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Foxwoods Given extended Deadline for Casino Plans

Posted on November 20th, 2010

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Philadelphia, being the largest city in the state of Pennsylvania, is an obvious choice for a location of a casino. To this end, a license to operate just such a casino has been made available. However, backers of the casino project in Philadelphia have been struggling for years, causing the plans to not even be close to being half-realized. Thus, on Thursday, gambling regulators of the state gave them only a few more weeks to give the body enough proof that they can still secure financing and other important factors to make the casino real.

The Gaming Control Board of Pennsylvania unanimously voted for the group that currently has the license first issued in 2006 to be given an extension. The additional time, according to the board, should be enough for the firm to finalize details in building the Foxwoods Philadelphia Casino to be located along the city’s waterfront in the Delaware River. The building of the casino has, since 2006, been opposed by local politicians and the area’s residents. To make matters worse, the financing plan for the project collapsed in light of the economic downturn. The economy also dealt a big blow to the Mashantucket Pequot tribe, a key investor in the project. The tribe also operates the Foxwoods Casino in Connecticut.

Board member Ken Trujillo, in a meeting with lawyers of the project, said, “Frankly, the financial bailout took much less time than this has taken. General Motors today, I think, has gone public at $30 a share after having been bailed out. And so multitrillion-dollar complex transactions have taken place and companies have already been resuscitated in the time that this deal has been out there.” In October, the Foxwoods group claimed that Harrah’s Entertainment Inc., the world’s biggest operator of casinos, has expressed intentions of investing and managing the property. The casino, once done, is poised to become only the second casino in the state. As of the moment, Harrah’s is also responsible for owning the gambling facility and racetrack in Chester, a town south of Philadelphia. The first casino in the state, SugarHouse Casino which only opened in September, is also under the helm of Harrah’s.

The seven members of the board, including Trujillo, have already forwarded a motion to revoke the license to be discussed in the next meeting of the board, on Dec. 16. The Foxwoods group will have from now until only the 10th of next month to submit documents to the enforcement office of the board. The enforcement office is the body in the board seeking the license revocation. The meeting between the Foxwoods lawyers and the board was open to the public, and it was occasionally disrupted by heckling coming from the gallery, filled with members of Casino Free Philadelphia. The heckling was especially loud when the lawyers of the project, Fred Jacoby and Bill Downey appealed for more time from the gaming board. They claimed that three important documents are close to being completed – a partnership purchase agreement, a limited partnership agreement and a management agreement.

Downey claimed that these documents are the most pertinent requirements for the deal between Foxwoods and Harrah’s to be finalized. He and Jacoby are confidents that they will be done with the requirements on time. He added, “We’ve got an awful lot of businesspeople and an awful lot of lawyers exerting significant effort to address the remaining issues.” The casino project that the Foxwoods group is currently proposing is a lot more modest compared to its original plan that it presented to the gaming board in 2006. After submitting the most pertinent documents, the firm would also need to re-present the changes to the board members, who would then have to approve them. The modifications with regard to financial and ownership arrangements would also need to be approved by the board.

When Foxwoods failed to meet a deadline on Dec. 1, 2009, given by the gaming board for the submission of information about the project’s details, it had been slapped a daily fine of $2,000. The fine has amounted to $700,000 as of press time. Prior to Harrah’s, the casino secured financial partnership with the Wynn gaming group, which backed out only two months after pledging support to the project.