Caesars Entertainment and VICI Properties Inc. announced Wednesday they have signed an agreement to sell Harrah’s Reno Hotel and Casino to an affiliate of CAI Investments for $50 million.
Proceeds of the transaction will be split 75% to VICI and 25% to Caesars, while annual rent payments under the lease between Caesars and VICI will remain unchanged (Caesars leases Harrah’s from VICI Properties).
“We recognize the long legacy of Harrah’s in Reno, where the brand began 82 years ago and our role in the community,” Tony Rodio, CEO of Caesars Entertainment, said in a Wednesday press release. “We are pleased the buyer is committed to the community and supports the redevelopment of this wonderful asset. We have worked closely with the buyer to provide a reasonable closure plan that allows our great staff in Reno ample time to secure their next jobs, including priority consideration for relevant openings at our other properties in Nevada, including Lake Tahoe and Las Vegas.”
The transaction is subject to the closing of the $17.3 billion Eldorado/Caesars merger — likely to occur by the end of the first quarter — which was announced last summer, in addition to regulatory approvals and other customary closing conditions.
Per the agreement, Caesars will continue to operate the property for the first half of 2020 by way of a short-term lease with Las Vegas-based developer CAI Investments.
Caesars will then deliver the property to the buyer “to be redeveloped into a non-gaming hotel and mixed-use development,” according to the press release.
According to media reports, CAI plans to transform the property inti the new Reno City Center — complete with market-rate apartments, new office space and retail offerings, including restaurants and a grocery store.
“Being originally from the Reno/Sparks community, it is with great pride that we are investing in the Reno area by redeveloping this property,” Christopher Beavor, CEO of CAI Investments, said in a statement.
CAI is working with Gryphon Private Wealth Management (GPWM) as capital partners for the project.
“The agreement allows for Caesars to retain its guest data and places no restrictions on Caesars’ marketing activities,” according to the announcement. “Reno will continue to be part of the Caesars Rewards network during the term of the short-term lease...”
Presuming the transaction goes through, the sale of Harrah’s marks the second major investment into Reno by CAI Investments in the past few months; the company also is planning a high-rise, high-end boutique hotel in downtown overlooking the Truckee River on Court Street.
That project, should it clear all necessary hurdles, also is planned to be non-gaming.