Caesars Virginia Casino Development Cost Balloons to $750M

Posted on: May 7, 2024, 04:23h. 

Last updated on: May 7, 2024, 08:46h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The price tag for Caesars Virginia in Danville continues to soar.

Caesars Virginia casino Danville
As Caesars Virginia continues to rise in Danville, so does the overall construction cost, reps with the casino giant recently divulged. As a result, Caesars is looking to ditch a planned concert venue. (Image: Caesars Virginia)

Caesars Entertainment is building an integrated resort casino on the site of the former Dan River Mills textile campus.

When Danville voters authorized its construction through a local ballot referendum in November 2020, the development was to run around $400 million. The cost ballooned to $500 million by September 2021 and to $650 million by August 2022. Now, Caesars reps tell the local government in Danville that it expects the full cost to come in around $750 million, almost double the initial price tag.

Caesars told the Danville City Council that an array of culprits are responsible. During site prep of the former textile mill, underground tunnels were discovered that compounded the difficulty in readying the ground for the casino and hotel. Ongoing inflation that’s driving higher labor and materials costs has also upped the resort’s ante.

Caesars Virginia is expected to be completed sometime before the year’s end.

Another casino being built in Virginia — Hard Rock Hotel & Casino Bristol — has experienced similar budget rises. Hard Rock in February said its resort price had climbed from $300 million when it was announced in 2019 to approximately $550 million.

Local Agreement Amendments 

Caesars Entertainment’s disclosing of the escalating cost for its first casino in Virginia, which it’s building through a partnership with minority investor Eastern Band of Cherokee Indians, came through the company’s request to amend its local agreement with the Danville City Council. Caesars is seeking local approval from the city to adjust its hiring commitments.

When Caesars signed the local development contract with the Danville City Council and Danville Industrial Development Authority, the casino operator agreed to hire a minimum of 1,300 permanent workers to run the resort’s operations. With costlier rates for employees and higher overhead pricing for goods, Caesars is asking to have that minimum staffing number reduced by more than 30% to 900 positions.

Since we began working on this project, the hospitality landscape has changed significantly,” Chris Albrecht, general manager of Caesars Virginia, told the Danville Register & Bee. “As our industry evolves, the employment range in the development agreement allows us the flexibility to operate a world-class resort in a way that leaves room for innovation, efficiency, and the exceptional experience we’ve promised to deliver in Danville.”

Caesars is also seeking permission to strip a 2,500-seat live entertainment plan from the project. Caesars reps say such events, if approved by the city, would instead be held in the multipurpose conference center that will complement the casino resort.

The amended agreement suggests increasing the conference space from 35,000 square feet to 40,000 square feet if the request is approved. The Danville City Council is scheduled to review the amendments on Tuesday.

Ongoing Changes

This isn’t the first time Caesars Virginia has undergone a significant design change.

Soon after Danville voters approved the casino referendum, Caesars hinted that its Virginia destination could have as many as 500 hotel guestrooms. The development agreement mandates the hotel include a minimum of 300 occupancies rated “four stars” or higher.

Caesars in February revealed that the total number of hotel rooms will be around 320. Danville City Manager Ken Larking says the council is receptive to the ongoing changes.

“Construction costs have skyrocketed. They are tweaking the design,” Larking said earlier this year.