The Iowa Racing and Gaming Commission gave approval at its recent meeting to a plan for the owner of the Ameristar Casino in Council Bluffs to sell its real estate and start paying rent.
Casino owner Pinnacle Entertainment is selling the property to what’s called a real estate investment trust or REIT.
Gaming Commission chair, Jeff Lamberti of Ankeny, says it’s the first of its kind deal and they wanted to be sure the deal would still allow them to properly regulate the facility. “We’re very big on the conditions of the properties — and also as conditions allow — additions to the properties,” Lamberti says. He says they reviewed the proposal fully before giving approval.
“We wanted to ensure that through the licensing that even though the operator is going to now be a tenant as opposed to both owning and operating — that we had enough control that we could say we are not happy with the condition, or that we want you to pursue some additional amenities and that that will all fit under the structure of this — particularly under that master lease that we were talking about,” Lamberti says. “And we’re comfortable that those issues have been addressed in that lease.”
He says the new arrangement will ensure the casino property taken care of as Lamberti says there is “quite a bit of room” under the lease where the casino as a tenant can make improvements on their own for routine maintenance and upkeep without asking the landlord. And he says for bigger projects the landlord has to consent, but cannot be reasonably be withheld, and the landlord has the right to finance the projects to help improve their property.
Lamberti says there is one other key thing that ensures regulatory control over the casino. “We still hold the (gambling) license which is subject to approval every year. So, when we combine all those elements we fell very comfortable from an operation standpoint, really nothing is going to change,” Lamberti says. Lamberti is a lawyer and says this type of agreement hasn’t been used for gambling properties.
“It’s new to this, but they’ve been around for a long time,” Lamberti says. “It’ll be interesting to see…because REITS have a tendency to want to grow and so they are probably going to be looking to acquire additional properties.”
The deal will provide Pinnacle Entertainment with more than one billion dollars in financing.