Waukegan’s planned casino development clears another hurdle; ‘This is a pretty significant real estate transaction’
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With Full House Resorts American Place temporary casino scheduled to open early this year, Waukegan is getting a better idea of some of the benefits which will accrue to the city as each phase of the development evolves over the next five years.
Once the 75,000-square-foot temporary casino opens with 50 table games, 1,000 slot machines, a sportsbook where people can wager on their favorite team and a variety of dining opportunities, work will begin on the permanent 325,000-square-foot casino and resort with completion three years later.
Along with drawing people to the Waukegan’s newest entertainment venue, the city will start receiving revenue. There will be rent from a ground lease, a head tax on everyone entering the casino and property taxes.
The City Council unanimously approved its ground lease and development agreement with Full House Tuesday at City Hall, finalizing all agreements between the two parties required before the Illinois Gaming Board gives its permission to open the casino.
Before the council met, its Community Development Committee unanimously recommended approval.
The panel also continued a hearing to make the wall in front of Waukegan Community Unit School District 60′s Lincoln Center building a historic landmark until its Feb. 6 meeting.
Stewart Weiss, the city’s corporation counsel, said during the committee meeting finalizing all agreements with Full House is one of the necessary requirements before the gaming board allows the temporary casino to open.
“Through January, Full House will be undergoing final inspections and licensing with the IGB,” Weiss said, referring to the gaming board. “The state gambling license is the last thing. We are approving the final documents to allow them to commence operations.”
Weiss said the entire development is a complex, three-phase transaction unlike others the city handles. The temporary facility is the first phase. The permanent casino with a 20-room boutique suite hotel, an entertainment venue and more dining options is next.
After American Place opens within three years of the temporary casino’s starting date, Weiss said the next phase, with a 150-room three-star hotel, is scheduled to open within two more years.
“This is a pretty significant real estate transaction,” Weiss said. “It could take 20 years to build out. Most development agreements are for a few years. Right now, we think it could take seven or eight years for the planned phases, but this could become a full entertainment complex.”
Weiss said if Full House elects not to build the large hotel, the development agreement requires it to make a $50 million investment in an “alternate amenity.” That investment is also a requirement of the gaming board.
“They think (the hotel) is going to generate the most gaming revenue and the most business,” Weiss said. “If they don’t believe that is going to generate the most revenue, they will invest it in something else in the casino.”
When the temporary casino opens, Weiss said Full House will pay the city a $150,000 impact fee to cover additional municipal expenses like police, fire protection and public works efforts.
The ground lease will provide the city the greater of $3 million a year, or 2.5% of the operation’s adjusted gross income. Weiss said Full House has an option to purchase the city-owned land for $30 million, but must pay rent for the first three years even if it sells the land.
Of the entire 40-acre site, Weiss said approximately 30 acres is owned by the city of Waukegan and the rest by Full House.
