SL Green Realty Corp., one of Manhattan’s largest commercial landlords, is teaming up with Caesars Entertainment, the largest North American gaming operator, to seek a license for a casino in a redeveloped 1515 Broadway in Times Square.
The two companies are rolling the dice and vying for one of three gaming licenses approved for the New York City area earlier this year by the New York State Legislature. The odds may not be in their favor, however, as they face competition from other bidders and opposition from the Broadway League, an influential trade association representing theater owners and producers.
Details on their plans to redevelop the 54-story mixed-use tower between 44th and 45th streets in the heart of Times Square and the theater district were sparse in their announcement. When asked if the proposed redevelopment would impact any of the office space in the 1.9 million-square-foot Class A trophy tower, a spokesperson declined to offer additional information.
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The New York Times, which first reported the proposal yesterday morning, wrote Caesars Palace Times Square would be designed to keep a theater for “The Lion King,” the Broadway show that has been located in the Minskoff Theatre building since 2006. The design would also include a hotel, wellness center and restaurants on top of the theater, according to the newspaper.
The announcement from the partnership said the development would bring Caesars Entertainment’s globally recognized excellence in entertainment, food, beverage and gaming to New York City to deliver a best-in-class-experience that would be authentic and complementary to the Times Square entertainment district.
In making their case for the gaming license, SL Green and Caesars said the development would be a major economic boon to New York City and all Times Square stakeholders. They are proposing significant security and traffic improvements as part of their plan and have enlisted former New York City Police Commissioner William Bratton’s help in developing their safety initiatives. Bratton said in prepared remarks SL Green and Caesars’ proposal for Times Square goes beyond routine, in-house security and would invest millions in a new public-private safety initiative. The Times noted the safety plan could include more than 50 artificial intelligence camera systems throughout Times Square for monitoring the huge crowds who move through the area daily.
Competing bidders
Marc Holliday, SL Green CEO, said in a prepared statement a casino in Times Square is in keeping with existing entertainment uses in the area. He stated that because they are proposing a renovation rather than new construction, the partners would be able to open much quicker than other facilities should they get the gaming license.
SL Green and Caesars are betting that may be a deciding factor in their favor. But they do face stiff competition and even though there are three gaming licenses in the offing, most say the two “racinos” in the region have the best chances of getting two of the licenses. They are horse racetracks that have video slot machines and are located at Genting Group’s Resorts World New York City in Queens and MGM Resorts International’s Empire City Casino in nearby Yonkers, N.Y.
Related Cos., which just opened the $3.8 billion 50 Hudson Yards office tower on Manhattan’s Far West Side this week, announced a plan with Wynn Resorts last month to build a casino resort on an undeveloped section of the massive Hudson Yards development. The Commercial Observer reported SL Green was initially planning to partner with Hard Rock Cafe but Hard Rock instead is putting forth its own casino proposal near Citi Field in Queens. Other New York City landlords and developers considering casino options include Vornado Realty Trust and L&L Holding, according to the Observer.
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While SL Green and Caesars lined up several supporters for its official announcement including Actors’ Equity; Jeffrey Bank, president & CEO of the Alicart Restaurant Group; Geoff Ballotti, president & CEO of Wyndham Hotel & Resorts; and Michael Prohaska, business manager of Laborers’ Local 79, the Broadway League has come out against the Times Square casino proposal. The Broadway League said in a prepared statement the addition of a casino will overwhelm the already densely congested area and jeopardize the entire neighborhood whose existence is dependent on Broadway as a key driver of tourism.
The statement from Actors’ Equity disagreed with that premise, however, calling the proposal for the Times Square casino a gamechanger that would boost security and safety for all who work in or visit the area.
Building history
SL Green has had ownership interests in 1515 Broadway since 2002, initially paying SITQ $483.5 million for a 55 percent stake. In April 2011, SL Green acquired SITQ’s entire interest in the trophy tower and took over full ownership. At that time, the transaction valued the consolidated interests at $1.21 billion. A $40 million renovation and strategic repositioning of the property had been completed and included a total lobby redesign.
In November 2017, Allianz Real Estate acquired a 43 percent stake in the building. That transaction valued the building at $1.95 billion.
