Foxwoods Philly project loses license
The project formerly known as Foxwoods Casino Philadelphia took a major hit Thursday when the Pennsylvania Gaming Control Board yanked the $50 million license it granted the Mashantucket Pequot Tribe and other investors in the plan four years ago.
Meeting in Harrisburg, board members voted 6-1 to revoke the license, a move likely to trigger a protracted legal battle.
Philadelphia Entertainment and Development Partners, or PEDP, the project's original investment group, and Caesars Entertainment, the huge casino company that in recent months had agreed to shore up the project's financing, had filed documents with the board last week in hopes of staving off the revocation.
The board found that the submissions failed to satisfy the conditions it had set down.
The tribe's Foxwoods Development Co. expressed its disappointment with the board's vote in a statement issued late Thursday afternoon:
"Philadelphia Entertainment and Development Partners, of which Foxwoods Development Company is a 30 percent partner, have worked diligently to negotiate a development agreement beneficial to all parties involved, including the city of Philadelphia. We believe the Caesars' transaction would have provided the most advantageous outcome, creating jobs and providing much needed tax revenues for the local community.
"We are reviewing this decision and considering our options at this time."
Fred Jacoby, a lawyer for PEDP, told The Associated Press that the board acted arbitrarily and overlooked the importance of Caesars' involvement.
"I was shocked, I really didn't expect to see revocation," he said.
Doug Harbach, a board spokesman, said the board did not outline the reasons for its vote and that he could not comment on the board's rationale until the panel issued an "adjudication," or written judgment.
In April, the board's investigative division urged the board to revoke the license for the Foxwoods casino, which was to be built on the Delaware River waterfront in South Philadelphia. The division questioned whether the investors would be able to open an interim facility by May 2011, as required, and noted that financing for the project had yet to be secured. PEDP had sought an extension of the deadline until Dec. 31, 2012.
Last month, the investors submitted new drawings depicting a Horseshoe casino, one of the brands owned by Harrah's Entertainment, which has since changed its name to Caesars Entertainment. Caesars was to help finance the $275 million project and manage the casino, a role Foxwoods Development was at one time expected to play.
"Foxwoods' interest in this would have been very small," Harbach said. "They were no longer going to be the manager."
Indeed, the Mashantuckets' financial woes - the tribe is restructuring more than $2 billion in debt - prompted investors to seek another partner late last year. Casino mogul Steven Wynn appeared to rescue the project in the spring when he signed on as a majority partner and general manager. But he abruptly withdrew from the deal in April, at which point the gaming board's investigative division called for the board to pull the license.
Harbach said it wasn't immediately clear how the board would go about "re-awarding" the license. Also uncertain, he said, is whether the $50 million licensing fee paid by the investment group is refundable.
"Some of our counsel believe it is not," he said. "We fully expect PEDP to argue that it is."
Thursday's board meeting drew "a lot of interested parties," Harbach said, including residents who have long opposed casinos for Philadelphia, one of which, SugarHouse, opened in September.
"I think many in the audience may have been surprised (by the board's action)," he said.
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