Massachusetts Commission Tells Boston to Talk to Wynn

The mayor of Boston, Martin J. Walsh (l.), is not doing the citizens of Charlestown any favors by refusing to talk to the casino operator who wants to build in neighboring Everett, the Massachusetts Gaming Commission said last week. It demanded that Walsh sit down with Wynn Resorts, or it may appoint someone to represent the city’s interests.

The Massachusetts Gaming Commission last week said that the city of Boston would be “abandoning” the interests of its Charlestown residents, who live closest to the proposed casino, if it doesn’t sit down and negotiate a surrounding community agreement with Wynn Resorts over the casino resort it wants to build in Everett.

If the city refuses, the commission may appoint someone to be the city’s advocate, said Commissioner James McHugh.

McHugh said, “The city’s basically, without telling us why, said they’re just abandoning that section of the city. We have some obligation to protect it. At the same time, we’ve got to maintain our neutrality.”

Boston Mayor Martin J. Walsh recently said that he would no longer participate in negotiations with Wynn, who offered the city $6 million in one-time payments and $2.6 million every year. That compares to the $30 million upfront payments and $18 million annually the city was able to negotiate with the Mohegan Sun, which wants to build a casino resort in Revere.

The mayor cited as his reason for abandoning negotiations the alleged refusal of Wynn to give the city some details about its casino resort.

The commission plans to hold its last hearings about the Boston metro license in mid-August and award a license in mid-September.

The two rivals for that license, Wynn and the Mohegan Sun, reported contrasting quarterly financial numbers last week.

Wynn Resorts reported 6 percent gains in revenue, up to $1.4 billion and a 41 percent increase in net income. This prompted CEO Steve Wynn to say that the company’s success is like that of the three little pigs. “We build houses of brick and our houses of brick take a little longer to build than the others, but they last,” he said.

The Sun, reported a 5.2 percent decline in net revenue, to $326 million and a 19 percent decline in net earnings, to $69 million.

CEO Mitchell Etess blamed a still slow economy that hasn’t yet recovered from the Great Recession. The company gets roughly the same number of customers, but they spend less, he said. The tribe’s plans for the Bay State are part of an overall expansion plan, he said, that includes Pennsylvania, New York and Washington.

Wynn said his casinos are often not as big as the competition, but that they successfully target high-end patrons who have lots of money to spend. This creates more revenue per customer. “We thrive on the intensity of the competition,” he declared. “We do better when the competition is better.”

Etess countered that his company’s casino will be a better fit for the Bay State, because the tribe knows the region and is planning cooperative ventures with local towns and merchants.

In a related development, the Mohegan Sun finally ended the 99-least with Northeast Realty in Palmer for 152 acres that the tribe had hoped would be the site of its casino. The tribe says it was unable to find a suitable developer for a non-gaming development on the land.

Northeast, which is involved in a lawsuit with the tribe over the tribe’s alleged lackadaisical efforts to sell voters on the Palmer casino last year, issued a statement that the Mohegans’ move, “confirms Northeast’s position that Mohegan Sun never intended to legitimately pursue non-gaming development” on the land.”

The tribe first acquired the lease six years ago, when its chances of selling a casino to the residents looked very sunny. Northeast asserts that the tribe was already in negotiations with Suffolk Downs to switch its focus from Palmer to Revere at the same time that it was supposed to be campaign vigorously in Palmer.

Southeastern Casino Zone

The Mashpee Wampanoag Tribe, which hopes to win the license to build a casino in Taunton, has hired a new and different architect to design its $500 million Project First Light: Steelman Partners LLP. Once the new design is completed it will be the third iteration for the project.

Steelman has designed some of the preeminent casinos in the world, including the Genting Group’s gargantuan Resorts World Las Vegas. The company has been described as “responsible for many of the most striking designs in the casino business.”

According to a statement released by the tribe’s Chairman Cedric Cromwell, “The tribe recently engaged Steelman Partners of Las Vegas, a firm that is known for its outstanding track record in the design of destination resorts. We have been impressed with their interior design concepts, and have asked for their recommendations in creating a ‘wow factor’ for Project First Light. With the environmental review process winding down, it is important that we start the next phase of design and examine ways to create a first-class environment for those who will be visiting our facilities in Taunton.”

The move is seen as positive by almost all industry observers. However, it does increase the tribe’s debt at $90 million. That includes the $8.6 million that the tribe recently borrowed from its partner Genting, and which includes $1.6 million for Steelman.

However, a member of the tribe interviewed by Cape Cod Online, sounded disgruntled. “We’re paying again for new designs and going deeper into debt? Why?”

Although many are skeptical that the Taunton casino will ever be built, some undercurrents suggest that it might happen sooner rather than later.

At least that’s the view of the Taunton firm B&D Construction, which has announced plans to move its corporate headquarters to Raynham, a short distance from where the tribe hopes to build. The move could come within a few months.

According to the firm’s owner, Dan DaRosa, interviewed by the Taunton Gazette, said, “Why we are doing that is because we understand that the tribe will be coming soon. So we are making provisions to move our operations to Raynham. It’s only an assumption. What we are getting fed from them is that it will be sometime during the fall of 2014. That’s right around the corner. That’s why I have to act on these permits, because if they come, I need to be ready to go.”

The exact location for the casino resort has not been specified. According to the tribe it holds options on several parcels, all of them near the Liberty and Union Industrial Park in Taunton. Cromwell commented, “With the tribe now in the final stages of the environmental review of its land into trust application, it is working with the city and the TDC (Taunton Development Corporation) to help affected businesses explore alternative locations in Taunton. We still expect to break ground before the end of the year, and we should have more details on the schedule once the review process is finished.”  Cromwell has said previously that he expects a casino to open in 2016.

The one remaining stumbling block to the tribe is the pending decision by the U.S. Bureau of Indian Affairs as to whether the tribe can put land into trust in the city. Opponents are skeptical that the tribe can do so without running afoul of the 2009 Carcieri v. Salazar Supreme Court ruling that said that tribes recognized after 1934 can’t put land into trust. The tribe achieved recognition seven years ago.

The U.S. Department of the Interior earlier this year issued an opinion that tribes “under federal jurisdiction” could still put land into trust, even if they didn’t obtain recognition until later.

Taunton Mayor Thomas Hoye remains optimistic that the casino resort will be built. He told the Gazette, although he is also worried about whether the initiative (Question 3) that seeks to repeal the 2011 gaming expansion law will pass in Novembe
r. “We are just not sure when that will be at this point. We are hopeful that that would be soon, but time will tell. Unfortunately, this decision is out of our hands. It also is depending on what happens with Question 3, which may impact what is actually built there. There are a lot of unanswered questions as we move into fall elections,” he said.