ith the final terms of a casino development deal still subject to approval by the Richmond City Council, the city is considering extending a previously targeted December 31, 2023 deadline for the opening of the city’s planned casino to Oct. 1, 2024, news emerged Monday.
City officials explained that pushing back the deadline would give the casino developer more time and flexibility while waiting for a license from the Virginia Lottery.
In June, the City Council voted 8-1 to hold the referendum for the $ 600 million casino project presented by media giant Urban One in partnership with Los Angeles-based developer Peninsula Pacific Entertainment.
Administration officials previously projected that the casino would open by Dec. 31, 2023, but recently offered to extend the deadline in exchange for an additional $1 million on top of an upfront payment of $25 million that Urban One has promised the city if the casino measure passes.
The updated terms do not require Urban One to open its planned 250-room, 12-story luxury hotel until Oct. 1, 2025, reports the Richmond Times-Dispatch. City Council members will vote on the proposed terms of the project when they meet on July 26.
“The primary reason for that is recognizing that neither the city nor One Casino and Resort have control or autonomy over the timing of the certification process for the Virginia Lottery,” Leonard Sledge, the city’s director of economic development, told the City Council at a meeting last week. “It’s our absolute goal and intention to see the project open early.”
Like the prior terms reviewed by the council in May, the city is incentivizing the early completion of the project by allowing the company to give the city 1.875% of its annual gambling-related revenue for one year, instead of the 3% the company plans to allocate annually, if the project is completed before Oct. 1, 2024.
Mark Hubbard, a spokesperson for Urban One, said the company needs the flexibility because the Virginia Lottery has up to 12 months to decide on the license application.
He elaborated that they plan to submit their license application no later than mid-December 2021, assuming that the casino measure passes on November 2 and that “this is a big project and there will be many moving parts along the way.”
The city selected the Urban One casino resort project in May after reviewing a total of six proposals.
Richmond requested the development proposals under Virginia’s new casino law, which allows Richmond and four other cities, Danville, Norfolk, Portsmouth, and Bristol, to license casinos if approved by local voters.
City officials say the project would be a boon for Richmond, as it would create 1,300 jobs and potentially spur additional development in the host area. The casino complex is projected to generate $30 million in annual tax revenue for the city.
Councilwoman Reva Trammell, who represents the area where the casino would be located and has been supportive of the project, said the possible extension troubles her and that she fears it could be a sign of other problems to come.
While officials from Urban One say they are confident in the project, a prospectus the company filed with the Securities and Exchange Commission last month for its plans to sell $200 million in common stock to help finance the project discloses some of the associated risks.
The prospectus includes details about the stock, including growth potential and risk factors, notes that the market for a casino in Richmond is “unproven.” The document also notes that the development of other casinos and gaming operations in Virginia could result in less revenue than what the company is projecting.
“There is inherent uncertainty in entering into new markets,” the document says. “If the referendum is successful, management and its partners may not have the expertise to succeed in an unproven market which would adversely affect the operations of the Casino Resort.”