Las Vegas-based Pinnacle Entertainment Inc. agreed to buy the operations and gaming license of The Meadows Racetrack and Casino in Washington, Pennsylvania, for $138 million from Gaming and Leisure Properties Inc.
Gaming and Leisure Properties, Penn National Gaming’s real estate arm, will continue to own the real estate, which is just outside of Pittsburgh, and lease it to Pinnacle.
“The Meadows is an attractive gaming entertainment business, with a broad base of operations and high-quality gaming and nongaming amenities,” Pinnacle Entertainment CEO Anthony Sanfilippo said. “The Meadows will complement our existing collection of terrific properties and provide additional operational scale, geographic diversification and another wonderful location, the greater Pittsburgh area, for the guests of Pinnacle Entertainment to visit.”
The purchase agreement, expected to close in the third quarter, follows Gaming and Leisure Properties’ $440 million purchase of The Meadows at the end of 2015. Gaming and Leisure Properties said then it was looking for a third-party operator for the 180,000-square-foot casino, harness-racing track and other amenities on the property.
Under the agreement, Pinnacle will pay Gaming and Leisure Properties annual rent of $25.5 million for 10 years, with options to renew. Pinnacle will be responsible for maintenance capital expenditures, property taxes, insurance and other expenses under a triple net lease.
The deal is subject to approval by the Pennsylvania Gaming Control Board and Pennsylvania’s Harness Racing Commission. Gaming and Leisure Properties also awaits approval from both agencies on its initial purchase from Cannery Casino Resorts LLC back in December.
Pinnacle operates casinos in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada and Ohio.
North Las Vegas’ bond rating utlook remains stable
The city of North Las Vegas continues to have a “stable” outlook on its bond ratings from Fitch Ratings.
The city’s $128.4 million limited tax general obligation bond and $278.4 million limited term general obligation water and wastewater improvement bond were marked with a credit rating of B and given a “stable” rating outlook in early April.
The city received the same rating in mid-2015, lifting it from a prior “negative” outlook rating.
The bonds are backed by North Las Vegas’ property taxes, up to Nevada’s constitutional and statutory limits, along with an irrevocable pledge of and lien on certain consolidated tax revenues and water and wastewater system net revenue.
Several key elements drove the Fitch’s rating of North Las Vegas — one of which, stated in Fitch’s release, the city’s relative lack of budget flexibility.
“Given tax caps and the scope of service cuts already made, Fitch believes any meaningful solutions are outside the city’s control,” Fitch said in a statement.
Fitch also was concerned with the city’s taxable assessed valuations, which declined by 56 percent during the recession.
Despite some rebound, the credit rating agency remains concerned that long-term growth will remain weak. Fitch reported that the city’s unrestricted balances in the utility fund serve as the only meaningful source of liquidity.
On a positive note, the funds are adequate to support government operations over the intermediate term.
The city’s rating could rise a medium-term plan to address the utility transfers decline can be implemented by fiscal 2021.