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Foxwoods Investors Appeal License Revocation

Posted on January 14th, 2011

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The Foxwoods Casino is supposedly a money-making, job-producing project for Philadelphia. But after four years of it being awarded the gaming license, the casino is still far from being operational. The Gaming Control Board finally got tired of all the delays and complains the casino was getting and revoked its license on December 16 of last year. In a 6-1 vote, the Gaming Board decided enough is enough and took back the casino’s license and denied its request to push back its deadline to December 2012 instead of May 2012. Foxwoods has been paying a daily fine of $2000 since it has failed to meet the Gaming Board’s December 2009 deadline on updates on its construction, designs and financing. Aside from the $50 million it has cost the developers for the license alone, developers also had to shell out an expected $438 Million to complete the whole project.

Even competitor Caesars Entertainment Corp., has jumped in on the opportunity to try and lend a helping hand to the project. But the Philadelphia Entertainment and Development Partners (PEDP), the investors for Foxwoods has failed to prove they have the sufficient funding for it. The PEDP is required to show the court proof that they could indeed produce $75 Million, along with the additional $200 Million to finish the casino. According to Philadelphia Development Partners, they already have “prepared the necessary work and taken the necessary steps to address and satisfy all the unresolved matters cited by the board.” but those steps have obviously backfired and in the end cost them their license. “I was shocked, I really didn’t expect to see revocation.” says Fred Jacoby lawyer for PEDP.

Foxwoods was originally planned to sit in a 67,000 square meter property along the Delaware River. But residents’ protests and oppositions won the government over and the project proposal was moved to Market East. But then, once more, oppositions from residents proved to be a major dilemma, as protests pertaining to the location of the casino once again mounted. Developers opted to let the people have their way and moved to the original location along the waterfront. Locations of casinos have always caused residents’ outcry especially if the casino project is built in areas with residential complexes or subdivisions. Casinos in the country have always avoided such densely populated areas as complains of traffic and pollution due to construction always follows. That is the same reason why casinos are built in mostly unchallenged territories.

But the developers would not give up that easily, especially when the board did not issue an explanation as to why the license was revoked. The board has only informed the public that they will announce their reasons for revocation in the following weeks. The PEDP has filed a Petition for Reconsideration of the Gaming Control Board’s decision. The petition confirms that all the necessary documentation, commitments for its debts, and equity financing are now secured. The PEDP, in its appeal has also announced that everything has been set in place and that they are ready to commence with the project’s construction. The PEDP has also reassured the Board of their commitment to finish the casino. The PEDP also confirms that Caesars Entertainment has committed to fill in whatever funding shortages they currently have, in order to finish the casino, and that unequivocal agreements have been made by the parties pertaining to the project.

With all the necessary documents, the PEDP is confident that the Board will look at their appeal favorably. The developers also reiterated its commitment to the progress of Philadelphia’s gambling market and in delivering much needed jobs and in helping Philadelphia recover from recession and budget cuts by providing millions in tax revenues. According to Steve Cozen, one of PEDP’s lawyers, “We’re ready to go and we can have this up and running in 20 months time or the alternative is we will pursue our appellate rights which we have the right to do because we feel the revocation was improper and we can be in that process for the next few years.” The Board can either continue the revocation and issue the license to other interested parties, or give the license back to PEDP, the board will have to issue a decision within the month.