Posted on: June 20, 2022, 10:57h.
Last updated on: June 20, 2022, 10:57h.
Churchill Downs Incorporated closed on the sale of nearly 116 acres of land it owned in Florida on Friday, and the company said the proceeds from the transaction will go to cover acquisitions it announced earlier this year.
The Louisville-based gaming company first announced it would sell the acreage that’s adjacent to its Calder Casino to Link Logistics for $291 million in November. That land had served as a thoroughbred racetrack for nearly 50 years before it was shut down in late 2020.
Last year, Churchill Downs said it planned to use the proceeds to acquire replacement property as part of a 1031 exchange. Under federal tax laws, companies can avoid paying capital gains taxes if they use the proceeds from the sale of the property to acquire or make investments in another property.
In February, Churchill Downs announced it would acquire most of Peninsula Pacific Entertainment’s (P2E) gaming portfolio for $2.49 billion. That deal should close by the end of this year.
On Friday, Churchill Downs said it would use “certain proceeds of the sale” toward the P2E acquisition as well as use it toward other “replacement properties” to qualify for a 1031 transaction.
Churchill’s Deal Making Extends Past Calder, P2E
With the sale to Link Logistics now closed, Churchill Downs still owns about 54 acres at the Calder Casino, located in Miami Gardens. The company said it may consider selling another 15 to 20 acres of that parcel that are suitable for retail businesses.
The Calder and P2E transactions are just two of several moves Churchill Downs has announced in the past year. The most notable was the sale of Arlington International Racecourse last September. The Chicago Bears have agreed to buy the 326-acre racetrack in the Windy City suburb of Arlington Heights for $197.2 million, and the team plans to use the site for a new stadium. That deal may not close however until early next year.
Churchill Downs also has announced several upgrades and planned renovations to its namesake track in Louisville as it plans for the 150th Kentucky Derby in less than two years. Chief among them is a $200 planned expansion of the track paddock area that’s set to open for the milestone Derby. Construction on that work will start after the spring meet ends next month.
The company also opened a new $44.5 million club section this year. In addition, a nearly $90 million premium seat project along the track’s first turn will open next year.
Also in Louisville, Churchill Downs is expanding Derby City Gaming, its historical horse racing (HHR) parlor. The $76 million project will add 135,000 square feet to the facility located at the old Louisville Downs harness track. It also will increase the gaming floor by 200 machines by later this year. The project also includes a 123-room hotel that will open next spring.
New Projects Also in Churchill’s Pipeline
Churchill Downs isn’t just buying and selling. They’re also expanding organically.
The company plans to build another HHR parlor, this one in downtown Louisville, at a cost of $80 million. Churchill officials expect that site to compete for tourists who currently venture to play at the Caesars Southern Indiana casino in Elizabeth, Ind.
And on Tuesday, company leaders will be in Indiana to celebrate the groundbreaking for the Queen of Terre Haute Casino in the west central Indiana city. The company won the license for the state’s 13th commercial casino last November.
Construction on the $260 million project is expected to take two years. When finished, the casino will hold up to 1,000 slot machines and 50 table games. Other amenities include a 125-room hotel.