Hall of Fame Resort to go private with acquisition by IRG affiliate
Story Highlights Hall of Fame Resort agrees to be acquired by Stuart Lichter's affiliate.
Acquisition would make Hall of Fame Resort a private company.
Deal includes restructuring leases and restarting waterpark and hotel construction.
Hall of Fame Resort & Entertainment Co. in Canton, Ohio, has agreed to be acquired by an affiliate of the company's largest shareholder and director — Stuart Lichter, founder and president of Industrial Realty Group LLC in Los Angeles.
Upon completion of the acquisition, which has several conditions, Hall of Fame Resort would become a privately held company.
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Under the acquisition agreement, a new Lichter-affiliated investment vehicle — HOFV Holdings LLC — would acquire the outstanding shares of Hall of Fame Resort that IRG and its affiliates don't already own for 90 cents per share, according to a Hall of Fame Resort statement.
Based on recent regulatory filings, the cost of buying the outstanding shares would be about $4 million.
The resort company also said it has signed a letter of intent for a new lease on the indoor waterpark on its 100-acre campus and to restructure the leases for its future on-site hotel and Tom Benson Hall of Fame Stadium properties there.
The resort company defaulted on the ground lease for its Gameday Bay waterpark in October and has yet to build an expected Hilton Tapestry hotel adjacent to it. Hall of Fame Village, the name of the resort property, includes a Center for Performance and Constellation Center for Excellence, as well as a retail strip and play-action plaza.
The parties involved are finalizing the terms for the lease restructuring, which Hall of Fame Resort calls "a big step toward restarting construction of the waterpark and the on-site hotel."
The vision for Hall of Fame Resort
"Our vision has always been to build a world-class sports and entertainment company, which includes our destination in the Hall of Fame Village, Hall of Fame Village Media and Gold Summit Gaming," Michael Crawford, Hall of Fame Resort's outgoing president and CEO, said in his company's statement. "This is an ambitious goal. It entails a continued focus on our strategic plan, and it requires investing in the critical areas that will help ensure long-term growth."
Crawford, whose resignation from the company takes effect May 18, continued, "We operate in a dynamic and sometimes challenging environment, and as a private company upon completion of the transaction, we believe that we will have strategic flexibility and additional working capital to invest in each of our business verticals and to continue to build the company as we have planned."
Acquisition subject to several IRG conditions
The acquisition is subject to approval by holders of a majority of the company's common stock and is conditioned on:
HOFV Holdings, the new Lichter-affiliated investor, obtaining $20 million in financing.
Consummation of the proposed lease restructuring.
Consummation of additional project-level financing of at least $125 million (likely to complete the waterpark and build the on-site hotel).
Obtaining third-party consents.
The acquisition also contemplates Hall of Fame Resort selling to and leasing back properties from IRG that are not included in the lease restructuring, the resort company said.
Lichter and IRG are longterm investors in the resort
Lichter and IRG, which operates one of the largest commercial real estate portfolios in the United States including several Northeast Ohio properties, began investing in Hall of Fame Resort before the company's going-public transaction in 2020. IRG also is the resort's master developer.
Since then, Lichter and his affiliated companies have invested tens of millions of dollars in the resort property through loans and purchases of securities. More recently, Lichter and his companies also have refinanced the resort's debt.
As of Jan. 15, Lichter and his affiliates owned 72.5% of the resort company's shares, including shares underlying convertible debt and warrants, according to a regulatory filing. That percentage likely is higher now because of recent amendments to a convertible debt agreement aimed at freeing up cash for the struggling resort company.
In June 2024, Lichter revealed in a regulatory filing that he was talking with financial advisors and stakeholders about taking the debt-heavy resort company private to help solve its "significant liquidity challenges," Lichter said in a preliminary nonbinding proposal to Hall of Fame Resort's board in October.
Shares of Hall of Fame Resort (Nasdaq: HOFV) were up more than 20% to 86 cents a share in noontime trading on Thursday as investors bought into the 90-cent-a-share acquisition price.
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