The Aurora City Council Tuesday night passed an ordinance authorizing the sale of $58 million in general obligation bonds to put toward the Hollywood Casino-Aurora resort project.
Aldermen voted 11-1 to support the bond issue, which could be sold yet by the end of February.
The bond issue was anticipated as part of the redevelopment agreement the city approved with Penn Entertainment, Hollywood Casino’s parent company, in October 2022.
Penn intends to build a $360 million casino resort along Farnsworth Avenue and Bilter Road, near Interstate 88. Aurora agreed to pay $50 million as an advance to Penn as part of the deal. The money will be paid back by Penn to the city through property tax payments over a period of 20 to 22 years, depending on the length of the bonds, according to Chris Minick, the city’s chief financial officer.
To facilitate the repayment, the City Council earlier this year approved a tax increment financing district on the casino property. The increment will provide the money to pay back the bond and interest. If the TIF district does not raise enough money – estimated at $5.2 million a year – to make the payments, Penn Entertainment has agreed to make the payments.
The reason the bond issue is for $58 million is so the city will have enough to make the first-year bond payments while the casino project is being built.
Minick has said the city is estimated to have to pay back $94 million over the life of the bond issue, depending on market fluctuations. The city will include an option to call the bonds between eight to 10 years out, paying it off early.
Typically, major bond issues are often reissued during their life when the market could command a lower interest rate.
The city pushed for the deal with Penn Entertainment to ensure the casino would stay in Aurora. To do so, city officials lobbied the General Assembly in Springfield to allow casinos to move off the riverfronts they had been connected to since casino gambling was first approved in Illinois in the early 1990s.
Ald. Michael Saville, 6th Ward, is the only alderman who has been on the City Council for the entire time since the casino first came to town in 1993. He said the seeds for the casino’s move to Farnsworth and Bilter were actually planted as far back as 1996, when the council was again tasked to vote on a casino expansion plan.
In that proposal, the casino proposed taking over the former Aurora Hotel property at Galena Boulevard and Stolp Avenue and the North Island Center property, tearing them down and building a hotel and restaurants there. The casino also would have expanded the riverwalk downtown.
The casino’s plans were an offshoot of a previous downtown redevelopment plan hatched long before the casino came to Aurora, in the 1980s. The Link Development included the Aurora Hotel, Leland Tower, the former Aisle Theater and the former Hoyt Property.
That development fell apart for several reasons, but an offshoot of the plan was that the city ended up owning the former Hoyt Property, the former Aisle Theater and the Aurora Hotel.
The Hoyt Property is now part of the land on which the Waubonsee Community College downtown campus is built, and the Aisle Theater was torn down to build Millennium Park along Stolp Avenue and the Fox River.
A divided council did approve the casino plan, only to come back at their next meeting to reconsider the issue, and vote the plan down by one vote.
With that project squashed, the casino ended up building the pavilion that is its current facility along the river, once the state allowed casinos to do so, without having to have free-floating boats.
But Saville said it planted the seeds of the current project. In 1996, no one could foresee the competition casinos like Hollywood would face – video gambling and more casino licenses.
Saville said it was that increased competition that made the move necessary for Hollywood Casino-Aurora to compete.
“That’s why they were convinced to move to an economic corridor like Interstate 88 and Farnsworth,” he said.
Ald. Carl Franco, 5th Ward, teased Saville, asking him how he voted in 1996. Saville joked that he couldn’t remember how he voted, but he said later he did vote against the casino plan.
The reason he and others were against it was because they wanted the casino to save the historic Aurora Hotel and redo it as part of the new hotel, rather than tear it down.
But it was that far back that things were set in motion to relocate the casino.
“We got to the right place, it just took us a while to get there,” Saville said.
slord@tribpub.com