XML 24 R9.htm IDEA: XBRL DOCUMENT v3.19.2
Business
6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BUSINESS BUSINESS

Organization. MGM Growth Properties LLC (“MGP” or the “Company”) is a limited liability company that was organized in Delaware in October 2015. MGP conducts its operations through MGM Growth Properties Operating Partnership LP (the “Operating Partnership”), a Delaware limited partnership that was formed in January 2016 and acquired by MGP in April 2016. The Company elected to be treated as a real estate investment trust (“REIT”) commencing with its taxable year ended December 31, 2016.

MGP is a publicly traded REIT primarily engaged through its investment in the Operating Partnership in the real property business, which consists of owning, acquiring and leasing large-scale destination entertainment and leisure properties, whose tenants generally offer casino gaming, hotel, convention, dining, entertainment and retail. A wholly owned subsidiary of the Operating Partnership (the “Landlord”) leases all of its real estate properties to a wholly owned subsidiary (the “Tenant”) of MGM Resorts International (“MGM”) under a master lease agreement (the “Master Lease”).

    As of June 30, 2019, there were approximately 292.3 million Operating Partnership units outstanding in the Operating Partnership, of which MGM owned approximately 199.7 million, or 68.3%, and MGP owned the remaining 31.7%. MGM’s Operating Partnership units are exchangeable for Class A shares of MGP on a one-to-one basis, or cash at the fair value of a Class A share. MGP’s independent conflicts committee determines the settlement method for any such exchanges. MGM’s indirect ownership of these Operating Partnership units is recognized as a noncontrolling interest in MGP’s financial statements. A wholly owned subsidiary of MGP is the general partner of the Operating Partnership and operates and controls all of its business affairs. As a result, MGP consolidates the Operating Partnership and its subsidiaries. MGM also has ownership of MGP’s outstanding Class B share. The Class B share is a non-economic interest in MGP which does not provide its holder any rights to profits or losses or any rights to receive distributions from the operations of MGP or upon liquidation or winding up of MGP but which represents a majority of the voting power of MGP’s shares. As a result, MGP continues to be controlled by MGM through its majority voting rights and is consolidated by MGM.
    
Empire City Transaction

On January 29, 2019, the Company acquired the developed real property associated with Empire City Casino (“Empire City”) from MGM upon its acquisition of Empire City (“Empire City Transaction”) and Empire City was added to the existing Master Lease between the Landlord and Tenant. Refer to Note 3 for additional details on the Empire City Transaction and Note 5 for further discussion on the Master Lease.

Park MGM Transaction

On March 7, 2019, the Company completed the transaction relating to renovations undertaken by MGM Resorts regarding the Park MGM and NoMad Las Vegas property (the “Park MGM Transaction”). Refer to Note 5 for further discussion on the Master Lease.

Northfield OpCo Transaction

On April 1, 2019, the Company’s taxable REIT subsidiary (“TRS”) liquidated. Concurrently, a subsidiary of MGM acquired the membership interests of Northfield Park Associates, LLC (“Northfield”), the entity that formerly owned the real estate assets and operations of the Hard Rock Rocksino Northfield Park in Northfield, Ohio, and the Company retained the real estate assets. Subsequently, MGM rebranded the operations it acquired (“Northfield OpCo”) to MGM Northfield Park, which was added to the existing Master Lease between the Landlord and Tenant. Refer to Note 3 for additional details on the Northfield OpCo Transaction and Note 5 for further discussion on the Master Lease.