Philly partners with Foxwoods seek to recover licensing fee

The partnership that couldn't hang on to the right to develop Foxwoods Casino Philadelphia wants its $50 million licensing fee back.

In a claim filed late last week in U.S. Bankruptcy Court for the Eastern District of Pennsylvania, Philadelphia Entertainment and Development Partners, or PEDP, claims the state of Pennsylvania has "improperly" refused to return the fee.

The claim lists the state and its Department of Revenue as defendants.

Earlier this year, PEDP petitioned the court for Chapter 11 bankruptcy protection, listing debts totaling more than $23.6 million.

In the complaint filed last week, PEDP claims it invested more than $160 million in the casino project prior to the Pennsylvania Gaming Control Board's revocation of the casino license. At the time, PEDP consisted of a group of Philadelphia-area investors and the Mashantucket Pequot Tribe's Foxwoods Development Co., which held a 30 percent stake.

According to the complaint, the gaming board awarded PEDP one of the two slot-machine licenses then available on Dec. 20, 2006.

On Oct. 17, 2007, PEDP paid the $50 million licensing fee "subject to an express reservation of its rights to seek 'the repayment of its License fee, and interest thereon,' if 'extraordinary delays or difficulties occur or future circumstances develop that cause its License or the project to be jeopardized or extraordinarily harmed,'" the complaint says.

The gaming board revoked PEDP's license in December 2010 following a series of missed deadlines for the submission of detailed plans for the casino project and financial information. The board subsequently sought a new round of bids for the license.

A partnership whose members include Mohegan Sun is among five applicants still in the running for the license.

PEDP claims the state is "unjustly enriching" itself by keeping PEDP's $50 million fee while collecting another fee from whichever applicant is ultimately awarded the license.

Sugar House Casino, whose developers won the second Philadelphia license back in 2006, opened in 2010.


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