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Tropicana Bhd : announces $50 million onshore casino

11/27/2015 | 08:22am US/Eastern

Nov. 27--Tropicana plans to invest $50 million to move its casino from the banks of the Ohio River to land.

The company announced on Tuesday that construction would start on the large-scale development sometime in the spring and could be completed by the end of 2017.

The announcement comes about six months after the state legalized land-based gaming -- a contentious move that Gov. Mike Pence allowed to become law without his signature.

Tropicana Entertainment's President and Chief Executive Officer Tony Rodio said the company plans to build a 75,000 square-foot, single-level casino between its Tropicana and Le Merigot hotels on Riverside Drive.

"The casino will be very spacious, with high ceilings, a restaurant and bar, entertainment lounge and other nongaming amenities," Rodio said.

Beyond projected increased tax revenues from the development, the city is poised to have immediate short-term gains from under a proposed lease agreement with Tropicana.

The casino leases 10 acres of Riverfront land from the city. Tropicana is offering a $25 million advance on rent -- $12.5 million by the end of this year and $12.5 million when the project is finished. In return, the city will give Tropicana a $20 million rent credit when the land-based casino opens. The contract would also add lease renewal options through 2055.

That extra $25 million over the next two years could provide funding for several projects Winnecke sought, but saw cut from his budget proposals, including a proposed land bank to purchase and eliminate blighted properties; Roberts Park; and public safety requests.

"We'll have a little bit of time to see how to best spend this money," he said. "We'll make sure to put some into the Rainy Day Fund, as well, but those will be discussions we have in the near future."

Before the ceremonial shovels hit the ground in early 2016, the Evansville Redevelopment Commission and the Indiana Gaming Commission have to approve the new lease. The gaming commission will consider the lease amendment in February.

Other than the rent credits, the city isn't offering any other development incentives, such as tax abatements. However, city officials will have to approve vacating Third Avenue between Riverside Drive and Second Street for the onshore construction.

Tropicana also agreed to provide $1 million toward docking the LST 325 where the riverboat casino currently sits, should the LST decide to relocate from Marina Pointe.

During contract negotiations last year, Winnecke promised the Tropicana boat site to the LST board if the casino moved to land -- an offer cited as crucial to the new LST lease agreement.

While the prominent Riverfront location enticed the board to sign a new lease with the city, the nine-person board has not agreed whether to move the ship downriver from its current dock at Inland Marina.

The LST 325 board will meet in January to discuss the potential move.

What will happen to the distinctive riverboat docked at the Riverfront?

"In all likelihood it will probably be sold for salvage," Rodio said.

Riverboat casinos, he said, are a relic of the past.

Attendance at the casino has dropped overall in the last decade. In October 2005, the casino reported 128,000 visitors. In October 2015, it was 92,000.

But Rodio is hopeful the new onshore gambling facility will boost revenues and attendance.

One of Tropicana's principle competitors, Harrah's Metropolis in Southern Illinois, reported last month 18 percent gambling revenue growth and a 14 percent visitation increase from last year after moving from a riverboat casino to a land-based operation in November 2014.

Rodio said another Tropicana casino in Mississippi saw similar growth when it moved from water to land.

Details are still being worked out, but the facility will include entertainment offerings along with gambling.

"It's incumbent on us to make this more than just a gaming experience," Rodio said.

Tropicana is taking this approach as a way to address generational shifts and changing preferences within the gambling industry, Rodio said. Traditional casino gambling, he said, is based on random chance.

In contrast, Rodio said, younger people tend to be more interested in things such as fantasy sports, skill-based gambling and games that include a social component.

It's premature to say what type of entertainment components will be included at Tropicana Evansville's new casino, Rodio said.

"I'd hate to start alluding to possibilities until plans are finalized."

Staff writer Susan Orr contributed to this report


(c)2015 the Evansville Courier & Press (Evansville, Ind.)

Visit the Evansville Courier & Press (Evansville, Ind.) at www.courierpress.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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