Bally\u2019s Corporation says it remains on track to build a sprawling casino and resort complex at Ferry Point Park in the Bronx, despite recently warning investors of potential financial problems.<\/p>\n
The debt-laden casino entertainment company announced last week it had received a financial lifeline \u2013 a $560 million loan for pre-construction costs related to the multibillion-dollar project. The complex is planned for a former golf course in Throggs Neck, a neighborhood on a peninsula in the southeast Bronx.<\/p>\n
\u201cThis important financing allows us to progress the pre-construction planning process so that we are ready to complete the remainder of the capital raise and remain on schedule,\u201d said Soo Kim, the chairman of Bally\u2019s board and the majority stakeholder, in a statement.<\/p>\n
The statement comes after the company itself raised questions about its future.<\/p>\n
Earlier this summer, Bally\u2019s paused construction of its C<\/a>hicago casino because of a dispute with the city over gambling plans. It also issued a warning to investors about its lack of liquidity. Earlier this month, it announced the resignation of its chief financial officer.<\/p>\n The loan from WhiteHawk Capital Partners, a private credit lender, came as some analysts also raised questions about the viability of the Bally\u2019s Bronx project, which is billed as the biggest private development<\/a> in borough history. It\u2019s anticipated to include 3 million square feet of gaming facilities, a 500-room hotel, a 2,000-person event center, and an 18-hole golf course.<\/p>\n But spokespeople from Bally\u2019s said the company remains confident it can deliver on its promises.<\/p>\n \u201cThe additional liquidity provides us greater flexibility for other capital opportunities,\u201d Kim said in a statement.<\/p>\n Bally\u2019s is one of three downstate casinos that were awarded state licenses<\/a> in December as full-fledged casinos, after a monthslong review process. Tens of thousands of jobs hinge on the massive construction and development bets paying off.<\/p>\n None of the three projects has gone entirely as expected.<\/p>\n Construction of the Hard Rock Hotel & Casino Metropolitan Park near Citi Field began months behind the company\u2019s own schedule<\/a>, as the Queens Daily Eagle<\/a> reported. A spokesperson for the company said construction is on track and scheduled to be completed by 2030.<\/p>\n Resort Worlds, near the Queens aqueduct, is already in operation. But it’s in the midst of a battle over how its state taxes will be calculated, with billions of dollars in private investment resting on how the dispute is resolved. A higher tax rate might hinder the $5.5 billion expansion that is in the works, according to a letter<\/a> from 10 elected officials who pleaded the casino’s case to the New York State Gaming Commission.<\/p>\n A spokesperson for Resort Worlds said conversations with the state are ongoing.<\/p>\n Officials with the gaming commission did not respond to phone calls and emails requesting comment.<\/p>\n At least one financial analyst said despite initial challenges, New York City\u2019s three casinos are likely to thrive.<\/p>\n New York is a \u201cmassive\u201d and \u201chealthy\u201d market for casinos, said Barry Jonas, a senior gaming equity analyst for Truist Securities.<\/p>\n When they do ramp up, Jonas said, \u201cI think these casinos will bode well.\u201d<\/p>\n Doubts around Bally\u2019s<\/p>\n Ferry Point, where the Bronx casino is expected to be built, was home to a city-owned golf course leased by the Trump Organization. Bally\u2019s bought out the Trump lease and gained control of the property for upward of $150 million.<\/p>\n Obtaining land rights and building the casino is just half the battle of getting the casino off the ground. Bally\u2019s spokesperson Joe Jaffoni said in a statement that the company has already made a substantial investment in the project. Additionally, it paid $500 million to New York state for its operating license.<\/p>\n In its proposal, the company promises community investments<\/a> in the Bronx\u2019 Throggs Neck neighborhood, including transit and traffic improvements, better access to Ferry Point Park, and funding to schools, public housing and mental health and substance abuse programs.<\/p>\n In October, the local community board\u2019s parks committee will hear more about expected improvements to Ferry Point Park, according to Joseph Russo, the community board\u2019s chair.<\/p>\n \u201cAs a board, we look forward to greater clarity from Bally\u2019s and our elected officials\u201d regarding \u201cpromised community reinvestment goals,\u201d Russo said in a statement.<\/p>\n Still, Bally\u2019s cash flow remains a concern. Jonas, the analyst, called Bally\u2019s \u201cextremely leveraged\u201d: the company\u2019s debt is nine times its cash flow.<\/p>\n Bally\u2019s stocks tanked this summer after the company flagged<\/a> \u201csubstantial doubt about the Company\u2019s ability to continue as a going concern\u201d to investors in their quarterly financial report, in light of unresolved funding issues. That language is often used<\/a> when a company faces the prospect it might fail to meet its financial obligations within one year.<\/p>\n \u201c\u200aA normal company with a liquid stock would do anything and everything to avoid this,\u201d Jonas said of the investor warning. \u201cWhereas Bally\u2019s is certainly not a normal company.\u201d<\/p>\n Kim, the board chair, Jonas said, is \u201ccomfortable playing in worlds of high leverage.\u201d<\/p>\n With the approval<\/a> of the gaming commission, another company could theoretically take over the project should Bally’s falter. But the company says it expects to make significant profits once the casino is up and running.<\/p>\n Because only three downstate casinos are licensed to operate, Jonas said he expects to see a casino at Ferry Point in the Bronx, regardless of who owns it.<\/p>\n \u201cOne way or the other, I would expect you’ll see this project built, and you know, I think it has just as good a shot as any that it will succeed,\u201d Jonas said.<\/p>\n Lisa Sorin, the president of the Bronx Chamber of Commerce and the chair<\/a> of the Bally\u2019s Bronx community advisory committee, said that she\u2019s concerned about the community investments that were promised to the Bronx \u2013 not the balance sheet of any particular company.<\/p>\n \u201cFinancing is a question for Bally’s and the market to work out,\u201d Sorin said.<\/p>\n She added, \u201cthe community benefits negotiated are extensive and sorely needed. What matters most is that Bronx residents actually see that investment, and that matters as much as who builds it.”<\/p>\n Here\u2019s where the two other downstate casino projects stand:<\/p>\n Hard Rock Hotel & Casino Metropolitan Park, near Citi Field<\/p>\n Karl Rickett, a Metropolitan Park spokesperson, said the project is on target and is expected to be completed by 2030.<\/p>\n \u201cConstruction at Metropolitan Park is well underway,\u201d\u2019 Rickett said in a statement. \u201cThe project’s design reflects years of community engagement and input from our neighbors, developed with an all-New-York design team.\u201d<\/p>\n The project, which is the most costly of the three downstate casinos, with a price point of over $8 billion, is expected to generate 23,000 union jobs, 25 acres of green space, infrastructure improvements, and a revamped 7-line train station, Rickett said.<\/p>\n Construction, which had an already slow start, still has a long way to go \u2013 crews are currently focused on building a parking lot.<\/p>\n Donovan Richards, the Queens borough president, said that contracts with minority and women owned businesses to complete the development are ahead of the pre-determined benchmarks.<\/p>\n Resorts World New York City, at the Queens aqueduct<\/p>\n At Resorts World, an existing casino at aqueduct racetrack, the picture is a little more complicated.<\/p>\n In April, Resorts World<\/a> launched its full fledged casino, unveiling a \u201creimagined third floor\u201d with more than 240 table games like blackjack, craps, and roulette, in addition to thousands of slot machines.<\/p>\n