How Does Everett Benefit From This, If At All?
By Josh Resnek
Wynn Resorts has sold the 33-acre parcel of land and the casino and hotel properties, but not including 13 – acres of land it owns across the street from the casino for $1.7 billion to a San Diego company, Realty Income.
As part of the transaction, Encore agreed to pay a triple net $100 million a year rent and leased back the properties it sold to the real estate company.
The company is expecting to sign a 30 year lease with the possibility of one 30 year extension.
Realty Income will have a 6 year option to buy the 13 acres from Wynn Resorts.
The sale and leaseback by Wynn Resorts was announced last week.
The transaction is subject to customary closing conditions, including required regulatory approvals, and is expected to be completed during the fourth quarter of 2022.
“Encore Boston Harbor is the premier gaming resort on the East Coast and the valuation we achieved in this sale reflects the property’s quality,” said Craig Billings, CEO of Wynn Resorts. “Equally important, the bespoke structure and terms of the lease allow us to maintain a great deal of operating flexibility across economic cycles. The proceeds of the transaction also provide us with liquidity for several of our upcoming development projects and the potential to retire other debt.”
The full impact of this business arrangement is not expected to appreciably change or to alter the management of the casino and hotel, according to officials at Encore.
With almost $800 million or more coming in right now per annum, paying the monthly rent should be easy.
It is expected the Massachusetts Gaming Commission will examine the stipulations in the leaseback agreement between Realty Income and Encore.
There is a great deal of interest in a 6-acre parcel Wynn apparently owns abutting the casino property which is located in Boston.
According to environmental sources, that 6-acre parcel has remaining pollution issues which must be resolved before the Gaming Commission can give the OK to the land sale.
In addition, that parcel has an abutter, the city of Boston, another fact that might cause some painful questions to be asked.