Last week, the Aurora City Council’s finance committee unanimously approved Penn’s plans to build a new casino to replace its existing riverboat property, Hollywood Casino Aurora. In a statement given to local media, the council expressed excitement over the project:
“We are excited to see the progress that is coming from many long months of discussion…and are looking forward to continued collaboration between businesses like Hollywood Casino.”
When the Hollywood Casino Aurora opens at its new location, residents of the city might not be partial stakeholders in the facility’s success. The new development plan for the Illinois casino has partial approval from the city and it wouldn’t use residents’ property taxes to finance part of the casino’s construction cost.
The plan is to instead fund the city’s contribution to the development using a special tax on the casino’s site. In a way, the success of the casino in the future is directly tied to backing its construction.
Hollywood Casino Aurora construction might not use residential property taxes
According to Susan Sarkauskas of the Daily Herald, the finance committee of Aurora’s city council met on Thursday. That committee approved a financing plan, with a recommendation that the full council takes the same action on Tuesday, Oct. 18.
The city has already agreed to provide $50 million of the $360 million cost of building the new casino. Currently, the casino operates downtown. The new site is near the Chicago Premium Outlets Mall on Farnsworth Avenue.
To fulfill that $50 million obligation, the current development plan suggests the city sell bonds to raise the money. Instead of pulling loan payments from resident property taxes, however, the property taxes on the casino site itself would fund that debt service.
The site of the new casino has a special property tax designation that redirects annual increases into a separate fund. The rate on the annual escalation would stay consistent for the 23 years of the tax increment financing (TIF) proposal.
Should the annual distribution to that TIF in any given year prove insufficient to cover the debt servicing, the casino would be on the hook to make up any difference. In plainer English:
- the city is taking out a loan for $50 million to provide financing to build a new casino
- annual taxes on the site of the new casino property will go toward payments on that loan
- should that prove insufficient to cover fees and interest, the casino will foot the bill
It’s uncertain how much support this plan has from the larger city council. Penn Entertainment, the casino’s operator, might move ahead even if there is a delay in approving this particular plan.
Why Penn is building a new Aurora casino?
Penn’s move from the river to dry land puts them in a prime position to grab traffic from the I-98 corridor, Mayor’s Office of Economic Development (OED) Assistant Director Trevor Dick said. That traffic opens the casino up to a larger geographic area. And that can help capture a slice of the more than eight million customers that go to the outlet mall.
In short, the casino will become the centerpiece of the city’s downtown redevelopment. That means more customers for the casino and more revenue for the city. It could represent quite an upgrade over the two riverboats that first appeared in the city in 1993.
Another reason for the move? Declining revenue. Penn National bought the riverboat facility in 2003, and a few years later, revenue started to decline. The decline was due to more competition from video gaming and other casinos, Dick said.
Because of this, moving the casino from the river was a crucial part of Aurora’s economic development and the casino’s success. Dick said:
“In an effort to try and right the ship, the mayor and senior staff have spent hundreds of hours focused on changing the law to allow the casino to move off of the Fox River to a more successful location without the need to get an additional casino license.”
What’s next for Aurora’s Hollywood casino?
The new casino will be located in the same area as the city’s Simon Premium Outlet Mall, off I-88. Penn Entertainment CEO Jay Snowden said in a statement:
“Our plan for Aurora is to construct a modern, best-in-class casino and hotel in an ideal location off I-88 that will allow us to serve the millions of visitors to the adjacent Simon Premium Outlet Mall.”
It’s part of Penn’s larger plan to take advantage of a 2019 law and move its Illinois casinos onto preferable sites, mimicking a similar action in Joliet. If the city council in Aurora approves this development plan, that will happen without the use of any residential property tax dollars.
In addition to 900 slots and 50 gaming tables, Penn Entertainment plans to build a 200-room hotel. The new casino amenities will include:
- Around 900 slots
- Approximately 50 live table games
- A Barstool sportsbook
- Roughly 200 hotel rooms.
- Full-service spa
- Bars and restaurants
- 10,000 square feet of meeting areas
- An event center
Penn expects to break ground in late 2023.
Written by Derek Helling and J.R. Duren