Bally is ready to close the $200 million Freedom Center deal

Bally’s, which exercised its option to buy the Freedom Center printing plant last month to build its Chicago casino, is expected to close a $200 million deal with owner Nexstar Media Group this month.

After buying the property, Bally’s plans to sell and lease out the 30-acre property in River West to raise funds for a proposed $1.74 billion casino complex, the Rhode Island-based company said during its earnings call for third quarter last week.

“We are close and focused on the sale-leaseback of land in Chicago because we believe it is a core part of the capital structure,” Bally CFO Robert Lavan said on the call.

Dallas-based Nexstar Media Group, the nation’s largest television station owner, purchased the Freedom Center site in 2019 as part of its Purchase of Tribune Media for $4.1 billion is the former broadcast parent of Tribune Publishing. In 2018, Tribune Media received planning permission for a planned mixed-use development on the site, including offices, a hotel and thousands of residential units.

While not mentioning the Freedom Center by name, LeAnn Gliha, Nexstar’s chief financial officer, touted an after-tax windfall from the imminent sale of the Chicago property during Tuesday’s earnings call.

“The expected sale of one of our remaining properties in Chicago is also expected to positively impact our fourth quarter with net cash proceeds of approximately $155 million,” Gliha said. “The transaction is expected to be completed later this month.”

Nexstar spokesman Gary Weightman declined to comment Wednesday.

Bally Chairman Soo Kim confirmed the sale price of $200 million on Wednesday and said the deal should be completed by Thanksgiving.

In May, Bally’s won a heated bid to build a casino in Chicago, which is expected to bring the city $200 million in annual taxes, transform an industrial site into a bustling entertainment destination and force the Chicago Tribune to leave its printing press along St. Chicago River.

The proposed casino complex would include an exhibition hall, a 500-room hotel, a 3,000-seat theater, an outdoor music venue, six restaurants and, for gambling, 3,400 slots and 170 gaming tables, making it the largest in the state.

Bally’s filed in Chicago casino license application with the Illinois State Gaming Board in August with plans to open a temporary facility at Medinah Temple by June 2023. A permanent casino is not expected to open until 2026.

To help finance the Chicago expansion, Bally’s entered into a sale and leaseback agreement with Gaming and Leisure Properties in July for its Bally’s Tiverton Casino and Hotel in Rhode Island and the Hard Rock Hotel and Casino in Biloxi, Mississippi, which will bring the company $635 . millions. That deal is expected to close in January, Lavan said.

Kim told the Tribune that a similar sale and leaseback agreement for the Chicago property would provide another source of financing to develop what would be the casino chain’s largest property.

“This is one of the ways we planned to finance the rest of the construction process,” Kim said.

The Chicago casino deal could end up similar to Bally’s recent foray into Las Vegas, where it owns a casino complex but leases the land underneath it.

In September, the casino land from Gaming and Leisure Properties for an initial term of 50 years at an annual rent of $10.5 million.

Bally’s owns and operates 15 casinos in 10 states. It entered Illinois in June 2021 with the $120 million purchase of Jumer’s Casino and Hotel in Rock Island, which was renamed Bally’s Quad Cities.

While its Chicago casino application goes through the state regulatory process, Bally’s filed an application with the city’s Planning Commission on Sept. 21 to amend the mixed-use planned development previously approved for the site. This is not on the planning commission’s agenda for November 17.

The 41-year-old Freedom Center, which prints the Chicago Tribune, Wall Street Journal, New York Times, Chicago Sun-Times and other newspapers, is slated to be demolished as part of the casino development. But Kim said he’s open to the Tribune printing office remaining on the sprawling River West site with the casino if Bally’s becomes the landlord.

Chicago-based Tribune Publishing has taken advantage of a 10-year lease extension at the Freedom Center, which expires in June 2023. Tribune and Nexstar are in arbitration over the terms of the renewal.

If the printing press closes, there may be an option north of the border. Tribune Publishing’s parent company, hedge fund Alden Global Capital, has acquired the defunct Milwaukee Journal Sentinel in West Milwaukee from Gannett for $26 million.

rchannick@chicagotribune.com