Bally's Gives Tribune Publishing The Boot After Negotiations Stall With Tribune Parent Company
Bally’s Corp. will exercise a relocation option allowing it to force Tribune Publishing out of the Freedom Center, the Chicago Tribune's gargantuan printing plant in Chicago’s River West neighborhood, to make way for its planned 1M SF casino and hotel complex.
The casino company delivered the relocation notice several weeks ago, the Tribune reported Monday. The Tribune story followed published reports Sunday that Tribune parent company Alden Global Capital was at loggerheads with Bally's in negotiations that involved buying out Alden’s lease and finding it a new facility.
According to Crain’s Chicago Business, the New York-based hedge fund and Bally's were reportedly far apart in negotiations that would move Alden forward with a relocation. Sources told Crain's that Colliers was helping search for new sites after Bally’s paid $200M last year for the facility and 30-acre riverfront location.
Now the Tribune will end its 40-year history at the site, though the paper noted it will not have to relocate immediately. Tribune Publishing will have up to two years to find new digs before the casino breaks ground, and Bally’s Chairman Soo Kim told the outlet Bally's will help fund that relocation.
Alden's lease at Freedom Center was set to expire in June, and it had indicated it wanted to extend it for another 10 years. The Tribune acknowledged the parties had been engaged in arbitration to determine a lease rate for the extension, but that extension is now a moot point.
“Even with the extension option, there’s a clause in the lease that allows for us to relocate,” Kim told the Tribune. “And so we started the process of engaging that clause.”
The public end of the impasse comes two weeks ahead of a mayoral election in which Chicago Mayor Lori Lightfoot is locked in a statistical tie with opponents Jesus "Chuy" Garcia and Paul Vallas. Lightfoot has pointed to the casino project as an example of getting things done, citing high-paying jobs and benefits, a commitment to labor and lifting up socioeconomically disadvantaged residents, and the chance to stabilize city finances by shoring up pension funds.
Bally’s is expected to make $74M in infrastructure improvements and contribute $200M annually to the city.
The casino company closed a $500M sale-leaseback transaction with a Chicago real estate private equity firm to acquire and develop the future site of the $1.7B Chicago casino in November 2022. The deal included the $200M sale of the River West site and a commitment to fund $300M in casino development. The Chicago Tribune reported that the buyer was Oak Street Real Estate Capital.
Chicago's city council approved the casino in May 2022, along with a temporary casino at the vacant Medinah Temple at 600 North Wabash Ave.
The larger casino complex project is expected to be completed in 2026, and it will include 3,400 slots, 170 table games, 10 food and beverage venues, a 500-room hotel tower with a rooftop bar, a 65K SF entertainment center, a 20K SF exhibition space and an outdoor music venue.
UPDATE, FEB. 13, 3:30 P.M. CT: This story has been updated to reflect that Bally's has now confirmed it will exercise a clause requiring Tribune Publishing to vacate its printing plant within two years.
