Tribe will make $250 million worth of improvements to property
The PGCB sets May 29 date to review Sands Bethlehem sale; new owner unveils $340 million expansion project for the casino. The Pennsylvania Gaming Control Board will finally review the sale of Sands Casino Resort Bethlehem at a special meeting scheduled for May 29 in Harrisburg. 21, the Sands and Wind Creek’s PCI Gaming Authority filed an official change of ownership petition with the Pennsylvania Gaming Control Board that details how this sale will go down. Sands Bethlehem was always out of character with the rest of the Sands portfolio. In fact, it was the only regional casino in the company. The Sands model is to build opulent casino resorts in destination towns. While Sands Bethlehem certainly benefitted from a proximity to New York City, it was never more than a regional property. Sands relies on tables and slots at its Macau properties. The Sands sale makes sense considering both organizations’ business models, and MGM is wise to acquire the Sands. It is Pennsylvania’s second-highest grossing casino in this fiscal year. In fact, the Sands topped Parx for the most table games revenue in February. Las Vegas Sands Corp. Announced Friday that it closed the $1.3 billion sale of its Sands Bethlehem property in Pennsylvania. The casino resort was purchased by Wind Creek Hospitality, an affiliate.
The Pennsylvania Gaming Control Board last week approved the $1.3 billion sale of Sands Casino Resort Bethlehem by Las Vegas Sands Corp. to an arm of Alabama’s Poarch Band of Creek Indians.
The unanimous vote of approval, completed at a special session of the board on Wednesday, clears the way for the closing of the sale, officially by Sands Bethworks Gaming, the partnership of LVS and local investors that owns the license to the property, to PCI (Poarch Creek Indians) Gaming Authority, the arm of the tribe that will be the official licensee.
The board approved the Pennsylvania license for PCI Gaming Authority after approving the sale. PCI is owned by Wind Creek Hospitality, the arm of the tribe that operates its gaming properties. The Bethlehem property, built on the historic site of the Bethlehem Steel Works, is the tribe’s first venture outside of its Alabama Class II properties, and its first commercial venture.
The vote came a full 14 months after the sale of the Sands was announced, its delay due to a particularly crowded agenda this year for Pennsylvania regulators, with the ramp-up of sports betting, mini-casinos, truck stop VGTs and online gaming in the wake of the massive gaming expansion bill passed at the end of 2017.
Las Vegas Sands was represented by Duane Morris LLP partners Scott Kramer, Greg Duffy, of the Philadelphia office and Frank DiGiacomo, Chris Soriano, and Adam Berger, of the Cherry Hill office.
In the meantime, the iconic “Sands” logo has been removed from the entrance to the property, to be replaced by the property’s new name, Wind Creek Bethlehem. The tribe has designated $15 million to complete rebranding expenditures, which it predicts will be complete within 90 days.
With the last remaining hurdle to the sale’s closing removed, the tribe has pledged to immediately begin improvements that had been stalled under LVS, beginning with a $90 million hotel expansion project and continuing with stalled projects to preserve and utilize some of the historic sites of the former steel plant. former Bethlehem Steel No. 2 Machine Shop into a 300,000-square-foot indoor adventure/water park and hotel. Conceptual renderings show the long, vacant building transformed into a gigantic greenhouse-like structure between the SteelStacks and casino.
The tribe has pledged $100 million for the Machine Shop transformation, in addition to the $90 million hotel expansion. However, media reports indicate that the Poarch Band has set aside $250 million for the water park and adjoining hotel.
Within the park will be about 105,000 square feet of water rides, along with other activities like rock-climbing and zip lines, according to the plans submitted with the state.
According to plans submitted to the board, it will take the tribe about two years to build a 276-room hotel along with another 42,000 square feet of meeting space. That project will complement the Bethlehem property’s existing 282-room casino hotel and about 27,000 square feet of meeting space.
Wind Creek’s acquisition financing includes $100 million for the Machine Shop redevelopment, but the operator reportedly will seek development partners to secure the remaining $150 million for the overall expansion.
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PCI Gaming will pay the state $3.75 million for its change-of-control fee. The final closing of the sale was expected as early as Friday. “It’s been a long haul for us,” Wind Creek President and CEO Jay Dorris told the Allentown Morning Call. “We’re thrilled, and we’re ready to hit the ground and introduce Wind Creek Bethlehem.”