Penn Entertainment promised to construct a nearby hotel within two years of being given permission to develop the area that would eventually become its Hollywood Casino at NASCAR's Kansas Speedway. However, ten years have passed since that deadline, and no such hotel has opened.

Rather, the developer has opted to fork out $13 million in fines—the cost associated with missing ten consecutive deadlines.

Under the terms of its 2009 agreement with the Unified Government of Wyandotte County and Kansas City (WyCo & KCK), Kansas Entertainment LLC committed to build a hotel tower with at least 200 rooms. Penn and International Speedway Corp. collaborated to form Kansas Entertainment LLC, which is currently a part of NASCAR. 

WyCo & KCK provided STAR bonds to the project in exchange.Kansas municipalities may use this unique funding source to build significant business, entertainment, and tourism initiatives.

Penalties and Postponements

As per the agreement, hotel building would start no later than February 2014, the second anniversary of the casino's establishment.According to the agreement, Kansas Entertainment LLC would pay WyCo & KCK 1% of the casino's yearly net gaming revenues until the work started if this didn't happen.

After reiterating that it intended to begin construction on the hotel in October 2014, Kansas Entertainment LLC changed its initial timeline to October 2015, pending the completion of an economic analysis.

With reference to "soft economic conditions in the region, especially in the hotel market," the developer later that year said it would be delaying the hotel project. 

Penn Plans Continue 

Penn has said it monitors area occupancy rates and new hotel developments in the region and insists it “continues to explore various opportunities to build a hotel adjacent to Hollywood Casino.”

“As part of that evaluation, we consider the existing infrastructure and occupancy rates of neighboring and nearby hotels, as well as the marketing partnerships we have developed with these businesses over the years,” Jeff Morris, Penn’s vice president for public affairs and government relations, told The Kansas City Business Journal last year.

"We are proud of the relationships we have built in Wyandotte County since we opened in 2012, and look forward to building upon our success here for years to come,” he added.

For now, though, Kansas Entertainment LLC is content to keep paying the fines, something Wyandotte County Administrator David Johnston says they may be doing for some time.

“I think a lot of people had this misconception it was a 10-year window. No, this goes on, and it will stop only if they build,” Johnson told the TV station Fox 4 this week.