Bally’s Corporation says it remains on track to build a sprawling casino and resort complex at Ferry Point Park in the Bronx, despite recently warning investors of potential financial problems.
The debt-laden casino entertainment company announced last week it had received a financial lifeline – a $560 million loan for pre-construction costs related to the multibillion-dollar project. The complex is planned for a former golf course in Throggs Neck, a neighborhood on a peninsula in the southeast Bronx.
“This important financing allows us to progress the pre-construction planning process so that we are ready to complete the remainder of the capital raise and remain on schedule,” said Soo Kim, the chairman of Bally’s board and the majority stakeholder, in a statement.
The statement comes after the company itself raised questions about its future.
Earlier this summer, Bally’s paused construction of its Chicago casino because of a dispute with the city over gambling plans. It also issued a warning to investors about its lack of liquidity. Earlier this month, it announced the resignation of its chief financial officer.
The loan from WhiteHawk Capital Partners, a private credit lender, came as some analysts also raised questions about the viability of the Bally’s Bronx project, which is billed as the biggest private development in borough history. It’s anticipated to include 3 million square feet of gaming facilities, a 500-room hotel, a 2,000-person event center, and an 18-hole golf course.
But spokespeople from Bally’s said the company remains confident it can deliver on its promises.
“The additional liquidity provides us greater flexibility for other capital opportunities,” Kim said in a statement.
Bally’s is one of three downstate casinos that were awarded state licenses in December as full-fledged casinos, after a monthslong review process. Tens of thousands of jobs hinge on the massive construction and development bets paying off.
None of the three projects has gone entirely as expected.
Construction of the Hard Rock Hotel & Casino Metropolitan Park near Citi Field began months behind the company’s own schedule, as the Queens Daily Eagle reported. A spokesperson for the company said construction is on track and scheduled to be completed by 2030.
Resort Worlds, near the Queens aqueduct, is already in operation. But it's in the midst of a battle over how its state taxes will be calculated, with billions of dollars in private investment resting on how the dispute is resolved. A higher tax rate might hinder the $5.5 billion expansion that is in the works, according to a letter from 10 elected officials who pleaded the casino's case to the New York State Gaming Commission.
A spokesperson for Resort Worlds said conversations with the state are ongoing.
The New York State Gaming Commission is “monitoring the development of all three projects,” Jacquie Slater, the commission's communications director, said in a statement.
She added that independent monitors will update the commission on each project’s progress.
“This includes ensuring that all three fulfill their construction and operational requirements and honor the many community commitments each made,” Slater said.
At least one financial analyst said despite initial challenges, New York City’s three casinos are likely to thrive.
New York is a “massive” and “healthy” market for casinos, said Barry Jonas, a senior gaming equity analyst for Truist Securities.
When they do ramp up, Jonas said, “I think these casinos will bode well.”
Doubts around Bally’s
Ferry Point, where the Bronx casino is expected to be built, was home to a city-owned golf course leased by the Trump Organization. Bally’s bought out the Trump lease and gained control of the property for upward of $150 million.
Obtaining land rights and building the casino is just half the battle of getting the casino off the ground. Bally’s spokesperson Joe Jaffoni said in a statement that the company has already made a substantial investment in the project. Additionally, it paid $500 million to New York state for its operating license.
In its proposal, the company promises community investments in the Bronx’ Throggs Neck neighborhood, including transit and traffic improvements, better access to Ferry Point Park, and funding to schools, public housing and mental health and substance abuse programs.
In October, the local community board’s parks committee will hear more about expected improvements to Ferry Point Park, according to Joseph Russo, the community board’s chair.
“As a board, we look forward to greater clarity from Bally’s and our elected officials” regarding “promised community reinvestment goals,” Russo said in a statement.
Still, Bally’s cash flow remains a concern. Jonas, the analyst, called Bally’s “extremely leveraged”: the company’s debt is nine times its cash flow.
Bally’s stocks tanked this summer after the company flagged “substantial doubt about the Company’s ability to continue as a going concern” to investors in their quarterly financial report, in light of unresolved funding issues. That language is often used when a company faces the prospect it might fail to meet its financial obligations within one year.
“ A normal company with a liquid stock would do anything and everything to avoid this,” Jonas said of the investor warning. “Whereas Bally’s is certainly not a normal company.”
Kim, the board chair, Jonas said, is “comfortable playing in worlds of high leverage.”
With the approval of the gaming commission, another company could theoretically take over the project should Bally's falter. But the company says it expects to make significant profits once the casino is up and running.
The New York State Gaming Commission has been “engaged with Bally’s, which has committed to the Commission that its financing and investment remains materially unchanged,” Slater said in the statement.
Because only three downstate casinos are licensed to operate, Jonas said he expects to see a casino at Ferry Point in the Bronx, regardless of who owns it.
“One way or the other, I would expect you'll see this project built, and you know, I think it has just as good a shot as any that it will succeed,” Jonas said.
Lisa Sorin, the president of the Bronx Chamber of Commerce and the chair of the Bally’s Bronx community advisory committee, said that she’s concerned about the community investments that were promised to the Bronx – not the balance sheet of any particular company.
“Financing is a question for Bally's and the market to work out,” Sorin said.
She added, “the community benefits negotiated are extensive and sorely needed. What matters most is that Bronx residents actually see that investment, and that matters as much as who builds it."
Here’s where the two other downstate casino projects stand:
Hard Rock Hotel & Casino Metropolitan Park, near Citi Field
Karl Rickett, a Metropolitan Park spokesperson, said the project is on target and is expected to be completed by 2030.
“Construction at Metropolitan Park is well underway,”’ Rickett said in a statement. “The project's design reflects years of community engagement and input from our neighbors, developed with an all-New-York design team.”
The project, which is the most costly of the three downstate casinos, with a price point of over $8 billion, is expected to generate 23,000 union jobs, 25 acres of green space, infrastructure improvements, and a revamped 7-line train station, Rickett said.
Construction, which had an already slow start, still has a long way to go – crews are currently focused on parking and the main building, according to Rickett.
Donovan Richards, the Queens borough president, said that contracts with minority and women owned businesses to complete the development are ahead of the pre-determined benchmarks.
Slater, from the New York State Gaming Commission, said in a statement that it “has no concerns about its ability to complete the project.”
Resorts World New York City, at the Queens aqueduct
At Resorts World, an existing casino at aqueduct racetrack, the picture is a little more complicated.
In April, Resorts World launched its full fledged casino, unveiling a “reimagined third floor” with more than 240 table games like blackjack, craps, and roulette, in addition to thousands of slot machines.
But that is only the beginning of what Resorts World has envisioned: the company is working on a $5.5 billion expansion across roughly 70 acres, which the company says will be the largest resort in the country.
The company and the state are at odds over how the casino’s taxes should be calculated, and whether profits from horse racing should be included.
According to a statement from Stefan Friedman, a spokesperson for Resorts World New York City, the company is currently “having constructive conversations with the state and are hopeful about continuing to build on our successful partnership.”
The letter from lawmakers to the state gaming commission was more pointed: “The uncertainty now threatens not simply one company, but billions of dollars in private investment, thousands of jobs, local businesses, and the communities we represent.”
Slater in the statement acknowledged the “ongoing disagreement” over the company’s tax obligation. She added that the dispute “has nothing to do with the success of the new casino,” which she said generated nearly $590 million in gross revenue in the first five months of operation.
Slater noted that the casino recently broke ground on the expansion’s next phase.
Richards said the state has “googly eyes” now because Resorts World is “rolling in dough.” But he was optimistic about a fair agreement being reached.
“This is the rebirth of Queens,” Richards said of both casinos.
This story was updated with comment from the New York State Gaming Commission and Metropolitan Park.
