Call me overly-cynical, but I stand by my equation:

 

Skywalk + Entire Building = Phase II * 0

 

You forgot to factor the $80 million (to purchase the air rights) in your equation

 

You're right Hts.  Math was never my strong point, but I've lived in this town long enough to know when something doesn't feel right.

from what i've heard is that they are moving all the casino offices up and expanding the third floor (poker rooms) for the WSOP event.

I know Key is moving some employees out of Key tower to Brooklyn, so its not just Key's Higbee employees

I dont think it was in Keys plans to consolidate in Brooklyn. There was just a big restructuring that resulted in consolidation to Higbee this year, not to mention recent interior remodeling. This look like it was all the casinos choice. No matter what they have planned, I hope its not "phase two".

 

Just to clarify, landlords generally don't have the power to "terminate" a lease unilaterally. Per news releases from 2008 (http://www.thefreelibrary.com/Key+Signs+Lease+In+Renovated+Higbee+Building.-a0174286520), Key signed a 15 year lease, so if Key is really leaving, it's because Gilbert handed Key a pile of money or because Key otherwise wanted to leave.

"Moody's downgraded Rock's corporate rating from B3, which indicates high credit risk, to Caa1, which signifies very high risk."

 

http://www.cleveland.com/metro/index.ssf/2013/10/rock_ohio_caesars_gets_negativ.html#incart_m-rpt-2

 

This does not look good for phase 2...

From the article:

 

"Rock Ohio Caesars also owns ThistleDown Racino in North Randall. The company has indicated that it may exercise an option to move the track to the Akron-Canton area after Hard Rock opens."

 

Moving ThistleDown further out to the edge of the Horseshoe's market may offer some hope for a phase two, but otherwise this does not look well: lowered credit rating coupled with a weaker than expected Ohio market that also has more competition than expected with the introduction of the racinos.  I've been saying it but I really think they're going to re-evaluate phase 2 based on market realities that now exists.

^With that said the Horseshoe has really enlivened this section of downtown, Public Square, and now serves as the missing link of activity that can connect East 4th Street to the Warehouse district...especially if one travels down Prospect to West 6th.  Saddened that Rock is in this position where phase 2 as envisioned may not happen but all in all this has still been a HUGE benefit to Cleveland.

"Moody's downgraded Rock's corporate rating from B3, which indicates high credit risk, to Caa1, which signifies very high risk."

 

http://www.cleveland.com/metro/index.ssf/2013/10/rock_ohio_caesars_gets_negativ.html#incart_m-rpt-2

 

This does not look good for phase 2...

 

So they're saying that Rock Ohio is.... A gamble?

Horseshoe manager Marcus Glover was on 'Sound of Ideas' this morning talking about how the casino connects to downtown and the eventual phase II. On phase II he said there was no definite time table concerning construction because they are still trying to figure out what it will entail. He even went so far as to mention there may be a residential component to the project, and he'd seen some massing but nothing was anywhere near ready to begin construction.

I liked the comments about getting phase II done right, meaning more than just a casino....  it now seems most states have casinos....  making the attraction of that area more than just the casino is the correct vision....

I suspect Phase II will be build behind tower city right after the Neiman Marcus goes in

^Originally I was not one of the Phase 2 skeptics...but as time goes by I am becoming one more and more...especially with Phase 1 revenues what they are.

 

I also heard the above mentioned interview with the GM and thought his answer when directly asked about Phase 2 was very wishy washy.  Refused to give even a bare bones time line and would only assert that they had completed some preliminary "modeling" (what ever that means).  Said it was going to be more than a casino (apartments, retail etc) but that they were not necessarily going to be the developers of all the ancillary stuff.

 

There is only so many times (and so many years) you can say we spent 80 million dollars to buy the property so of course we are going to build Phase 2 without offering "more" before people start to doubt.

I suspect Phase II will be build behind tower city right after the Neiman Marcus goes in

sar·casm  (särkzm)

1. A cutting, often ironic remark intended to wound.

2. A form of wit that is marked by the use of sarcastic language and is intended to make its victim the butt of contempt or ridicule.

3. Latin meaning: to mockapus danielelium gilbertorius always and often

Latin meaning: to mockapus danielelium gilbertorius always and often

 

Wow! That's a freakin' work of literature!

Hey I'm just the messenger here...if you don't believe it will happen, what can I say.

Anyway this is a post on facebook from the HorseShoeCasino tonight in response to someones question.

That parking lot in Northfield looks pretty full when I go by there.  How well will that sustain?  Hard to say.

 

I'm guessing that Horseshoe is doing exactly that and the more Hard Rock sustains, the less likely Phase II is to get built.

^Like I stated above, I am starting to be a Phase 2 non believer...however...for what is worth a relative was at the Hard Rock over the holidays and he said it was dead.

The sky walk was phase 2......

I'm rather apathetic about Phase II.  I don't think that the success or failure of the Hard Rock will have much of an effect on whether it gets built.  You could make the argument either way.  I do, however, feel that something will be built on the lot envisioned for Phase II and it might be waaaaaay more appealing to this board than any second phase of the casino.

Does your last post mean something Hts??

^No inside scoop, if that is what you are asking.  It is just simple logic in my head.  They spent $85 million for the air rights, the ramp was demolished, and engineering studies (at least preliminary studies) have been done. 

I'm guessing that Horseshoe is doing exactly that and the more Hard Rock sustains, the less likely Phase II is to get built.

 

So your business logic here is that when someone starts to lose market share to a new competitor, their reaction to combat this will be to do nothing?

^No inside scoop, if that is what you are asking.  It is just simple logic in my head.  They spent $85 million for the air rights, the ramp was demolished, and engineering studies (at least preliminary studies) have been done. 

 

I agree with this. Something tells me this could be more of a mixed-use project. I bet it will have some entertainment aspects to it, but I also think there may be more residential, hotel and maybe some office elements.

^Eggsactly my line of thought

^No inside scoop, if that is what you are asking.  It is just simple logic in my head.  They spent $85 million for the air rights, the ramp was demolished, and engineering studies (at least preliminary studies) have been done. 

 

I agree with this. Something tells me this could be more of a mixed-use project. I bet it will have some entertainment aspects to it, but I also think there may be more residential, hotel and maybe some office elements.

 

There WILL be a gambling aspect to it (after all, why not? You have the right in the amendment to have a certain amount of slots, you aren't at capacity currently and only the casinos can have table games, which make a TON of money. Gambling will be part of it). But I agree that this will be gambling PLUS something else. It will be mixed use, possibly even some sort of performance hall component to it, similar to current casinos. The Horseshoe lost out on having the World Series of Poker taped here because its room wasn't big enough. That almost definitely will be addressed in phase 2. I still believe that there is NO WAY this doesn't get built. Even billionaires don't just piss away $85 million dollars for something that wouldn't get 85 mil on the market if they tried to sell the land. It will get built

I'm guessing that Horseshoe is doing exactly that and the more Hard Rock sustains, the less likely Phase II is to get built.

 

So your business logic here is that when someone starts to lose market share to a new competitor, their reaction to combat this will be to do nothing?

 

I agree with you. I would argue that these racinos make it MORE LIKELY that phase 2 will be built, not less. They know the deficiencies that the Horseshoe has. That WILL be addressed. They aren't going to let that money be taken off of the table for them and they're not going to let suburban racinos damage them. They want to be the ones doing the damaging. It will likely be mixed use, which will make it more feasible to do, but its going to happen.

Despite my feelings about the casino to this point, I really don't think anything will be done until the river bulkheads are going to be replaced. 

 

The good news is that, from murmurs I have heard, the Army Corps of Engineers may be considering doing it.  IF THAT HAPPENS, the whole river will go nuts.  The Casino, Scranton Peninsula, the rest of the Flats will be quickly developed.

I'm guessing that Horseshoe is doing exactly that and the more Hard Rock sustains, the less likely Phase II is to get built.

 

So your business logic here is that when someone starts to lose market share to a new competitor, their reaction to combat this will be to do nothing?

 

I agree with you. I would argue that these racinos make it MORE LIKELY that phase 2 will be built, not less. They know the deficiencies that the Horseshoe has. That WILL be addressed. They aren't going to let that money be taken off of the table for them and they're not going to let suburban racinos damage them. They want to be the ones doing the damaging. It will likely be mixed use, which will make it more feasible to do, but its going to happen.

 

I think phase 2 could also morph into an expansion into more of the Higbee building.  Rock gaming also spent millions to buy the rest of the building.  Yes that was for the walkway but that also gives them an option to expand without the costly and time consuming expense of engineering behind Tower City.  Especially if they want to quickly respond to the Hard Rock, because they've been "engineering" for years, construction is even further away.  I really think they will expand into real estate they can quickly convert to gaming...heck that's why they built in the Higbee in the first place, speed to get it done and open.

 

With that said I agree with comments that while phase 2 may not go behind TC something else will.  The energy the casino has brought to the area along with all of the other developments downtown can revive mixed use plans for the site.  With only a few buildings left for residential conversion and the office market tightening, we've all been talking about new construction at the FEB and maybe the public square lot...but I wouldn't count out something at tower city as well.  TC is so well connected and has so many amenities it would be attractive for residential, office and entertainment construction.  And that type of development wold drive the need for improved retail :-)

Some Phase 2 news. http://www.newsnet5.com/news/local-news/cleveland-metro/rock-ohio-caesars-may-not-have-any-new-casinos-to-open-in-2014-but-year-brings-important-decisions

Some Phase 2 news. http://www.newsnet5.com/news/local-news/cleveland-metro/rock-ohio-caesars-may-not-have-any-new-casinos-to-open-in-2014-but-year-brings-important-decisions

 

Or not.

Horseshoe Casino Cleveland's second phase will likely occur but what it will offer is still a question

 

CLEVELAND, Ohio - Horseshoe Casino Cleveland will likely expand but its long-awaited second phase may include more restaurants, retail stores and entertainment venues than slots and table games, a casino expert said.

 

The $350 million renovation of four floors of the historic Higbees department store was always billed as the first phase of a larger downtown casino project that would ultimately see a $600 million, 16-acre casino complex on nearby Huron Road.

 

The casino opened almost two years ago but it has not been feasible to look at a second phase until the gaming and entertainment offerings in northeast Ohio were more static, general manager Marcus Glover said in a recent interview.

 

Following the opening of the Hard Rock Rocksino Northfield Park last December, Rock Ohio Caesars executives began evaluating the next development step.

 

“We hope to get to a place where we can design it,” Glover said. “Dan (Gilbert, chairman of Rock Ohio Caesars) is committed to some development in the future.”

 

 

more at: http://www.cleveland.com/metro/index.ssf/2014/05/horseshoe_cleveland_casinos_se.html#incart_m-rpt-1

^This is the same blah blah blah from six months ago. 

This is the first time the casino wasn't gung-ho about expansion.  They've finally admitted that the delay isn't about engineering, but is, instead, about the market.  Going from, 'we wouldn't spend $80 million for nothing' to 'it is still a feasible project' is discouraging.

If they do a nice job with the rest of Higbees, I would be fine without a Phase II.

I think phase 2 will be a Mixed use project  -  Hotel,  Apartments, Concert Venue , Restaurants,  Retail and last but not least some gaming tables & slots but not like originally anticipated.

I think phase 2 will be a Mixed use project  -  Hotel,  Apartments, Concert Venue , Restaurants,  Retail and last but not least some gaming tables & slots but not like originally anticipated.

 

Probably not until Phase II of the Flats is completed.  By that time Gilbert will be ready to suck the life out of it and move everything upstream. ;)

 

In all seriousness though, I like the idea of apartments, restaurants and some small casino component.  But please no concert venue.  Casino venues are the worst.

There could be a silver lining to the delay. For one I don't trust Dan Gilbert. I want to see some kind of indication that his use of the riverside will constitute for more than a parking lot or access road to parking.

 

There's still more time to hopefully put some pressure on the idea of continuing the progress being made on FEB II, Whiskey Island, Skate Park and Rowing Foundation. Until then Gilbert gets a solid vote of no confidence based on his past indiscretion.

I think phase 2 will be a Mixed use project  -  Hotel,  Apartments, Concert Venue , Restaurants,  Retail and last but not least some gaming tables & slots but not like originally anticipated.

 

I doubt that there will be apartments involved but everything else I think will be part of that development. There will be tables and slots, but phase 2 will be developed much more like a traditional casino resort with the other amenities involved.

 

From what I've been told from friends that work at the Horseshoe, they will at some point be using other floors in the Higbee building. I've been told that the building is predominately empty other than the 4 floors they currently use. They're currently building a stage, so I think after they explore more uses in the Higbee, they'll build phase 2. Phase 2 WILL be built because they need more stuff. And because they want to compete with the Hard Rock. (Which also means that they will HAVE to have a casino concert venue, which I wholeheartedly support.)

 

Now I don't know if this is possible or if it's enough land, but since they're talking about moving Thistledown anyway, why not move it downtown, combine it with the phase 2 plans and consolidate gaming operations downtown? I don't know if it's possible but I would do it

You couldn't move the race track downtown. Plus the law states you can only have one casino at that location... though you can expand that one that's allowed.

If they do a nice job with the rest of Higbees, I would be fine without a Phase II.

 

I really think this is what they will do as Phase 2 at this point.  The engineering cost alone building on the site behind TC was challenging prior to the state allowing for racinos, but now with all the added competition that was not expected when the casino vote took place, I'm sure they're re-evaluating everything based on the market realities.  I'm also fine with a fully restored Higbee Building, even including some concert venue / lounge / club space on the upper floors offering some cool views out onto public square.  I think new construction cost behind TC are just too much.  If Gilbert's property were the only game in town as originally envisioned, then he'd do it.  But with the market split I can't see him spending what, another $600M on the new property...that might sink the whole thing if he couldn't capture a majority of the market.

Id love for the casino to expand to the upper floors of the Higbee, and add retail options onto the first floor where stores would front Ontario.

I've been told that phase 2 WILL happen. They do want to add more things in the Higbee building first, which also means that phase 2 will likely have less slots than originally planned, but I've been told by people who work there that phase 2 is still a go

With the decision to keep Thistledown where it is, I very much doubt Phase 2 happens anytime soon.

With the decision to keep Thistledown where it is, I very much doubt Phase 2 happens anytime soon.

 

What theaters and stages does Thistledown have?

One has little to do with the other, imo

Unfortunately the game changed when JohnnyK decided to flood the state of Ohio with Racino's. Without a vote of the people. We the citizens voted to approve 4 Casino's. But the governor decided he had a better idea and diluted the market. Which is why we wait on Phase2.

With the decision to keep Thistledown where it is, I very much doubt Phase 2 happens anytime soon.

 

Really!?  Thistledown IS staying put?  I missed that one.  The last I read (PD) was that, though the Thistledown racino was financially doing well, Gilbert/Rock was mum on a possible relocation to Akron/Canton.  I'm thrilled if the racetrack/casino is staying, the Warrensville Hts/N. Randall area really needs it. Do you have a link?

Unfortunately the game changed when JohnnyK decided to flood the state of Ohio with Racino's. Without a vote of the people. We the citizens voted to approve 4 Casino's. But the governor decided he had a better idea and diluted the market. Which is why we wait on Phase2.

 

Why should there only be four locations? 

^Because that's what WE voted on.