Foxwoods may sell Pa. casino stake
Analyst sees Wynn buying out tribe
By WILLIAM SOKOLIC
For The Norwich Bulletin
Posted Mar 02, 2010 @ 12:00 AM
Last week, Stephen Wynn’s golden name surfaced as the savior of the troubled Foxwoods project in Philadelphia. But it might cost Foxwoods its role.
Wynn Resorts Ltd., announced on Feb. 23 that it had entered into a letter of intent with Philadelphia Entertainment and Development Partners LP providing that an affiliate of Wynn will become the manager and managing general partner in the casino project slated for the Philadelphia waterfront.
The agreement is subject to the satisfaction of certain conditions, including the approval of the Pennsylvania Gaming Control Board.
Wynn’s winning casino properties include the Golden Nugget in Atlantic City, N.J., and the Mirage, Bellagio, Wynn and Encore in Las Vegas.
“I am thrilled to be returning to the East Coast and, in particular, to the city in which I was privileged to have gained my college education. Philadelphia has always felt like home to me,” said Wynn, chairman and CEO of Wynn Resorts.
So far, Wynn has remained mum on what happens to Foxwoods’ 30 percent investment should he be anointed a majority stake.
“I am hearing he is going to buy Foxwoods out,” said analyst Roger Gros, of Global Gaming Business Magazine. “Wynn does not play well with other people. In terms of management and marketing, he needs to operate alone.
So Foxwoods has to be taken out one way or the other.”$30 million investmentNegotiations continue over the dollar amount, Gros said. Foxwoods will want some sort of profit on its $30 million investment, he said.
Outside of a prepared statement, Foxwoods has also remained mum. Foxwoods Development Co., an arm of the Mashantucket Pequot Gaming Enterprise, declined repeated requests for comment.
The tribe declined to speak beyond this statement:“The Mashantucket Pequot Tribal Nation and the Foxwoods Development Co. are pleased to welcome Wynn Resorts to the Philadelphia waterfront casino project.
We believe this is a win-win outcome for Foxwoods Philadelphia, as well as for our local partners, the city of Philadelphia and state of Pennsylvania,” Tribal Council Chairman Rodney Butler said.
No overnight stayWynn outlined plans for Philadelphia to gaming analysts last Thursday, and on Wednesday will go in front of the gaming board to pitch his proposal again. The casino would not include a hotel, nor all the extravagant extras associated with the kind of destination resort Wynn is famous for.
“This is a feel-good opportunity,” he told the analysts. “It won’t look like slots in a box. It will be the cutest casino, with a Wynn signature presentation,” he said.
The finished product will be extraordinarily user-friendly, he added. In addition to the one-story casino itself, it will feature a handful of restaurants: Vietnamese, Italian and a steakhouse, Wynn said.
A three-story parking garage with direct entrances to the casino will allow patrons to zip in for three hours, gamble, grab a bite to eat and zip out again.
Of course, Wynn still has to win over communities upset by the thought of a casino in their midst, the same situation the existing partnership has grappled with for years.
And the fate of Foxwoods’ involvement needs to be resolved.License in jeopardyThe hearing Wednesday could shed some light on both these questions. The focus will be on the lack of documentation submitted to the gaming board toward having the casino ready next year as agreed.
The project owners are already subject to a $2,000 a day fine since Dec. 1 for the lack of paperwork. The hearing will decide why the board should not take further action, which could include revoking the license.
The legislation to permit table games includes a provision to petition the board for an extension if Foxwoods could show good cause, board spokesman Richard McGarvey said. That petition has not been made as yet, he said.Depending on testimony, the board can vote to lift some or all of the fine, he said.
As for Foxwoods’ future, Wynn’s power lies in walking away if he doesn’t get what he wants. If he does, it opens the real risk the gaming control board will lift the Foxwoods license, Gros said. That alone should pressure the Philadelphia investors to convince the tribe to step away.
Copyright 2010 Norwich Bulletin.