The Iowa Racing and Gaming Commission recently approved a plan for Pinnacle Entertainment to sell its Ameristar Casino property in Council Bluffs to a real estate investment trust. The deal that will sell most Pinnacle casino real estate to Gaming & Leisure Properties Inc. (GLPI) will provide Pinnacle with more than billion in financing. Gaming Commission Chairman Jeff Lamberti said, “It’ll be interesting to see because REITS have a tendency to want to grow and so they are probably going to be looking to acquire additional properties.”
Lamberti noted the deal is the first of its kind in Iowa so commissioners wanted assurance they still can properly regulate the facility. “We’re very big on the conditions of the properties, and also as conditions allow, additions to the properties. We wanted to ensure that through the licensing that even though the operator is going to now be a tenant as opposed to both owning and operating, that we had enough control that we could say we are not happy with the condition, or that we want you to pursue some additional amenities and that that will all fit under the structure of this, particularly under that master lease that we were talking about. And we’re comfortable that those issues have been addressed in that lease,” Lamberti said.
The new leasing arrangement provides “quite a bit of room” for the casino as a tenant to make improvements for routine maintenance and upkeep without asking the landlord, Lamberti said. Landlord d consent is required for larger projects but cannot be reasonably be withheld, Lamberti said. In addition, the landlord has the right to finance the improvement projects on the property.
Lamberti noted, “We still hold the gambling license which is subject to approval every year. So, when we combine all those elements we feel very comfortable from an operation standpoint, really nothing is going to change.”
