Published on: January 22, 2023, 04:53 am.
Last updated: 22 January 2023, 04:53.
Vornado Realty Trust ( NYSE:VNO ) could be the latest big name to enter the New York casino fray, and it may be evaluating a site near Madison Square Garden and Penn Station for a gaming venue.
The New York Post reported earlier today that Vornado, which is already one of the largest commercial real estate owners in the city, may be evaluating the site currently occupied by Hotel Pennsylvania as a potential site for a hotel-casino. This hotel is slated to be torn down this year as part of a massive redevelopment plan for the Penn Station area.
Vornado’s portfolio is focused on the nation’s key market, New York City, along with prime assets in both Chicago and San Francisco,” according to the real estate investment trust (REIT).
The normally quiet REIT said Post that it is “studying the possibility of applying for a casino license [in the Penn Station area]”, but cautioned that there is no firm agreement in place yet.
Vornado Partner Speculation
As with other contenders in the New York casino fray, Vornado’s gaming partner is not yet known, but Post reports that the REIT could team up with billionaire financier Neil Gary Bluhm.
Bluhm is a partner in Midwest Gaming & Entertainment. He co-founded Illinois-based Rush Street Gaming, which operates a pair of casinos in suburban Chicago as well as Philadelphia and Pittsburgh. With an estimated net worth of $7 billion, the 84-year-old Democratic mega-donor also owns stakes in the NBA’s Chicago Bulls and Major League Baseball’s Chicago White Sox.
Vornado doesn’t have to choose a gaming partner at this point, but some of its rivals already have. For example, SL Green is working with Caesars Entertainment on a Times Square gambling bid, while Related Cos. is teaming up with Wynn Resorts to bring a hotel-casino to another part of Manhattan. New York Mets owner Steve Cohen’s preferred partner for the Queens casino is believed to be Hard Rock International, although this has not been publicly confirmed.
Vornado must act quickly to file a preliminary application with the New York Gaming Facilities Board. These documents must be submitted to the regulatory authorities by February 3.
Vornado financial movements
With New York real estate among the most expensive in the world and state officials pushing for at least $500 million in new gaming venues, future downstate casinos are expected to be more many billions of dollars.
It’s unclear if it’s related to the New York casino effort, but Vornado is making moves to conserve capital. Last week, the REIT announced it had cut its quarterly dividend to 37.5 cents per share.
“The decrease is in recognition of the current state of the economy and capital markets and reflects Vornado’s reduced projected taxable income for 2023, primarily due to higher interest expense,” according to a statement issued by the company.