Empire City Casino at Yonkers Exploring Partnership or Sale

John Jordan | November 2017

Empire City at Yonkers Raceway

YONKERS—Empire City at Yonkers Raceway has retained J.P. Morgan Securities LLC to identify a strategic partner or perhaps explore a possible sale as it looks transform the highly successful racing and casino venue into a global gaming and entertainment destination.

In its announcement released on Nov. 15, Empire City Casino officials said that JP Morgan will serve as the financial advisor in the exploration of alternatives that could include the addition of “strategic partnerships” as well as a sale of the nearly 100-acre property located next to the New York State Thruway in Yonkers. A spokesperson for Empire City told Real Estate In-Depth that in addition to perhaps identifying a strategic partner, “all options are on the table for discussion, including a possible sale of the iconic property.”

Empire City has previously released a master plan for future development that company officials stated would be valued at more than $1 billion.

The facility has more than 5,300 electronic slot machines and in fiscal year 2015-2016 posted net revenues of more than $571 million, according to figures supplied by the New York State Lottery.

The Rooney family has owned Empire City Casino and Yonkers Raceway for more than 45 years. In October 2013 Empire City completed a $50-million expansion of its gaming operations that included a mezzanine area with a bowling lounge, restaurant and a restaurant on the ground level and a grand entrance to the facility leading to gaming machines there. The expansion has brought the size of the gaming space at the complex to approximately 300,000 square feet.

“Since 1899, Empire City has served its community and customers through its exceptional commitment to the creation of an unparalleled gaming and racing experience,” said Timothy J. Rooney, president and CEO of Empire City. “We believe our prime location and outstanding accessibility will serve as a unique platform to create one of the world’s leading gaming, hospitality, and entertainment venues. We are excited to explore opportunities with potential partners who can build on the strong foundation we have established.”

The expansion study comes a few months from the planned opening of the more than $1.2-billion Resorts Worlds Catskills resort casino in Sullivan County. The full-service casino in the Town of Thompson will feature a 100,000-square-foot casino, including 130 table games, a poker room, and 2,150 of your favorite slot machines; a 332 all-suite hotel, 10 bar and restaurant options providing both casual and upscale experiences, a spa and salon, two pools and two fitness centers, conference, meeting rooms, and banquet facilities, live entertainment at a more than 2,000-seat theater, two casino bars, entertainment restaurant and Italian Steakhouse, valet, surface, and garage parking.

The Resorts World Casino was approved by the New York State Gaming Commission as part of the Upstate New York Gaming and Economic Development Act of 2013 that allowed for a maximum of four casinos upstate and banned the siting of any full-service casinos in the New York metro region, including Westchester County.

The Act mandated that no additional casinos beyond the four upstate casinos could be sited anywhere until seven years after issuance of the first license or by March 2023.

For the remaining three possible casinos permitted under the state constitution a siting law would need to be passed and enacted to spell out the criteria and process for the additional casinos, according to a spokesman for the New York State Gaming Commission. That law, if and when it is passed, could establish that the casinos be sited in the downstate/NYC region, and/or as additional facilities Upstate.

Casino operators in the New York metro region expect the next round of casino approvals to include at least one in the New York metro region. Back in 2015, Empire City at Yonkers officials unveiled a master plan for its future expansion valued at more than $1 billion.

When asked how this study would impact those expansion plans, Taryn Duffy, director of public affairs for Empire City Casino said, “While the previously designed master plan included components that will likely be a part of any future development (a hotel for example), any future development plans would be designed and completed in partnership with a strategic partner, if one is found.”

When asked if the Rooney family might sell the property, Duffy responded, “Unsolicited interest has been expressed by several gaming companies. This process is being undertaken in an attempt to cast a wider net to determine what strategic partnership opportunities are available. This exploration may result in no changes to the property at all. No criteria or terms have been pre-determined and all options are on the table for discussion.”

In an interview with Real Estate In-Depth in early 2015, Timothy J. Rooney, Jr. chief counsel, Empire City at Yonkers Raceway, detailed some of the general concepts of its master plan envisioned along Central Avenue and Yonkers Avenue that would possibly include:

  • An approximately 350,000-square-foot hotel that would include gaming operations if a license is secured on the first floor of the hotel.
  • Entertainment-oriented retail space of approximately 500,000 square feet.
  • An entertainment, sports facility or arena (size to be determined).

He said the future development there would likely involve “hundreds of thousands of square feet” of new construction. He stressed that the raceway would be part of the master plan and would remain in operation.

He estimated the potential development at the property could exceed $1 billion, he said.

“We feel that the scope of the project has to be greater than that ($1 billion) for us to have a legitimate bid at securing a license,” Rooney told the newspaper back in 2015.

 

John Jordan
Editor, Real Estate In-Depth