Monday, April 5, 2010

Foxwoods Philadelphia Group's Request To Keep Finances Private Runs Into Public's Right To Know

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This installment of The Tribes In The Media is a Philadelphia Inquirer article on the status of the Foxwoods Philadelphia project and says that financial information (including that of the Mashantucket Pequot Tribe) could be made public as early as Wednesday as the group seeks to potentially sell control of the project to Wynn Resorts.

Wynn deal privacy sought
Investors say proprietary information is at stake.
By Jennifer Lin
Inquirer Staff Writer
April 2, 2010

The Foxwoods Casino partners who are ceding control of the project to Wynn Resorts of Las Vegas do not want the finances and other conditions of the deal made public.
In a motion filed Thursday with the Pennsylvania Gaming Control Board, the original investor group - Philadelphia Entertainment and Development Partners (PEDP) - said it anticipated entering into a purchase agreement with Wynn/PEDP L.P., a newly formed affiliate of the Nevada gaming company run by Steve Wynn.

That agreement contains "confidential, proprietary information, as well as trade secrets related to the business activities and financial affairs of Wynn/PEDP," according to the motion.

It also said the agreement had credit, commercial, and financial information "which, if disclosed, would cause substantial harm to the competitive position" of the partnership.

Doug Harbach, a spokesman for the state gaming board, said the purchase agreement would remain confidential until the board takes up the matter. Its next meeting is scheduled for Wednesday.

On March 3, Wynn, chairman of Wynn Resorts, told the gaming board about his company's plan to take over the faltering casino, to be built on Columbus Boulevard in South Philadelphia.

At the time, Wynn said the transaction would cost about $600 million, with Wynn Resorts most likely putting up $250 million and borrowing the rest. Of the cost, about $127 million is existing debt incurred in the acquisition of the waterfront property and a $50 million gaming license.

Under orders from the gaming board, the Foxwoods group had to submit "definitive financing" documents on Wednesday. Sketches of the proposed project are to be filed by April 26, with a public hearing scheduled for April 29.

"I don't see any good reason why the board or Wynn would want to deprive the public of information that I think is relevant to determining whether the new ownership structure is going to be suitable for this project," said Adam Cutler, a lawyer with the Public Interest Law Center of Philadelphia.

Cutler said that without details, it would be impossible to gauge the progress of the Wynn deal.

"It is relevant for the public to know whether they have a firm deal, not just a commitment or a memorandum of understanding," he said.

Maureen Garrity, a spokeswoman for Wynn Resorts, said that some details would be "made public as the process continues," but that the company wanted to keep "proprietary elements" confidential.

The original partners, who won a casino license in 2006, include the Mashantucket Pequot Tribe of Connecticut and 14 other investors.

Gary Armentrout, president of Foxwoods Development Co., the tribe's development arm, said he was not prepared to comment on the purchase agreement.

Under the original deal, a group representing the charitable interests of developer Ron Rubin, New Jersey entrepreneur Lewis Katz, and Comcast-Spectacor chairman Ed Snider had the largest stake in the Foxwoods project.

But Cutler said he wondered what will happen to that charitable component once Wynn Resorts takes over. The fact that 42 percent of the casino's profits were committed to charities in Philadelphia was "a major selling point" when the Foxwoods group was vying for a license, Cutler said.

"What is Steve Wynn going to do about that?" he asked. "We don't know."