What’s going on with Foxwoods?

Feb. 6, 2010
By Kellie Patrick Gates
For PlanPhilly

A Foxwoods attorney told an impatient Gaming Control Board last month that by Feb. 5, he expected his client to have reached a tentative agreement with a prospective new investor, and that the document attesting to that would be delivered to the gaming board’s enforcement arm for a review.

So has that happened? The status of the anticipated deal is something the Pennsylvania Gaming Control Board says it will not share. “I can’t comment on financial documents,” said spokesman Richard McGarvey.

Multiple attempts to speak with Philadelphia Entertainment and Development Partners attorney Fred Jacoby this week were unsuccessful. During one attempt to reach Jacoby, his assistant said he’s been extremely busy.  That’s certainly not surprising, considering the fact that his client’s gaming license is on the line.

Foxwoods owes the Gaming Control Board site plans, drawings and similar documents related to its plans for Delaware Avenue and Reed Street. Because it missed a Dec. 1 deadline to provide this information, it also owes $134,000 in fines – an amount that will increase by $2,000 per day until the Board’s Bureau of Investigation and Enforcement receives the documents.

Foxwoods told the board at a Jan. 27 hearing that it couldn’t produce the site plans until it reached an agreement with the new investor, because the investor – rumored to be casino mogul Steve Wynn, but officially identified only as a guy with a lot of money and a lot of casino experience – wants a say in the design.  That agreement couldn’t happen, Foxwoods said, until the legislature made up its mind on table games. It legalized them in early January. Foxwoods asked the board to extend the Dec. 1 deadline to March 1, when financing documents are due. But the board, in short, took the reasoning Jacoby provided as more excuses. It denied the extension, levied the fine, and warned that if Foxwoods hadn’t delivered the information by its March 3 meeting, it would face additional sanctions, up to and including the loss of its license.

During the hearing, Jacoby asked for patience and asserted that Foxwoods had made significant progress. As evidence of this, Jacoby said he expected Foxwoods to reach a tentative agreement with its new investor by the end of that week, and that by the end of this week, the BIE would have a copy to review. With the BIE’s approval, Jacoby said, the deal would then be sealed.

The reports on site plans and drawings and financing information are all conditions of the two-year license extension the board gave Foxwoods last August.  Another condition: Foxwoods must file monthly status updates with the BIE on financial and other progress toward opening, due the first of  each month.

The board does not release these reports to the public, based on the fact that they contain financial and other information deemed private under state law. The state’s Office of Open Records recently backed them up in a case in which two groups of Philadelphia activists sought access to the filings.

But the board has confirmed the BIE’s receipt of these reports each month. February’s came in on time, McGarvey said.

When asked why the board could not then similarly say whether or not the tentative financial agreement had been delivered to the BIE, without revealing its contents, McGarvey said the BIE is considering such an agreement to actually be part of the monthly report.

“It’s the same thing,” he said, so to say whether or not the agreement has been received would be to comment on the contents of the monthly report – something the board won’t do.

When PlanPhilly pointed out that the required contents of the filings were established by the board back in August,  and that the tentative financial agreement was not heard of until Jan. 27, McGarvey said that didn’t matter – it is still part of the financial update.

Whether Foxwoods met Jacoby’s projected timeline is not nearly as important to the casino’s future as whether it meets the board’s deadline to produce the reports it owes the BIE by a scheduled March 3 hearing. If the board is unsatisfied, the casino team could lose its license or face additional sanctions, McGarvey said.

After the Jan 27 hearing, the board’s Chief Enforcement Council Cyrus Pitre, said license revocation is a long process. Pitre said if sufficient progress isn’t made, his office would 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.
McGarvey said the board could use the process described by Pitre, but it also has discretion to yank Foxwoods’ license on the spot.

At the Jan. 27 hearing, Jacoby said he was confident none of this would need to happen, because Foxwoods was so close to an agreement with the new investor.

If the site plans and related information are delivered, the $2,000-per-day fine will end, McGarvey said. But “there’s a possibility the board would put other conditions on the license. They have such wide discretion.”

In fact, if Foxwoods can provide enough information to make the board happy prior to March 3, the board may decide to cancel the hearing, McGarvey said.  For now, the proceeding is set to take place  in conjunction with the board’s regular meeting. It will be held in Harrisburg, McGarvey said.

If Foxwoods makes it past this hurdle, it will face others. Both the new investor and the changes in design that Jacoby said the new investor would make would have to be approved by the Gaming Control Board. Both would require a public hearing, and the latest version of the gaming law specifically states a design change hearing would have to take place in the neighborhood where the casino is to be built.

Some Gaming Control Board members told Jacoby they did not like hearing that the prospective investor would want to make significant changes in the design. They noted that when the board granted Foxwoods two more years to work on the casino, their order specifically stated the project had to be substantially similar to the original plan approved by the board when it first granted Foxwoods a license. Jacoby said that if anything, the new plan would be better.

Gaming Control Board Chairman Gregory Fajt said after the Jan. 27 meeting that adding a new Foxwoods investor would not trigger the re-opening of the licensing process.

Any changes to the investor structure or design that the board approved when it gave Foxwoods a license could trigger a lawsuit that claims the process should be reopened, however. Keystone Development Partners (Donald Trump’s casino team), which lost a bid for a Philadelphia license, is already suing the board on the basis that it discriminated against Keystone because Trump owns casinos in Atlantic City.  And all along the way, when Foxwoods has made requests of the gaming board, Keystone has filed motions in opposition.

The legislature and the Gaming Control Board are committed to having two casinos in Philadelphia. SugarHouse is under construction in Fishtown. Should the board revoke Foxwoods’ license, it will need to establish a public procedure by which the second license would be re-awarded.

Locally, Foxwoods’ biggest problems have stemmed from its location. City planners, elected officials and many residents cite traffic concerns.  Some of them also question putting any casino close to city  neighborhoods. And still others say there are better uses for riverfront property.

Deputy Mayor and Planning Commission Executive Director Alan Greenberger has said that if the state re-issues Foxwoods license, he hopes the city has more of a say in where the new licensee would build.

First District Councilman Frank DiCicco said in a recent interview that he would “do my best to keep (a new casino) off the waterfront.”

When asked if he had any thoughts on where an alternative casino should go, Mayor Michael Nutter said it was inappropriate to speculate. “I have no idea what the Pennsylvania Gaming Control Board is going to do,” he said.

If the PGCB should pull Foxwoods’ license, board member Kenneth McCabe asked Jacoby at the hearing last week, would the prospective new investor stick around and “go through the competitive process again?”

Jacoby said that he didn’t believe pulling the license would be appropriate, and he didn’t know what the investor might choose to do.

Contact the reporter at kelliespatrick@gmail.com

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