Times Square Casino Hopes Not Entirely Dead, Says SL Green CEO

• Times Square casino plan was first in New York rejected by a CAC
• SL Green CEO says it’s not “completely dead”

Caesars Palace Times Square was the first of the New York City casino proposals to be rejected by a community advisory committee (CAC), signaling appetite for a gaming venue in Manhattan may be limited, but it’s possible the plan isn’t entirely six feet under.

Marc Holiday, chairman and chief executive officer of SL Green (NYSE: SLG), said on that company’s third-quarter earnings conference call earlier today that the plan to bring a casino hotel to 1515 Broadway isn’t entirely in the grave.

No, I don’t think, by any means, it’s to use your term completely dead,” said Green in response to a question from Bank of Montreal analyst John Kim. “I think the whole process and the outcome is still unknown. How many bidders will there be? How many licenses will be awarded — and whether, if any are held back, there’ll be another shot for casinos in Manhattan or otherwise to come into play.”

SL Green owns the building at 1515 Broadway and is the real estate partner of Caesars Entertainment (NASDAQ: CZR) and Jay-Z’s Roc Nation. The consortium proposed a $5.4 billion gaming venue in the heart of Manhattan aimed at creating jobs and rejuvenating the theater district.

Hope Burns Eternal for Times Square Casino

With Tuesday’s surprise news that MGM Resorts International (NYSE: MGM) is abandoning its quest to land a permit to convert Empire City Casino in Yonkers to a Las Vegas-style gaming venue, the downstate casino competition has been pared to three contenders.

Green believes Manhattan should be home to at least one casino, though many locals beg to differ, adding that Times Square was the ideal location for a new gaming venue.

“There should be at least one casino in Manhattan. I think that’s obvious and Times Square was the exact right location, but the process was designed to make that impossible, at least for the time being,” said the SL Green CEO on the conference call.

SL Green Evaluation All Options

Green acknowledged the REIT is “keeping alive a hope for the future of a possible casino if a license remains available”, but made clear the company is open to all options for 1515 Broadway, gaming venue or otherwise.

It’s prime real estate and the primary tenant is CBS, which is being financially bolstered via an acquisition by Skydance, and Green noted the building could seamlessly convert to a hotel/leisure destination if that’s in the cards down the road.

“The beautiful thing is right now we’ve got so much flexibility because our debt per square foot is, I think, like $3.75 a foot or thereabouts. So we have complete financial flexibility,” he told analysts. “The buildings net leased through, I think, the middle of 2031 and the cash flow is significant from the property. And that’s a good scenario for us to sort of look at all options, commence multiple negotiations and try and end up in the best place.”