Hall of Fame Resort & Entertainment Receives Termination Notice for Waterpark Ground Lease

Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) faced a significant development as its subsidiary, HOF Village Waterpark, LLC, received a notice of termination on October 26, 2024. The termination, issued by HFAKOH001 LLC, the landlord, was due to an event of default under the waterpark ground lease agreement.

This termination stems from a payment default under the Waterpark Ground Lease, which had previously been subject to forbearance by the landlord until October 25, 2024. As of October 31, 2024, the payment default had not been rectified, resulting in an outstanding principal balance of roughly $2.6 million in unpaid base rent under the lease.

Apart from the unpaid rent, additional damages outlined in the Waterpark Ground Lease include the recovery of unpaid rent for the remaining lease term exceeding the fair market rental value, alongside damages such as attorneys’ fees and court costs incurred due to the lease breach.

The termination notice gives the landlord the right to pursue all available remedies under the Waterpark Ground Lease and related agreements at their discretion. HOF Village Newco, LLC, a guarantor of the lease obligations, pledged security interests in various assets, including the Tom Benson Hall of Fame Stadium, a 20% interest in the ForeverLawn Sports Complex, and real estate adjacent to Hall of Fame Village.

The potential exercise of remedies by the landlord could have adverse effects on the liquidity, financial position, and operational results of Hall of Fame Resort & Entertainment Company. The company’s existing cash reserves and expected cash flows may not be adequate to meet its ongoing operational and liquidity requirements.

To address the current situation, the company’s special committee of independent directors is engaged in discussions with IRG Canton Village Member, LLC, regarding a non-binding proposal to privatize the company.

A cautionary note concerning forward-looking statements was included in the report, highlighting potential risks and uncertainties that could impact actual outcomes. These factors include the company’s ability to secure additional liquidity, actions by the landlord regarding the default under the Waterpark Ground Lease, ongoing negotiations related to the privatization proposal, and general economic conditions affecting the resort and entertainment industry.

The details provided above are based on a copy of the agreement filed with the U.S. Securities and Exchange Commission on November 9, 2022, which is legally binding.

This Form 8-K filing did not include any additional financial statements beyond the cover page interactive data file.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Hall of Fame Resort & Entertainment’s 8K filing here.

About Hall of Fame Resort & Entertainment

Hall of Fame Resort & Entertainment Company, a resort and entertainment company, doing business as the Pro Football Hall of Fame. It owns the DoubleTree by Hilton located in downtown Canton, and the Hall of Fame Village, which is a multi-use sports, entertainment, and media destination. The company is headquartered in Canton, Ohio.