Foxwoods denied deadline extension

Jan. 27

By Kellie Patrick Gates
For PlanPhilly

The Pennsylvania Gaming Control Board Wednesday denied Philadelphia Entertainment and Development Partners’ request for more time to file site plans and will on March 3 consider revoking the casino’s license.

Foxwoods was supposed to have the site plans to the board on Dec. 1 as one of the conditions of a two-year extension to get the casino open. Foxwoods asked the board to allow them to have until March 1 to produce that information, the date at which financing reports are also due.

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Instead, the board levied a fine of $2,000 for each day beyond Dec. 1, 2009 it takes Foxwoods to get the information to the board. That’s $116,000 and counting.  The board also has called a March 3 hearing at which they will consider other sanctions, up to and including revoking Foxwood’s license.

Foxwoods attorney Fred Jacoby, who had pleaded with the board for patience, had no comment on the ruling. “I have to think it through,” he said on his way out of the building.

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Jacoby had testified that Foxwoods could not meet the deadline because table games were still being debated by the legislature (they have since been legalized in Pennsylvania) and an agreement with a new investor had not been reached. Investors did not want to commit until they knew whether table games would be part of the project, he said. And they could not provide drawings or site plans until an agreement is reached with the investor they are wooing, he said, because that investor wants a say in the design.

Foxwoods expected to reach an agreement with their prospective new partner this week, he said. He would then bring the multi-page document to the board’s office of enforcement council for review before Foxwoods finalized the agreement.

Despite requests from deputy enforcement council Dale Miller to name the investor, Jacoby would not, saying confidentiality was promised. He said the investor has considerable casino experience, though, and would create a 200,000-square-foot facility with about 2,700 slots and 80 to 100 tables.

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Jacoby thanked the board for the patience with which it has already treated Foxwoods. He acknowledged that critics were calling for the board to quash the casino, but told the board if they could just bear with his client a little longer, all the time would be worthwhile.

“The investor we are working with has a great vision, and it’s not just a slots parlor,” he said. “We’re very excited. We never contemplated the nature of the project we are working on today. We just ask you to work  with us a little longer.”

The board’s own enforcement arm, the Bureau of Investigation and Enforcement, had already recommended in filed documents that Foxwoods’ request for more time to file the site plans be denied. At Wednesday’s hearing, Chief Enforcement Council Cyrus Petri and Deputy Enforcement Council Dale Miller repeatedly criticized Foxwoods for a lack of progress.

“Based on what you have testified today, it seems that basically we can come to several conclusions,” Pitre said. “That there’s no financing. That you’re talking to someone in the industry about investing. That we can contemplate a change of ownership based on the fact that this person will have significant say in what is done and how it’s done.” Pitre said that the board has already licensed Foxwoods and endorsed its location and the type of facility it had already proposed. “Basically, you’re just telling this board today that all of that is up in the air, and we don’t know for sure what’s going to be coming down the pike,” he said.

Jacoby grew frustrated, and said that he could not understand how the BIE representatives could say no progress has been made, when an agreement with a new investor was near, a builder had been brought into discussion, and Foxwoods and the city had just recently met with the special master appointed by the State Supreme Court. He also pointed out that Foxwoods had met the other monthly progress report deadlines imposed by the PGCB as a condition of the license extension, and that these documents have outlined Foxwoods’ forward movement.

Pitre turned over all those previous filings to the board as evidence. (A side note: Attorneys representing two community activist organizations have been trying to make these documents public. Part of the reasoning the PGCB gave for not turning them over is that they were not filed with the board itself, but with the BIE. The board also said the documents were private because they contain information deemed private under state gaming law, and because they are part of  a non-criminal investigation. The state open records office recently upheld the PGCB’s decision. When the documents were submitted to the board yesterday, Jacoby quickly asked the board to keep them out of the public record. Pitre agreed that was appropriate.)

Jacoby asked the board to consider delaying a decision until its February meeting, because by then, he would be able to be more specific.

Under pressure from the Board, Jacoby revealed that Keating Building Corp., would be constructing the casino. Board members said they had faith in Keating, who is constructing SugarHouse and also built Rivers Casino in Pittsburgh. Some said they wanted Keating representatives to accompany Foxwoods the next time it was before the board.

The news about Keating seemed to be the only thing that went into the plus column for Foxwoods Wednesday. The Board members who spoke all expressed frustration with what their office of enforcement council called a lack of progress. Several also said they were simply not confident that granting the extension would do any good.

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Board member Kenneth McCabe said, “I have no confidence that if we grant the extension … you’re not going to come in asking for more time.”

Board members said that neither the table game debate nor the negotiations with a new investor should have prevented Foxwoods from meeting the deadline.

Kenneth Trujillo, who was an investor with Riverwalk Casino, which competed unsuccessfully for a license when Foxwoods was approved, said Foxwoods could have presented a “Plan A” by the deadline while noting a “Plan B” might be necessary under some circumstances. (Trujillo talked about his past casino interest early in the proceeding. He said he didn’t think it presented any conflict, and he didn’t plan to recuse himself. He asked the Foxwoods’ team how they felt about him taking part, and they said it was fine with them.)

Speaking of Plan B, Jacoby said if the financing deal were to fall through, Foxwoods would move forward with a slots-only casino in a temporary facility.

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After the meeting, Chief Enforcement Council Cyrus Pitre said he was “very happy with the decision.” His office told the board it is already justified to yank the license, and recommended at least a fine of $1,000 per day.

His office’s next recommendation “depends on what happens between now and the 3rd.” In other words, whether Foxwoods comes through with a financial deal, site plans and drawings.

“It is safe to assume if they come back with the same things they gave the board today, we will be in a situation where we might have to open up the (licensing) process.”

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Chairman Greg Fajt said revoking the license is absolutely a possibility if the drawings and other information isn’t in by March 3. “If I were Foxwoods, I would see this as my last opportunity,” said Jeffrey Coy.

Coy and Fajt said that Foxwoods can still turn things around, and both hoped the casino would. Fajt said the sooner the Philadelphia casinos open, the sooner the revenues would bring tax relief. Coy said the board was absolutely committed that someone would open a second casino in the city.

If the board decides it no longer wants to license Foxwoods, it will take some time to issue a new license. If the board is not satisfied on March 3, Pitre said his office would then file a formal complaint recommending the board revoke the license. There would be a hearing, and the result could be appealed, Pitre said.

If Foxwoods loses its license, the board will have to devise a new procedure through which to reissue the license to another entity. If Foxwoods gets enough done to please the board, it will need to continue filing monthly progress reports.

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With a new partner and a new design, at least to some degree, in the works, Foxwoods could end up a bit different than the board imagined when it issued the original license. But Coy and Fajt said they did not think this would merit the re-opening of the license process.

They noted there have been changes at other facilities without reopening the process. When asked what level of changes would require opening the license, Fajt said he wouldn’t speculate.

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Trujillo said the board could only deal with the facts as they stand now, and Foxwoods has not submitted any new designs or investors yet.

When asked if they feared approving such changes without reopening the process would result in lawsuits, Coy said, “If this board worried about possible legal actions … we would never get anything done.”

One failed applicant, Donald Trump’s group, has already filed lawsuits trying to pry the application process back open.

Jacoby said he anticipates his client will be asking the board to approve changes to the original design based on the new investor’s ideas. Under a provision in the new table games law, that would require a public hearing in Philadelphia.

That same law includes language that would allow Foxwoods to seek a “bigger-picture” extension. They can petition the board to give them until Dec. 2012 to open.

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During the hearing, Coy asked Jacoby if he or anyone else from Foxwoods had asked for this language to be included.

Jacoby said he had not. The Inquirer reported Sunday that another Foxwoods attorney, Steve Cozen, did. When Coy pressed on this, Jacoby said there was a difference between seeking langauge and being consulted on language.

After the hearing, both Coy and Fajt, who themselves have served in the legislature, said the exchange angered them and was disrespectful.

“To play lawyer with the board, that was offensive,” Fajt said. It was not why the board decided to double enforcement council’s suggested fine, though.

That  “was based at frustration at the lack of progress.”

FULL STORY AND VIDEO TO FOLLOW

Contact the reporter at kelliespatrick@gmail.com

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