After numerous setbacks, Urban One and its CEO Alfred Liggins expressed confidence in mid-June 2023 that its dream of building and operating a casino resort in Virginia’s capital city would become a reality, with Richmond City Council voting 8-1 in January 2022 to place the gaming facility proposal on the ballot for another vote.
Those casting their ballot in Richmond had their say on Tuesday, and it’s not good news for Urban One. Investors responded by selling off “UONE” shares in a significant way.
According to the Richmond Times-Dispatch, the political action committee for the developers of the proposed $562 million casino in the southern portion of Richmond accepted defeat, as its second attempt to get the project built failed to gain voter support.
As such, the Richmond Grand Resort & Casino plan has fizzled, as did the original referendum in November 2021 to get voters to approve what was originally billed as the ONE Casino + Resort.
Some $10 million had been spent on a pro-casino campaign, with Churchill Downs and Urban One, which teamed up for the Richmond Grand project, footing the bill. For the casino developers, “good paying Union careers” was a big selling point, promoting “1,300 new careers that provide a pathway to a middle class with $55,000 in average annual compensation and benefits, including healthcare and retirement.” There was also a pledge of $30 million in annual revenue “to invest in a stronger, safer city with better-funded schools and services, especially for Richmond’s children.” Among those recruited to get a “yes” vote from voters was entertainer Ronald Isley.
Alas, Richmond voters in all but the Eighth and Ninth districts said no to the proposal, which fell short by roughly 13,185 votes; Richmond voters closest to the proposed site at at 2001 Walmsley Blvd. and 4700 Trenton Ave. voted overwhelmingly for it, the Times-Dispatch reported.
A light electorate may have played a role in the outcome. Voter turnout was 43%, with 58% of voters saying “No” and just 41% selecting “Yes,” based on Virginia state Board of Elections preliminary results.
The ONE Casino + Resort proposal was defeated by a much smaller margin.
For Urban One, which moved forward with a divestment of its stake in MGM National Harbor casino resort in Prince George’s County, Md., generating an impressive $136.8 million return on a $40 million investment made in 2016, the defeat puts into question its long-term revenue at a most fragile point in time for the company.
As of 10:45am Eastern on Wednesday, “UONE” was down 31.6% in value to $3.9212; key institutional investors include Zazove Associates LLC, which owns 5.95% of the company’s publicly traded shares. As the Closing Bell neared, UONE was down 36% to $3.67.
“UONEK,” a preferred stock held by insiders and institutional investors including Zazove, which has 7.2% equity interest via this listing, was down by 31.2%, to $3.8850. With the Closing Bell just seconds away, UONEK was off by 37.7%, to $3.52/
With the 8-1 vote in January 2022, the City of Richmond City Council determined that Urban One “didn’t show its full cards” in the first referendum, and that the benefits from the $565 million proposal were simply too good to pass up.
What’s next for Urban One and Liggins? In an interview in October 2023 with the Richmond Times-Dispatch he reiterated earlier comments that it would no longer be a Richmond issue, with the Commonwealth of Virginia determining where the next proposed casino will be decided on. “I think that this project will go somewhere else,” Liggins said.
But, how, and if, it involves Urban One remains a question investors could be uneasy about.
The timing of the Richmond referendum on November 8 comes as Urban One continues to work with EY to complete its restatement quarterly financial statements for 2023. This was necessary after Urban One dismissed BDO as its independent outside auditing firm for its failure in properly stating its investment in the MGM National Harbor casino resort.
