The cost of developing Caesars Virginia Casino has surged to $750 million.
The projected cost for Caesars Virginia in Danville is consistently increasing.
Caesars Entertainment is working on an integrated resort casino at the site of the ex-Dan River Mills textile factory in Danville. When Danville voters authorized the construction back in November 2020, the projected cost was estimated to be around $400 million. However, the cost had risen to $500 million by September 2021 and to $650 million by August 2022. Now, Caesars representatives are informing the local government in Danville that they anticipate the final cost to be approximately $750 million, nearly double the initial estimate.
According to Caesars, there are multiple factors contributing to the surge in expenses. Unexpected underground tunnels discovered during site preparation of the old textile factory have heightened the challenge of preparing the grounds for the casino and hotel. Additionally, regional inflation driving up labor and material costs is increasing the overall cost of the resort.
Caesars Virginia is projected to be completed by the end of the year.
Another casino project in Virginia, Hard Rock Hotel & Casino Bristol, has also encountered similar budget inflation. Back in February, Hard Rock revealed that the resort's price had gone from $300 million when announced in 2019 to roughly $550 million.
Local Agreement Alterations
Following Caesars' revelation of the growing price tag for its initial casino in Virginia, Caesars made a request for amending its local agreement with the Danville City Council. Caesars intends to alter its hiring commitments due to increased operational costs.
Originally, Caesars agreed to employ a minimum of 1,300 permanent staff members to operate the resort. However, with rising employee wages and higher overhead charges for supplies, Caesars wants to lower the minimum employment amount by more than 30% to 900 employees.
Chris Albrecht, the general manager of Caesars Virginia, explained the alteration during a recent interview with the Danville Register & Bee saying, "Since we began working on this project, the hospitality landscape has changed significantly. As our industry evolves, the employment range in the development agreement allows us the flexibility to operate a world-class resort in a way that leaves room for innovation, efficiency, and the exceptional experience we've promised to deliver in Danville."
Caesars is also asking for approval to eliminate a 2,500-seat live entertainment plan from the project. If approved by the city, the live entertainment would instead be held in the multipurpose conference center accompanying the casino resort.
The suggested amendments propose expanding the conference space from 35,000 square feet to 40,000 square feet if the alterations are accepted. The Danville City Council is scheduled to evaluate the amendments on Tuesday.
Continual Shifts
This is not the first time Caesars Virginia has gone through a major design adjustment.
Shortly after the Danville voters accepted the casino referendum, Caesars seemed to suggest that its Virginia property could host as many as 500 guestrooms in the hotel. Nevertheless, the development agreement requires the hotel to include a minimum of 300 four-star or better rated guestrooms.
In February, Caesars revealed that the total number of hotel rooms would be approximately 320. Danville City Manager Ken Larkin mentioned that the council is willing to accommodate the evolving changes.
"Construction costs have skyrocketed. They are tweaking the design," Larking stated earlier this year.
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Source: www.casino.org
