At a meeting today of the Pennsylvania Gaming Control Board, the Foxwoods Philadelphia investors received an extension until the end of March to submit a solid plan to finance the project. This installment of The Tribes In The Media is an update received by the Patriot-News of Pennsylvania and Bloomberg News article below that provides more specifics on Wynn's proposal.
Foxwoods Casino project gets a reprieve from Pennsylvania Gaming Board
March 03, 2010
The Pennsylvania Gaming Control Board gave the stalled Foxwoods Casino Philadelphia a reprieve from a takeover by Steve Wynn's Las Vegas-based company. Wynn made his case in Harrisburg today and met opposition from protestors who spoke up at this morning's meeting.
Financial sanctions remain in effect for Foxwoods, but the gaming board gave the group until March 31 to submit a definitive plan for financing the construction of the casino and a deadline of April 26 to submit architectural drawings of the proposed casino.
The Foxwoods project gained one of two licenses for slots parlors in Philadelphia in 2006, but the sour economy, financial problems and community objections have all combined to delay the project. Last month, the gaming board said it would consider revoking the license of the Foxwoods casino.
Wynn has a deal with Foxwoods investors to take over the Philadelphia project, but the agreement must be approved by the gaming board.
Another Philadelphia slots parlor, the Sugarhouse Casino, is under construction and slated to open this year. But more than five years after the state's slots law was approved by Gov. Ed Rendell and lawmakers, Pennsylvania's largest city still hasn't opened a casino.
The fate of the casino projects has implications well beyond the City of Brotherly Love. Some money from the state's slots parlors' revenue is earmarked for property tax relief. Getting the Philadelphia casinos online would potentially offer more tax relief for homeowners.
Wynn Resorts to Provide $250 Million for Philadelphia Casino
March 3, 2010,
March 3 (Bloomberg) -- Wynn Resorts Ltd., the casino company founded by billionaire Steve Wynn, will provide about $250 million for the riverfront project it’s seeking to take over in Philadelphia.
The funds represent approximately 40 percent of the estimated $600 million cost, based on “current thinking,” Chairman and Chief Executive Officer Wynn told the Pennsylvania Gaming Control Board today. Wynn plans to manage the casino and own 51 percent under an accord with the current license holders.
The operator of the Wynn and Encore resorts in Las Vegas and Macau, China, seeks a presence on the U.S. east coast after dropping out of bidding to redevelop the Aqueduct Racetrack in Queens, New York. Pennsylvania is letting slots-only casinos add table games this year and has licensed two Philadelphia casinos. Wynn is joining original investors who will now own 49 percent, said Fred Jacoby, an attorney representing the developers.
“Everyone gets cut in half, a little more than half,” Wynn said at the hearing. The agreement includes options for Wynn Resorts to buy out the partners, he said.
The Las Vegas-based company can provide funding and a new design for the delayed casino, and help build it “rapidly,” Wynn, 68, told regulators at the public hearing in Harrisburg.
The testimony was interrupted by protesters opposed to casinos in Philadelphia who were removed from the hearing. The gaming control board must approve changes to the proposed project, including Wynn’s involvement, according to Chairman Gregory C. Fajt.
The proposed site, on about 15 acres along the Delaware River in Pennsylvania’s most populated city, will include a three-story structure with 3,000 slot machines, table games and a parking garage, Wynn said on a Feb. 25 conference call. It will feature Italian, steak and Vietnamese dining, and won’t include a hotel.
“It’s going to be the cutest casino that you’ve ever seen,” Wynn said last week. “It’s not going to look like slots in a box.”
Wynn fell 12 cents to $66.75 at 2:21 p.m. New York time in Nasdaq Stock Market trading. The stock had gained 15 percent this year before today.
Wynn Resorts said on Feb. 23 it signed a letter of intent with Philadelphia Entertainment and Development Partners to invest in and manage a casino in Philadelphia, joining investors who were awarded a license by state regulators in December 2006.
The partnership had controlled 70 percent of the proposed project and Foxwoods Development Co., a unit of the Mashantucket Western Pequot Tribal Nation, held 30 percent, and was supposed to design and manage the casino.
The Mashantucket tribe, owners of Foxwoods Resort Casino in Connecticut, defaulted on some of its $2.5 billion debt last year. It has a forbearance agreement with lenders through April 30 to restructure borrowings.
The tribe will become a 14 percent “passive minority investor,” Wynn said.
The Pennsylvania Gaming Control Board has fined the original developers $2,000 a day since Dec. 1 for failing to submit building plans for their proposed Foxwoods casino. Today’s hearing was scheduled to consider further penalties including potentially revoking the casino license, according to Richard McGarvey, a spokesman for the regulator.
The second Philadelphia license went to SugarHouse Casino, a $355 million property on the riverfront scheduled to open its first phase in August.
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