43
The port authority will provide the racino with $60 million in capital lease financing
and David Skolnick
austintown
The Western Reserve Port Authority will provide $60 million, through capital-lease financing, of the $125 million being spent by Penn National Gaming to build a thoroughbred horse racetrack and video-slot machine casino here.
A groundbreaking ceremony is planned for 1 p.m. Thursday at the site of the track.
Penn National will use the $60 million in financing provided by the port authority to construct the fixed assets at Hollywood at Mahoning Valley Race Course. That includes the track, stables, parking lots and buildings, said Scott Lynn, WRPA board president.
Penn will invest the $65 million in the project that will feature up to 1,500 slot machines.
This project “will provide a capital-lease financing structure for Penn National, it showcases the port authority’s ability to offer unique financing options that will spur economic growth in the region, and it will create thousands of direct and indirect jobs,” Lynn said in a prepared statement.
“The capital-leasing program is an appealing option for companies because it provides them with tremendous flexibility,” said Ross Ann DeLeon, WRPA’s executive director, in that same prepared statement. “That’s why it’s been used in communities across the state to fund a wide variety of projects. Our work with Penn National clearly demonstrates that the WRPA has the capacity and ability to provide the type of innovative financing programs that will, when combined with the Valley’s other assets, propel development now and in the years ahead.”
The statement, provided late Wednesday to The Vindicator, didn’t provide details or conditions of the capital-lease program. DeLeon couldn’t be reached for further comment.
Because port authorities in Ohio are tax-exempt, they can loan money to projects with a 100-percent exemption from state sales tax.
“Companies can improve the appearance of their balance sheet because financing will not be reflected as a debt of the company, but simply as an operating lease,” according to the Youngstown/Warren Regional Chamber’s website about WRPA lease financing. “This helps companies keep credit lines open for working capital to create and retain jobs or buy equipment.”
Meanwhile, township Trustee Jim Davis is especially excited about the groundbreaking.
“It’s a huge day for Austintown,” Davis said. “It’s like the icing on the cake.”
Several local and state officials — including Penn Vice President Eric Shippers and President Tim Wilmott — along with an expected 100 to 150 community members are expected to attend the event that will mark the beginning of the long-awaited project.
The project was delayed after state racing officials denied an OK on a relocation permit from Beulah Park in Grove City in March.
Earlier this month, however, the Ohio Racing Commission gave the township and local officials permission to transfer the racing license for the Hollywood at Mahoning Valley Race Course.
In addition to the $125 million investment in building the facility on a 1 95-acre parcel, Penn has agreed to pay $75 million relocation fee and $50 million license fee to the state.
Davis said he’s more ecstatic about what it will do for the local economy.
“It’s not just an opportunity to gamble,” Davis said. “It’s an opportunity for jobs.”
Bob Tenenbaum, Penn National Gaming spokesman, said the project will create 1,000 direct and indirect jobs from food, beverage and maintenance to security and housekeeping.
Site preparation is now being completed, Tenenbaum, said.
“It’s an opportunity for people to understand it’s real, and it’s going to happen,” Tenenbaum said. “The work put in and support given was worthwhile, and this project will start to rise.”
Permits are being issued, said Darren Crivelli, Austintown zoning inspector.
“We’re glad to see the project moving along,” Crivelli said.
Crivelli’s goal now is ensuring everything needed for the project, on his end, such as parking and other additional public improvements, is taken care of.
“Hopefully all the pieces fall into place,” Crivelli said. “We’re looking forward to it.”
The racino was scheduled to open spring quarter 2014, but Tenenbaum said that due to the permit relocation delay, it could be some time mid-next year.