Pinnacle Entertainment Board Approves $800 Million of Investments in St. Louis
ST LOUIS, MO, AUgust 29, 2005. Pinnacle Entertainment, Inc. announced today that its Board of Directors has approved an increased level of investment in the Company's two casino projects currently under development in the St. Louis, Missouri area.
The total project budget for the downtown St. Louis hotel, casino and spa project has increased to approximately $400 million, from the minimum commitment of $208 million previously made as part of the Company's redevelopment agreement with the City of St. Louis. This total includes $45 million to acquire and refurbish the Embassy Suites hotel directly adjacent to the project site, and approximately $15 million being invested in additional land around the planned project.
"This level of investment makes Pinnacle a major force in the renewal of downtown St. Louis, and it will further strengthen our market position," said Daniel R. Lee, Chairman and CEO of Pinnacle Entertainment. "After examining the growth of the market and the status of the competition, we've decided to build a facility that is significant in both scope and quality. We intend to lead the currently underserved downtown gaming and entertainment market and today's announcement reflects that commitment."
Cumulatively, Pinnacle owns, has agreed to purchase, or has under option to lease approximately 18 acres of contiguous land for the development of its downtown St. Louis project.
The Company also announced an increase in its planned investment in its hotel, casino and related development project in the community of Lemay, in St. Louis County. This project's budget has been established at $375 million. The Company previously had announced a minimum commitment of $300 million as part of its agreement with the St. Louis County Port Authority. The Lemay facility is scheduled to open in 2008. The $375 million includes the estimated cost to remediate the former industrial site, construct a four-lane road into the property (including a major bridge over the neighboring railroad tracks), and create a county park on 24 acres of the 80-acre site.
"We have great confidence in the St. Louis County market," Lee said. "Our architects and designers have developed a unique 'look' for this property, which is likely to become a travel destination for the entire region. We expect to break ground in Lemay in approximately one month."
Pinnacle Entertainment was previously selected for the two St. Louis-area projects in early 2004 by the City and County of St. Louis, and then by the Missouri Gaming Commission in competitive bid processes that included applications from several gaming companies. Management believes that the Company currently has the resources to fund the increased St. Louis investment commitment, including its cash on hand, available credit lines, potential borrowing capacity, and anticipated cash flows.
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