DETROIT (AP) — Businessman and Cleveland Cavaliers owner Dan Gilbert has reached a $1 billion agreement to sell the Greektown Casino-Hotel in downtown Detroit, one of the city’s three casinos, companies involved in the deal announced Wednesday.
The move marks the latest in billions of dollars in investments planned or underway by Gilbert and his companies in Detroit, where he has a major real estate presence. Other projects include a planned skyscraper and technology startups.
Gilbert’s Detroit-based JACK Entertainment said it planned to sell the casino to Pennsylvania-based Penn National Gaming and New York-based VICI Properties. The deal requires state and federal regulatory approval. JACK Entertainment said it’s also “continuing a strategic assessment for its remaining gaming properties” in other states.
Gilbert bought Greektown Casino-Hotel more than five years ago after it was reorganized in bankruptcy. Under the sale agreement, Penn National will acquire the operating assets of Greektown for about $300 million and VICI Properties will acquire the land and real estate assets for about $700 million.
“We invested hundreds of millions of dollars in it and put great management and culture in place,” Matt Cullen, CEO of Jack Entertainment, told The Associated Press.
He said the proceeds from the sale could boost several developments. Those include a skyscraper that would be the city’s tallest, another high-rise and mixed-use development, and redeveloping the site of the failed Wayne County Jail. All told, the projects represent about $3 billion in investment.
Cullen said the proceeds could also help develop a new technology platform within Quicken Loans Inc., of which Gilbert is founder and chairman, or at StockX, the venture Gilbert co-founded billing itself as the online “stock market of things,” such as in-demand sneakers.
Alexis Wiley, chief of staff for Detroit Mayor Mike Duggan, said in a statement that city officials will review details of the agreement as they are made available, but that they are pleased that existing contracts with union workers will be honored under the new ownership.
The sale is expected to be finalized in mid-to-late 2019. During the sale process, plans call for the casino and hotel to remain open. JACK Entertainment said Greektown employees are expected to get compensation and benefit packages at least at current levels.
Penn National owns, operates or has ownership interests in dozens of gambling and racing facilities around the country. JACK Entertainment also owns and operates such properties in Cleveland, Cincinnati and Baltimore as well as racing facilities in Ohio and Kentucky.