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Richmond confirms six eligible bids for casino, seeks public input

Place your bets. Richmond Mayor Levar Stoney’s office confirmed Friday that the six casino proposals made public this week all submitted proposals that are eligible for consideration by Richmond City Council and voters.

The city also revealed the proposed locations for all six plans.

Bally’s Corp. and Golden Nugget Hotels & Casinos are interested in building a casino on property off Chippenham and Powhite parkways south of the James River and near the western edge of the city limits. In a statement, a Bally’s spokesperson said, “Bally’s is flattered that another bidder appreciates the location that we have the exclusive right to purchase. Though Parkway Crossing is Bally’s preferred site, we have multiple options for other sites, and notably maintain flexibility with the exclusive right to purchase a second site located in Richmond pursuant to the same executed letter of intent.  As such, we are confident that we will have an attractive site upon which to build the high-quality product for which Bally’s is known for the benefit of the greater Richmond community.”

Other contenders include Virginia’s Pamunkey Indian Tribe, Baltimore-based Cordish Cos., Wind Creek Hospitality and a partnership between Colonial Downs and Maryland-based media company Urban One Inc.

The other locations include:

  • ONE Resort & Casino at Walmsley Boulevard and Interstate 95, at the Philip Morris Operations Center property owned by The Altria Group
  • Pamunkey and Wind Creek’s proposals on separate properties on Commerce Road, also on Richmond’s South Side near I-95
  • The Cordish Cos., at 1301 N. Arthur Ashe Boulevard, near The Diamond and the Scott’s Addition neighborhood.

The first virtual community meeting to discuss the six proposals will take place March 9, and full details will be available on the city website. An evaluation panel named by the city will make its final recommendations to the Richmond City Council in May or June, with the council choosing a preferred casino operator and project by June.

That will be followed by a citywide campaign to inform community members about the project before the November election, when city residents will decide whether to approve the casino via a ballot referendum.

If approved, the Richmond casino would be the fifth and final approved casino project in Virginia, which legalized commercial casino gaming last year in five cities. Bristol, Danville, Norfolk and Portsmouth voters all voted overwhelmingly in favor of allowing casinos in their cities last November.

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Hotel revenues down 27% for January

Virginia hotel revenues for January 2021 were down 27% compared with January 2020, continuing the industry’s slow climb back to recovering from the economic impact of the coronavirus pandemic, according to data released Thursday from STR Inc., a CoStar Group division that provides market data on the U.S. hospitality industry.

For the same period, rooms sold declined by 14%. The average daily rate (ADR) paid for hotel rooms dropped 15% to $82.56, while revenue per available room (RevPAR) fell to $34.84, a 27% decline.

“Performance of the hotels in the commonwealth during January 2021 was in general better than December 2020,” said Professor Vinod Agarwal of Old Dominion University’s Dragas Center for Economic Analysis and Policy in a statement released Monday. “COVID-19 continues to adversely impact this industry.”

Hotel revenues and rooms sold declined in most markets in Virginia during January 2021, compared with January 2020. Revenues fell 34% in Northern Virginia, 36% in Charlottesville and 11% in Hampton Roads. During December 2020, revenues fell 61% in Northern Virginia, 37% in Charlottesville and 23% in Hampton Roads. The number of rooms sold during January 2021 fell 28% in Williamsburg and 12% in the Newport News/Hampton region. However, rooms sold increased in Chesapeake and Suffolk by 3.8%.

UPDATED: Golden Nugget, Wind Creek enter proposals to build Richmond casino

Updated 3 p.m., Feb. 24

Joining at least four other groups competing to be chosen as Richmond’s choice for a casino operator, bids from two other casino companies were made public Wednesday.

Houston-based Golden Nugget Hotels & Casinos has proposed a $400 million casino project about six miles from downtown, and Wind Creek Hospitality, affiliated with an Alabama Indian tribe, has submitted a proposal for a $541 million project in the city’s South Side.

Golden Nugget proposes a 950,000-square-foot facility, according to a news release. It would include a 177-room hotel with 37 suites, a 93,000-square-foot casino floor, a 16,000-square-foot event space, a 1,500-seat concert venue and at least six restaurants, including Morton’s The Steakhouse, and four retail outlets. A pool complex would include a lazy river and cabanas. The company estimates that 1,200 jobs would be created, and completion would take about three years after approval.

The precise location was not identified in the news release. In a statement, Lorenzo Creighton, who would serve as an executive at the casino if selected, said, “The RFP did not require a definitive site for submittal. We are highly confident and have a fantastic preferred location identified and are in negotiations with a couple of different groups that we prefer not to disclose specifics at this time. In addition, we are flexible and prepared to evaluate sites owned by the city of Richmond Redevelopment Authority in an effort to enhance and optimize economic development opportunities for the city of Richmond.”

Wind Creek’s bid would include 100,000 square feet of gaming space, 2,500 slot machines and 120 table games, as well as more than 500 hotel rooms in two towers. The project also would include a 67,000-square-foot entertainment center, a spa, indoor pool, fitness center and seven food and beverage locations. The casino would be on two parcels on Ingram Avenue near the Oak Grove and Manchester neighborhoods in the city’s South Side, plots of 27.8 acres and 18.8 acres owned by the Richmond-based City Central LLC entity with tobacco warehouses.

The company manages seven casino resorts and a gaming website for the Poarch Band of Creek Indians, as well as racetracks in Alabama and Florida. It’s the second Indian tribe-affiliated proposal for Richmond; Virginia’s Pamunkey Indian Tribe also has put forward a bid to build what would be its second casino in the state.

If selected and approved by city voters, Golden Nugget says it would would provide several one-time charitable donations, including $60 million to Richmond Public Schools, $10 million to the Richmond Affordable Housing Trust Fund, $1 million to Virginia Union University and $30,000 to the Metropolitan Business League, a Richmond-based organization that assists local minority-owned companies.

Wind Creek Hospitality rendering of proposed casino in Richmond

Golden Nugget, which owns five casinos across the country, would contribute 5% of equity ownership in the casino between two Minority Business Enterprise-certified entities in Richmond partly owned by Virginians Dennis Cotto and Richard Williams, the former Virginia Lottery director. Williams’ Virginia Sports & Technology Group was created to support inclusion of minority groups in jobs and profit-sharing, including an equity stake of at least $180,000 a year. Cotto’s Bet on Gaming Holdings LLC was created for minority communities in Virginia to be included in the process of real estate development and procurement, and the entity will receive a profit share of at least $120,000 a year once the casino opens.

Golden Nugget is owned by Tilman J. Fertitta, a Texas businessman who also owns the Houston Rockets NBA team and Landry’s Inc., a multibrand dining, hospitality, entertainment and gaming corporation based in Houston.

Richmond is considering at least six casino proposals, including projects from the Virginia-based Pamunkey Indian Tribe, Bally’s Corp., Baltimore-based Cordish Cos. and a partnership between Colonial Downs and Maryland-based media company Urban One Inc.

The city will announce all the competing casino proposals received by the Monday deadline once it has confirmed they meet submission criteria. A nine-member evaluation panel named by Mayor Levar Stoney will review the casino proposals over the following days, assisted by consulting firm Convergence Strategy Group. Ultimately, Richmond City Council, the Virginia Lottery and local voters, who will have the opportunity to weigh in during a November referendum, must approve the project for it to move forward.

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UPDATED: Richmond now has six major casino proposals

Updated Feb. 26

The city of Richmond is now considering six casino proposals, the mayor’s office announced Friday.

Monday afternoon was the city’s deadline for its request for proposals, and all six submitted were deemed eligible. Starting next month, Richmond will hold public meetings with opportunities for citizen input.

In addition to the Pamunkey Indian Tribe, which announced its plans to submit a project last year, the companies include Bally’s Corp., Baltimore-based Cordish Cos., Texas-based Golden Nugget Hotels & Casinos, Wind Creek Hospitality and a partnership between Colonial Downs and Maryland-based media company Urban One Inc.

The proposals varied in size, scope, cost and locations:

  • Rhode Island-based Bally’s proposal would bring a $650 million, 1.6 million casino with sportsbook, performance space, a hotel, pool and dining and retail outlets to a 61-acre parcel of land north of Powhite Parkway and east of Chippenham Parkway near the city’s western border. The proposal would include a one-time $100 million payment to the city of Richmond. The company estimates it would create 2,000 jobs and annually generate 3.7 million visitors and $415 million in total gross revenue. The corporation is working with Willie Lanier, the former pro football player from Richmond; Darrell Green, cornerback from the former Washington Redskins; and Warren Thompson, founder, president and chairman of Thompson Hospitality Corp.
  • The Pamunkey tribe’s proposal is on a different site than it previously proposed, but the casino would still be on the city’s South Side, off Interstate 95 and south of the Bells Road exit on 24.5 acres, according to spokesman Jay Smith. The current $350 million proposal includes a 300-room, four-diamond hotel tower with a spa, pool, fitness center and several restaurants. The tribe anticipates the project would create 1,910 permanent jobs, as well as 5.3 million annual visitors, up from an earlier estimate of 4 million. Smith notes that the Pamunkey project is the only submission from a Virginia-based entity and would be 100% minority-owned. The tribe is preparing to begin construction on a casino in Norfolk later this year.

    ONE casino rendering, backed by Maryland’s Urban One Inc.
  • Urban One, which owns and operates 55 radio stations and the TV One cable network, is proposing a $517 million project that would be the first casino under Black ownership in the country. According to the Richmond Times-Dispatch, the company will partner with Peninsula Pacific Entertainment, Colonial Downs Group’s owner, which also owns the Rosie’s Gaming Emporium franchise in Virginia. If approved, the casino would be built on 100 acres near Interstate 95 owned by Altria Group Inc., parent company of Philip Morris USA. In details released Tuesday, Urban One’s casino resort would be called ONE, and it would include a sportsbook, 150 hotel rooms, a 3,000-seat theater, 90,000 square feet of gaming space, 12 bars and restaurants, including many with local ties, as well as 20,000 square feet of event space. Urban One, which has a minority stake in MGM National Harbor on the outskirts of Washington, D.C., in Maryland, would also partner with Live Nation to put on 200 live entertainment events.
  • The Times-Dispatch also reports that The Cordish Cos., which owns casinos in Baltimore, Philadelphia, Pittsburgh and Florida, has submitted a plan for a $600 million project that would include a hotel with 300 rooms and 30 suites, a 4,000-seat entertainment venue and 250,000 square feet of gaming space. This project would be built on the current Movieland movie theater property near The Diamond across the Boulevard from Richmond’s Scott’s Addition neighborhood. Cordish, which developed Norfolk’s Waterfront district, last year threatened to sue the city of Norfolk over its 2013 development agreement with the city, which said that the company could expand a $40 million dining and retail project into a casino if the state legalized gambling. Cordish also backed casino opposition efforts in Norfolk.
  • Announced Wednesday is a $400 million proposal from Houston-based Golden Nugget Hotels & Casinos, which would bring a 950,000-square-foot facility about six miles from downtown, according to a news release, and would include a 177-room hotel with 37 suites, a 93,000-square-foot casino floor, a 16,000-square-foot event space, a 1,500-seat concert venue and at least six restaurants, including Morton’s The Steakhouse, and four retail outlets. A pool complex would include a lazy river and cabanas. The company estimates that 1,200 jobs would be created, and completion would take about three years after approval. The proposal also includes one-time donations of $60 million to Richmond Public Schools, $10 million to the Richmond Affordable Housing Trust Fund and $1 million to Virginia Union University. The proposed location would be on the same property as the Bally’s proposal, north of Powhite Parkway and east of Chippenham Parkway near the city’s western border, according to the mayor’s office. A Bally’s spokesperson released a statement saying that it has the “exclusive right to purchase” the Parkway Crossing site, although the company has other options and has an exclusive right to purchase a second site.
  • Also announced Wednesday is Alabama-based Wind Creek Hospitality’s $541 million project in the city’s South Side on two plots with 46 acres combined. Wind Creek’s bid would include 100,000 square feet of gaming space, 2,500 slot machines and 120 table games, as well as more than 500 hotel rooms in two towers. The project also would include a 67,000-square-foot entertainment center, a spa, indoor pool, fitness center and seven food and beverage locations. The company manages seven casino resorts and a gaming website for the federally recognized Poarch Band of Creek Indians, as well as racetracks in Alabama and Florida.
Rendering of the Pamunkey Indian Tribe’s proposed casino and hotel project in Richmond.

Of the five cities across Virginia where commercial casinos have been legalized, Richmond was the only one to delay its approval process until 2021. Casino projects in Danville, Bristol, Norfolk and Portsmouth were overwhelmingly approved by voters in last November’s referendums, and are on their way to construction over the next couple of years.

A nine-member evaluation panel named by Mayor Levar Stoney reviewed the casino proposals over the following days, assisted by consulting firm Convergence Strategy Group, and the panel will make a recommendation in May or June to the Richmond City Council, which will then choose the site and operator in June, according to the city.

The city’s first virtual community meeting to discuss the six proposals will take place March 9, and full details will be available on the city website.

At that point, the Virginia Lottery must approve the proposed casino operator, and local voters will have the opportunity to weigh in with a November referendum on the ballot.

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Short Pump Hilton enters receivership

The Hilton Richmond Hotel and Spa in Short Pump has entered receivership after its owner, Shamin Hotels, fell behind on loan payments, according to documents filed in Henrico County Circuit Court.

In an order dated Jan. 21, Fairfax-based based Crescent Hotel Management Services LLC was named special receiver for the Short Pump Hilton, which was the flagship of Chester-based Shamin Hotels’ empire. According to its website, Crescent manages dozens of hotels and resorts in the United States and Canada, including Hilton-, Marriott- and Hyatt-branded properties.

As receiver, Crescent will “operate, manage, maintain and control” the 254-room property, which opened in 2009.

Previous court documents state that the noteholder wants Crescent to keep the property open and run it while a foreclosure sale is conducted.

In a complaint filed on Dec. 2, 2020, 12042 West Broad Street Holdings LLC, the Bethesda, Maryland-based noteholder on the property, alleged a breach of contract, saying Shamin Hotels fell behind in its loan payments beginning in April 2020. That filing states that Shamin borrowed $45 million from JPMorgan Chase Bank National Association on Oct. 11, 2013.

Shamin CEO Neil Amin, Shamin’s lawyers, Crescent Hotel Management Services and the lawyers representing 12042 West Broad Street Holdings and did not return calls for comment for this story.

Amin has said the hotel was appraised at $68 million at the time of the loan, and the purpose of the loan was to refinance the original construction loan. He also said his company was cooperating with the noteholder to allow them to take control of the property through receivership and a possible public auction. Shamin fell behind in its loan payments because of the pandemic, he said.

“This is a unique situation that is affecting all conference hotels nationwide, and with our revenue declining by $10 [million] since the start of the pandemic and a noteholder that is not being supportive, we felt that this is the best decision for our company and our organization,” Amin told Virginia Business in December.

As of Dec. 1, 2020, Shamin owed $46.8 million on the loan, including a principal amount of $40.2 million, $1.18 million in accrued interest, $1.19 million in default interest and more than $127,000 in accrued late fees, according to the December filing. The filing noted that the property may be worth as little as $26 million.

Amin said that his company, one of the largest independent hoteliers in the United States with more than 60 properties, initially attempted to work with the noteholder until they “demanded significant lender fees and unsuitable guarantees in order to access those funds. We then offered other solutions such as providing a [significant] influx of capital to support the hotel over the next few years or paying off the loan at value significantly higher than the lender’s valuation.”

Amin has said that his other hotels are performing better than the Short Pump Hilton because they are less dependent on revenue from conferences. Shamin has new properties scheduled to open in 2021, including a Home2 Suites and a Hampton Inn and Suites in Short Pump, and The Landing at Hampton Marina, a Tapestry Hotel by Hilton, in Hampton.

Shamin began in January 1979 when Amin’s father, P.C. Amin, and uncle, B.N. Shah, purchased their first hotel in Lumberton, North Carolina. Shamin is an amalgam of the founders’ last names.

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Va. hotel revenues fell 42% in December 2020

Virginia hotel revenues for December 2020 were on trend for a year that saw the hospitality industry suffer from the pandemic. Compared with December 2019, hotel revenues statewide declined by 42% during December 2020, according to data released Monday from STR Inc., a CoStar Group division that provides weekly market data on the U.S. hospitality industry.

For the same period, rooms sold declined by 26%. The average daily rate (ADR) paid for hotel rooms dropped 21% to $77.13, while revenue per available room (RevPAR) fell to $27.94, a 41% decline.

“Performance of the hotels in the commonwealth during December was in general better than November 2020,” said Professor Vinod Agarwal of Old Dominion University’s Dragas Center for Economic Analysis and Policy in a statement released Monday. “Rising COVID-19 infections, hospitalizations and deaths in the recent past continued to adversely impact this industry.”

Hotel revenues and rooms sold declined in most markets in Virginia during December 2020, compared with December 2019. Revenues fell 61% in Northern Virginia, 37% in Charlottesville and 23% in Hampton Roads. During November 2020, revenues fell 66% in Northern Virginia, 41% in Charlottesville and 32% in Hampton Roads. The number of rooms sold during the month of December 2020 in Northern Virginia was down by 46% Charlottesville is down by 23% and Hampton Roads is down by 12%. 

Williamsburg continues to be the hardest-hit locality in Hampton Roads, seeing a 49% decline in revenue.

 

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Hilton to sell $1.5B in private debt offering

While the hospitality industry continues to struggle amid the pandemic, McLean-based Hilton Worldwide Holdings Inc. announced Tuesday it will sell $1.5 billion in debt in a private offering to institutional buyers. 

This mark’s Hilton’s second major debt offering within the past couple of months. In November 2020, Hilton announced its $1.9 billion debt offering, from which proceeds will be used to redeem notes due in 2024 and 2025.

Through this offering, the hotelier will sell $1.5 billion of senior notes due in 2032. Hilton will use the proceeds to redeem all of its outstanding 5.125% senior notes due 2026, according to a company statement. 

In June 2020, Hilton announced it was laying off 2,100 corporate employees — more than 20% of its corporate workforce. 

Nassetta

“2020 was incredibly difficult for all of us at Hilton, on a professional and personal level,” Hilton President and CEO Christopher J. Nassetta said in a Jan. 6 statement. “We had to make really heartbreaking decisions about our team while navigating our business through an unprecedented standstill in global travel.”

Hilton will use the proceeds from the offering to redeem all of its outstanding 4.25% senior notes due in 2024 and use the remaining proceeds to redeem its outstanding 4.625% senior notes due in 2025, according to a company statement. 

Due to the economic crisis, Hilton’s first-quarter 2020 revenues dropped by $284 million compared with 2019, with decreases continuing through the second quarter of 2020. The company reported slight improvements during the third quarter of 2020, but still saw a net loss of $81 million when compared with 2019. The company’s fourth quarter 2020 financial statements have not yet been released.

“A vaccine — in addition to ongoing common-sense safety precautions — will help people feel more confident in traveling domestically and internationally,” Nassetta said in a statement. “That confidence is going to be key in building momentum in recovery around the world, and in keeping our team members safe as they continue to spread the light and warmth of hospitality.”

 

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Colliers International Virginia names senior VP, asst. VP of capital markets team

Colliers International Virginia announced Thursday it has hired Prashant Merchant as senior vice president of the company’s capital markets team and Nic Wade as assistant vice president.

Merchant and Wade most recently led the hospitality division for California-based real estate brokerage Marcus and Millichap Inc. In their new role, they will focus on hotel and motel analysis and disposition in the mid-Atlantic region, specifically on seller representation.

“Recently, the pandemic has had a profound impact on hotels and as a result, we see conversion opportunities which should bring investors from various real estate asset types to the hotel space,” Merchant said in a statement. “Having teamed up with Colliers now allows us to add value to our investors by bringing an entire new asset type to the table.”

Merchant graduated from the Kelly School of Business at Indiana University and Wade graduated from Christopher Newport University.

 

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Va. hotel revenues remain 51% lower than last year

Virginia hotel revenues continue to decline by more than 50% when compared with last year, according to data released Wednesday from STR Inc., a CoStar Group division that provides weekly market data on the U.S. hospitality industry.

Hotel revenues in Virginia dropped by 51% and rooms sold declined by 33% last week, compared with the same week last year, unchanged from the previous week’s results. Compared with last year, the average daily rate (ADR) paid for hotel rooms dropped 27% to $76.64, while revenue per available room (RevPAR) fell to $29.36, a 51% decline.

“Performance of the hotels in the commonwealth during this week was in general almost the same as last week,” Professor Vinod Agarwal of Old Dominion University’s Dragas Center for Economic Analysis and Policy said in a statement. “Rising  COVID-19 infections, hospitalizations and deaths in the recent weeks continue to have adverse impacts on this industry.”

Hotel revenues and rooms sold declined in most markets in Virginia last week, compared with the same time frame last year. Compared with the same week in 2019, revenues fell 70% in Northern Virginia, 48% in Charlottesville and 33% in Hampton Roads. During the week of Nov. 29 through Dec. 5, revenues fell 70% in Northern Virginia, 42% in Charlottesville and 33% in Hampton Roads. The number of rooms sold in Northern Virginia is down by 53%, Charlottesville is down by 34% and Hampton Roads is down by 21%. 

Williamsburg continues to be the hardest-hit locality in Hampton Roads, seeing a 58% decline in revenue, followed by Norfolk/Portsmouth with a 38% decline.

 

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Va. hotel revenue is still down by more than 50% from 2019

Despite the fast-approaching holiday season, Virginia hotel revenues continue to decline when compared with last year, according to data from STR Inc., a CoStar Group division that provides weekly market data on the U.S. hospitality industry.

While COVID-19 cases spiked during the week of Nov. 29 through Dec. 5, hotel revenues in Virginia dropped by 51% and rooms sold declined by 33%, compared with the same week last year. The week prior saw a 34% decrease in revenue compared to 2019 and a 24% decline in rooms sold. Compared with last year, the average daily rate (ADR) paid for hotel rooms dropped 27% to $76.27, while revenue per available room (RevPAR) fell to $28.68, a 51% decline.

Hotel revenues and rooms sold declined in most markets in Virginia last week, compared with the same time frame last year. Compared with the same week in 2019, revenues fell 70% in Northern Virginia, 42% in Charlottesville and 33% in Hampton Roads. During the week of Nov. 22 through Nov. 28, revenues fell 46% in Northern Virginia, 42% in Charlottesville and 23% in Hampton Roads. The number of rooms sold in Northern Virginia is down by 53%, Charlottesville is down by 29% and Hampton Roads is down by 21%. 

Williamsburg continues to be the hardest-hit locality in Hampton Roads, seeing a 60% decline in revenue last week, followed by Norfolk/Portsmouth with a 33% decline.

“Performance of the hotels in the commonwealth during this week was in general much worse than last week,” Professor Vinod Agarwal of Old Dominion University’s Dragas Center for Economic Analysis and Policy said in a statement. “Continuing spikes in COVID-19 cases in the recent weeks have adversely impacted this industry.”

 

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