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Mohegan Sun is terminating its lease of the Palmer, Mass., property where it had once hoped to develop a $1 billion resort casino and water park.
In a statement issued late Monday afternoon, the casino confirmed that it was relinquishing control of the 152-acre site owned by Northeast Realty Associates.
Mohegan Sun's hopes for a western Massachusetts casino were dashed last November when Palmer voters narrowly rejected the plan in a referendum vote. Almost immediately, Mohegan Sun turned its attention to the Greater Boston area and a casino site owned by the Suffolk Downs thoroughbred track. Northeast Realty filed a lawsuit, alleging the casino had breached an "exclusivity agreement."
Mohegan Sun denied the allegation and later filed a countersuit.
In February, Mohegan Sun hired a consulting firm, CBRE/Grossman Retail Advisors LLC, to investigate nongaming development options for the Palmer site.
"As part of the process, (the consultants) interviewed retailers, supermarket and entertainment users to assess the level of market interest in the site," the casino said in a statement Monday. "Based on that analysis and other important factors - including the physical challenges associated with the site and the terms of an agreement that had only contemplated gaming uses - we have made the determination that the most prudent course of action at this time is to terminate our lease on the property."
Northeast Realty said the lease termination would have no bearing on its lawsuit against Mohegan Sun.
"The termination of the lease comes as no surprise, and confirms Northeast's position that Mohegan Sun never intended to legitimately pursue non-gaming development at the Palmer site, as they stated publicly after the November 2013 referendum," Northeast said in a statement.
Mohegan Sun signed a 99-year lease option on the Palmer site in 2008.