HARRISBURG, Pa.
Backers of a long-struggling casino project in Philadelphia received a few more weeks from state gambling regulators on Thursday to show the regulators that they can get the financing and other crucial elements to get it built.
The Pennsylvania
However, strong political and neighborhood opposition have delayed the casino, while its original financing collapsed during the tumultuous economy and financial problems for the Mashantucket Pequot tribe, a key investor that operates the huge Foxwoods Casino in Connecticut.
"Frankly, the financial bailout took much less time than this has taken," board member Ken Trujillo told project lawyers during the meeting. "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."
Last month, the Foxwoods group said the world's biggest casino operator, privately held Harrah's Entertainment Inc., was willing to invest in and manage the property, which could become the second casino in Philadelphia.
Harrah's also owns the casino and racetrack in Chester, about 20 miles south of Philadelphia, and SugarHouse Casino opened in September, a mile or so up the river.
Trujillo and the six other board members tabled a license revocation motion until the board's next meeting, on Dec. 16. The Foxwoods group now has until Dec. 10 to submit paperwork to the gaming board's enforcement office, which is seeking the revocation.
During the public meeting occasionally interrupted by hecklers from Casino Free Philadelphia, project lawyers Fred Jacoby and Bill Downey appealed to the gaming board for more time.
Three key documents -- a partnership purchase agreement, a limited partnership agreement and a management agreement -- are nearing completion, they said.
"They are, I guess, effectively the holy trinity of this deal and we remain convinced that we can get this done," Downey said. "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 now being proposed by the Foxwoods group is a lot smaller than the one originally promised to the gaming board in 2006, and board members would have to approve the changes, as well as changes to the financial and ownership arrangements.
Foxwoods is one of three casino projects in Pennsylvania that ran into serious problems, and the last of the 11 original licensees from 2006 to open its doors. Foxwoods has faced daily fines of $2,000 -- more than $700,000 to date -- since failing to meet a Dec. 1, 2009, deadline imposed by the gaming board to provide information about its financing, design and construction.
Originally, the partnership planned to open with 3,000 slot machines in late 2008.
But the Philadelphia City Council opposed the Foxwoods location and tried to stall construction by withholding approval of necessary zoning changes. When Foxwoods flirted with changing the location off the waterfront and into downtown Philadelphia, the gaming board ordered it back to its original property and last year began threatening to yank the license.
As the Mashantucket Pequot tribe's financial woes mounted, the group, which includes a group of influential Philadelphia-area businessmen, began scaling back plans for the casino and searching for another major investor.
It found one: international casino impresario Steve Wynn, who mysteriously pulled out in April, less than two months after pledging to rescue the project.
If the gaming board revokes the Foxwoods license, it could then begin accepting new applications for it. However, Jacoby warned Thursday that a costly and time-consuming lawsuit is sure to come first.
"We believe that that's Armageddon," Jacoby said. "All that does is throw this whole thing ... two or three years of litigation."
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