% of the casino's annual net gaming revenue until work begins.
Kansas Recreation LLC initially said it planned to break ground in October 2014, but later changed that to 2015, pending the results of an economic study.
Later that year, the developer announced it would delay the hotel project, citing "weak economic conditions in the region, particularly in the hotel market."
Pennsylvania Plan Continues
The University of Pennsylvania said it was monitoring occupancy rates and new hotel developments in the area and insisted it "continues to explore options for building a hotel near the Hollywood Casino."
“As part of our evaluation, we considered the existing infrastructure and occupancy of adjacent and nearby hotels, as well as the marketing partnerships we have developed with these companies over the years,” said Jeff Moe, vice president for public affairs and government relations at Penn. Jeff Morris said this in the Kansas City Business Journal last year.
We are proud of the relationships we have built in Wyandotte County since opening in 2012 and look forward to continued success in the years to come. ” he added.
For now, however, Kansas Entertainment LLC is willing to continue paying the fines, and Wyandotte County Executive David Johnston said they may continue to do so for some time.
"I think a lot of people have the misconception that this is a 10-year window. No, that's going to continue and it's only going to stop if there's construction," Johnson told Fox 4 this week.
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Source: www.casino.org
