Penn National Gaming, the nationwide financial interest behind Hollywood Casino, appears to be pulling the plug on operating its Jamul location, which opened amid controversy only 16 months ago after a years-long battle with the local community.
Excerpts below from Penn’s February 27, 2018, filing with the Securities and Exchange Commission, seem to show the company transitioning management to the Jamul Indian Village tribe. (“The Company” referenced is Penn.)
“The Company, San Diego Gaming Ventures, LLC, a subsidiary of the Company (“SDGV”), the Jamul Indian Village of California, a federally recognized Indian tribe (the “Jamul Tribe”), and Jamul Indian Village Development Corporation (“JIVDC”), a body corporate and politic existing as an instrumentality of the Jamul Tribe, have mutually agreed that the Company and SDGV, as applicable, will no longer manage the Hollywood Casino Jamul-San Diego, a gaming and entertainment facility owned by JIVDC (the “Casino”), and will cease to provide branding and development services. The termination of the management and other services provided by the Company and SDGV, as applicable, will be effective on May 28, 2018. The parties anticipate an approximately ninety-day period for an orderly transition of the management of the Casino to JIVDC, beginning today.
“SDGV previously made a $98 million loan to JIVDC for the construction, development, equipment and operations of the Casino and, in addition, provided additional delayed draw term loans and a limited completion guarantee for certain post-opening construction costs related to roadway improvements. As of December 31, 2017, these future funding commitments totaled approximately $29 million. On February 8, 2018, the Company issued a press release summarizing its results for the fourth quarter and year ended December 31, 2017. These results included an impairment charge of $48.5 million on the Company’s loan and unfunded loan commitments to JIVDC. Based on the pending termination of various agreements between the parties, the Company recorded additional charges of $29.4 million on the loan and unfunded loan commitments to JIVDC for the fourth quarter and year-ended December 31, 2017.
“SDGV’s loans and any future funding obligations are subordinated to the substantial senior debt on the property. SDGV’s loans to JIVDC remain outstanding; however, SDGV’s only material recourse for collection of these loans is from positive cash flow, if any, from the Casino operations or from the sale of these loans to a third party. The Company may realize little or no value for its loan, which could result in additional charges of up to $27.9 million (which represents the Company’s remaining loan and loan commitments, net of reserves, at December 31, 2017). Additionally, the Company may incur unexpected costs related to the termination and transition of its management contract with the Jamul Tribe.”
Comments 4
Wow , Now who’s gonna run the store ? What happens to the employees? Supervisors Ron Roberts and Bill Horn allowed the largest 200,000 sq ft building to be built on the most dangerous state route in California history with no CEQA review and traded a San Diego county winning lawsuit against the developer and Caltrans for a worthless MOU with a tribe that laughed their heads off while signing it.
We residents have been seeing the footprints of this for months now. Poor attendance. Constant employee turnover at all levels (service jobs especially— no people = no tips). Terrible reviews on YELP. Compaints about food, customer service, tight machines, and a dead (graveyard?) atmosphere.
The complicit parties include CalTrans, state and local officials, Alcohol Beverage and Control Board. They ALL enabled this boondoggle of a project. For years and years the community tried to tell them. We tried to tell Supervisor Horn when he sanctimoniously lectured us that “we’d love what the casino would do for our community.” This is a project that should never have been. Built on the blood and graves of the original elders— who were then “disenfranchised” from their rightful home. The current leadership of the JIV should be hanging their heads in shame.
RIP Karen Toggery, Adolph Thing, Jane Dumas, and all the original elders who became the most vulnerable of victims. Shame on those who defiled you.
What will it be after it’s closed down? Will it be a mosque? Will it be a mega church? What possible use could a building of that size in rural San Diego County be used for?
I’ve always hoped it would become a Kaiser Hospital. We need a hospital that’s closer to our southern and eastern neighbors, as well as for ourselves. Either that or a community center or college.
We will be cursed with traffic no matter what happens.