Penn National forms spin-off company for tax breaks on real estate
By Jamison Cocklin
Penn National Gaming Inc. announced Friday it had completed the creation of a spinoff company that will assume ownership of all the real estate associated with the racino under construction in Austintown.
The company first announced in November 2012 that it would create Gaming and Leisure Properties Inc. Now that the transaction is complete, the new company will own the real estate associated with 21 casino facilities and lease 19 of those facilities back to Penn National.
When it files its 2014 federal income-tax returns, GLPI will elect the status of a real-estate investment trust, which will allow it to receive tax breaks and other special considerations on the property it owns.
Penn National, based in Wyomissing, Pa., still will operate and manage the casino, while GLPI will hold the real estate. Some of Penn National’s other properties were not included in Friday’s announcement.
The move also allowed Penn National to refinance some of its debt and raise capital for transactions and fees associated with the spinoff and any future purchases GLPI completes to grow its portfolio.
GLPI issued a series of senior notes, or high priority bonds, worth more than $2 billion.
Records filed with the Mahoning County Auditor’s office show Penn National already has transferred $5.6 million worth of land off Canfield-Niles Road — where the Hollywood Gaming at Mahoning Valley Race Course is under construction — to GLPI.
The racino is expected to be complete late next year.