Lewis Fanger: Yes. So, Chamonix, just think of the restricted cash account largely taking care of that. We had about $38 million left in that restricted cash account at the end of the year. I think in real time, literally as of today, I’ve got $20 million sitting in that account now. So fruitful thought there. So we’ll work through that balance before the end of the second quarter. Maintenance CapEx historically has been on the lighter side, so we’ve been trending close to $3 million. I tell people generally $3 million to $5 million a year for maintenance CapEx. Maybe that creeps up slightly as we buy things like more slot machines. But the nice thing is while we have some newer properties, they are new, and so there isn’t a lot of maintenance CapEx outside of things like slot machines.
So it’s not going to be a crazy year. As you go into kind of end of ’24 and into ’25 and we start generating some pretty meaningful cash flow. We’ll start looking at things like completing the construction quality blueprints for American Place and things like that maybe even doing some site work, but that work is very, very small in terms of cost.
Dan Lee: Yes, I mean it might be 10 or 15 out of the $325 million.
Lewis Fanger: Yes.
Chad Beynon: Okay. Perfect. Thank you. And then as we think about kind of the completion of American Place Permanent, any updated view in terms of that $325 million that’s left to spend, what type of return we should get on that will the property significantly change in terms of who’s in the property, how much it’ll cost to run the property, how are you thinking about that kind of medium term, what that can mean in that deep population market?
Dan Lee: Yes, it’s kind of a little bit of a complicated algorithm because we’re not allowed to operate the temporary indefinitely, right? So how do you really look at it, right? But the temporary is making what it’s making in a tent, a sprung structure. And during the day, it looks like where the Department of Motor Vehicles stores salt. I mean, it really is pretty unimpressive. At night, we project images on it so it’s not just a black hole. But it doesn’t have the curb appeal that you drive by and say, “Wow, look at that.” Once you walk in, it’s much nicer than you expect from the outside, but getting people to walk in the door is a little bit of a challenge. So the permanent will have much better curb appeal and be even nicer on the inside. It’ll be somewhat bigger. And you start looking at — I mean, I remember Rivers is making $300 million a year EBDITA, until we figured, and I think the Potawatomi is about $200 million a year.
Chad Beynon: That sounds great.
Dan Lee: And we’re trying to get to $100 million. And if you look at the demographics, that should be doable with a permanent facility. It’s not doable with a temporary facility. A temporary facility may be able to achieve half of that. So if you say, well, there’s an incremental $50 million for $325 million investment, that’s an okay return. Now, we’ve invested $175 so far, but a good chunk of that is stuff that will go into the permanent. For example, there’s $20-odd millions of slot machines that we will move next door. We had put in storm sewers and surface parking lots and a fence around the place that is all part of the permanent. And then recruiting and training a workforce, which is tens of millions of dollars of pre-opening expenses. We now have a workforce that can move next door very easily. So —
Chad Beynon: Three years or four years of marketing the place, right, it’s a lot of that sort of stuff.
Dan Lee: So, there’s a lot of ways to look at it. You can look at it as the temporary, what it earns, if you say, well, maybe of the $175 million we’ve spent so far, maybe a $100 million is the temporary and $75 million is stuff that’s really for the permanent. I’m making these numbers up now. And so the temporary will pay for itself and then produce cash towards the permanent. And so, the net cost of the permanent is not really $500 million. You end up building the permanent for $400 million net of what you did in the temporary and then you make $100 million a year. There’s a lot of different ways to analyze it. It’s kind of a complicated algorithm. But just about any way you analyze it, you get a pretty good return, which is what happens if you have the closest casino to 1 million people.
I go to Durango Station, and I kind of drool, because frankly, they did a very nice job there. In fact, there’s some stuff they did there that we’re going to kind of take note of when we complete the designs of the Permanent American Place. They are probably the closest casino to three or four hundred thousand people. That slice of Las Vegas that’s on the southwest side of town. And you look at how many people they have in the place. And part of that is in Las Vegas, we’re very accustomed to thinking, well, we’re going out to dinner. Let’s go to Red Rock Station. Let’s go to Durango Station. And that isn’t here yet. We don’t get a lot of people who come in to have dinner at our place, and then they’ll gamble before or after. And so there’s a learning process that will come on.
But the demographics of what we have here is significantly better than what they have at Durango Station. Now, we’re not going to spend the type of money. We’re not going to be as big as they are. I think we could be the same quality that they are, but they spent $750 million. We’re not, we’re going to spend about half that. But we can be the same quality, just not as big. And we’ve designed it in a way that it can be expanded later quite easily.
Lewis Fanger: It’s funny sometimes, Chad, because when you think about where we are, we’re located in one of the wealthiest counties in the entire country. And when I look at our gaming database sometimes, we have customers in there that have already gambled spent five, six figures in our casino. And I scratch my head sometimes and I say, “Wow, they, despite the tent look on the outside, they have come inside.” And then saying, “Oh, my gosh, this is a great place on the inside.” The people are unbelievably kind. The service is great. But the thing is, there are a lot of other people in this very wealthy county that will never get past the fact that, that is a tent on the outside. And where the Permanent will make a lot more sense as that, that building in itself will be a draw for the first time for a lot of people.
Chad Beynon: Thanks, guys. I appreciate it.
Dan Lee: Yes, I would tell you, Rivers is a great location, but it’s not great curb appeal.
Chad Beynon: Yes.
Dan Lee: You drive by, they have some backlit blue glass. We will have better curb appeal than Rivers. They have a great location.
Operator: Our next question is from John DeCree with CBRE Securities. Please proceed.
John DeCree: Good afternoon, Dan. Good afternoon, Lewis. I just wanted to revisit an earlier question. We’ve been getting a lot of questions about the temporary in the quarter. I think Lewis, maybe earlier you’ve talked about elevated marketing if I heard correctly, about a 1.2 million or so in the quarter. But I think even adding that back, the margin was a step down sequentially than we would have expected. So just wondering if there’s any other costs in the 4Q at [Inwa Keegan] (ph), either temporary or permanent, structurally that we should think about. And then to follow up, I’ll just tag in so you can answer all at once. Marketing, obviously a decision that you guys made, but is there more of those decisions to be made in 2024?
I guess to pick your question, how do we think about the margin going forward from here or the cost structures kind of see marketing normalized next year or might you still think about kind of picking some spots where you see opportunity to grow the database or get some new customers in the door.
Lewis Fanger: Yes, well you had a couple things going on at the temporary here. You did have about a million less in gaming revenue, so the reverse flow through, I guess, it dings you on the other way, right? And that really was a function more of just a little bit of winter seasonality versus the third quarter. We had some actually, I’m looking at Adam as I say this, we actually had some catch-up accruals that benefited us in the third quarter as well. So it’s not quite an apples to apples between 3Q and 4Q. So, a little bit of color there.
John DeCree: Great. Thanks. That’s helpful.
Dan Lee: And seasonally, the fourth quarter is our weakest quarter in most markets. So that’s —
John DeCree: Yes, thanks.
Dan Lee: And did — sorry, did you have a second part to that? I — [multiple speakers] —
John DeCree: It was related to cost structure there in 2024. You highlighted specifically the elevated marketing, which we had talked about, as you noted, in 3Q. And I think even 2Q as well that you’d be doing that. But should we expect some more opportunistic kind of marketing dollars like that in 2024 or would the marketing budget start to normalize next year — this year, I should say?
Lewis Fanger: As of right now, and I look at Dan and Jeff as I say this, it does feel like we’re going to be a lot more in a normal mode, not in an excessive mode here, in 2024. I mean there are a few things — look, it’s challenging when you open any new casino because you have to go out and do general marketing, period. And it was doubly difficult in this case because we had zero people in the database the day that we opened. Today, we’re closing in on 65,000 people in the database, and so we can be a lot more targeted to those 65,000 people. But on top of that, we don’t have to go out those general messages anymore. We can also start to look at honing in on Zip codes, and everything else. So, it becomes a lot more of a science today than what we would have had a year ago.
John DeCree: Got it. Thanks, Lewis. And congratulations, guys, on getting Chamonix open in December.
Dan Lee: Yes, it’s kind of funny, everybody’s trying to figure out what the earnings are like this quarter or next quarter, and so are we, to be honest. We want it to be trending positively to get to that $50 million in each place, and $30 million from the traditional places. And whether we get there in three quarter or six quarters or eight quarters isn’t as important as the fact that we get there. And so, we’re focused on it, but we don’t sweat it. I sometimes think that the analyst community tends to be very much like, “What’s this quarter’s earnings?” And it’s like, “Well, let me try to get the steakhouse open, I’ll let you know,” right, because you do try to fix those things. But recognize, we just finished a year where we had $48 million of EBDIT, it’s the best year in the history of the company.
We had interest expense — cash interest expense before capitalized stuff of about $35 million. So, we comfortably paid our interest expense without having much, if anything, from Chamonix, it was only open the last four days of the year. And the property, here in Illinois, was ramping up. It didn’t do a whole lot of cash flow in the first-half of the year. And so, we constantly get this, “Well, aren’t you about to do some financing to do American Place?” It’s like, no, actually we’re not. Not even close. And the bond market is gradually getting better, but we don’t have a need for the money now. And it’s at least a year away. And the need that we have a year away is a lot less than people think because we’re producing really good free cash flow.
And that’s just going to augment itself throughout the year. How many stocks do you know that are trading at between five and three times free cash flow, and that that’s approximately our stock is, which is a little bit nuts. And I think people are just — they’re looking at the fact that we have to built the permanent American Place like it’s some big number, and it actually isn’t. And we’ve already spent quite a bit of the money needed to build the permanent American Place. So, anyway, that’s where we are. One more question.
Lewis Fanger: Yes, probably time for one last one.
Operator: Our final question is from [David Hargreaves] (ph) with Barclays. Please proceed.
Lewis Fanger: Hey, David.
Unidentified Analyst: Hi. Hello. So, I understand, if I heard correctly listening to the — sorry, I’m at the airport, so if I missed some stuff in the press release, I apologize. I think you opened the steakhouse in February, at Waukegan. And I’m interested in what the impact is there? And then just taking liquidity from another angle, I’m curious as to how much liquidity you expect to have left over, and what your plans might be for it?
Dan Lee: Well, that that’s easy, I mean we’re going to build up some cash here, and then supply cash to the permanent American Place that we could built two to three years from now. So, that’s your second question.
Lewis Fanger: Yes, we’re not out in the market for dividends or, quite frankly, our indenture doesn’t allow for meaningful stock buybacks or anything like that. So, it really is for us taking that cash, preserving it, and then investing it in the permament American Place for now.
Dan Lee: Yes. I mean have — I think Lewis mentioned, we have, I think, $23 million drawn under our credit facility. We’ll probably pay that down this year.
Lewis Fanger: $27 million, Dan.
Dan Lee: $27 million. And what was the first question?
