State gambling regulators cleared the way Friday for Las Vegas developer Steve Wynn to buy land in Everett for his proposed $1.3 billion casino, amid revelations about the land’s possible owners that emerged from salacious jailhouse transcripts.
During the past several months, gambling commission investigators performing a background check on Wynn Resorts have reviewed thousands of pages of documents, interviewed dozens of people, and listened to hours of recordings in an effort to determine if hidden partners with criminal histories own shares in the land on the Mystic River where Wynn wants to build a hotel casino.
Investigators found that Charles A. Lightbody, a felon with an alleged hidden interest in the land, has repeatedly bragged about his plans to conceal his stake in the property, according to transcripts of profanity-laced prison phone recordings released Friday.
The recordings were made during Lightbody’s conversations with Darin Bufalino, a longtime organized crime figure now serving a state prison sentence.
The connection between Lightbody and Bufalino came to light as part of a review that a commission investigator described as “one of the most complex and convoluted fact patterns to put on paper.”
Investigators say they found “no evidence whatsoever’’ that Wynn officials knew about any hidden ownership in the Everett property. Based on that finding, the state gambling commission Friday approved Wynn’s plan to address concerns that convicted criminals may profit through the sale of the land to a gambling business.
Under this plan, Wynn slashed the purchase price he would pay for the land from $75 million to a market rate price of $35 million, based on an extensive appraisal of the property. Environmental cleanup of the former Monsanto chemical site is estimated to be about $10 million, which will be placed into an escrow account under the deal Wynn officials outlined Friday.
That deal leaves the sellers with a profit of about $25 million. If there are any undisclosed stakeholders, they would receive no extra benefit from selling the land to a wealthy casino company, rather than, say, a big-box retail store.
Wynn Resorts expects to pay for additional environmental cleanup of polluted sediment in the Mystic River related to the property and more cleanup work on the land if needed to accommodate an underground parking garage, Wynn officials told the gambling commission Friday.
The sellers, who have maintained they have no secret partners, did not want to accept such a steep cut in the original purchase price, but “if we terminated the agreement and went away, the best they could do is [sell the land] for fair market value,” Kim Sinatra, Wynn Resorts general counsel, told the commission.
In approving the arrangement, commissioners said they were convinced the casino company was not involved in any deception, and credited Wynn for responding quickly after state investigators in the summer raised red flags about potential secret owners in the property.
The commission’s approval of the revised land deal removes a threat to Wynn’s plans, and allows him to move ahead in the competition for the Greater Boston resort casino license.
Wynn Resorts must still pass the full background check; the commission has set a hearing for Monday to review the full state report on the international company.
The only other potential competitor for the Greater Boston casino license is Mohegan Sun, which has proposed a casino on about 40 acres of the Suffolk Downs racetrack property in Revere, near the Boston city line. The project faces a referendum vote in Revere, probably in February.
The state investigation suggests the Everett landowner, FBT Everett Realty — which includes listed partners Dustin DeNunzio, Paul Lohnes, and Anthony Gattineri — withheld information from Wynn and from state investigators and “provided false and deceptive information and documents.”
Investigators also found evidence “that at least one of the sellers, that is, Charles Lightbody, possessed a significant criminal history and took affirmative steps to conceal his role and interest in the transaction so as to avoid jeopardizing the sale of the property” to Wynn, according to state documents.
The highlight of the investigative report into the Everett property are the transcripts of calls recorded in late 2012 between Lightbody and Bufalino, the enforcer for a crime family, in which the men discuss Wynn’s planned purchase of an option to buy the land in Everett.
On December 5, 2012, as Wynn was negotiating the deal, Lightbody assured Bufalino that “we’ve got Steve Wynn in our corner . . . We took on Wynn, now Wynn is supposed to start paying up $100,000 a month December 14,” a reference to the monthly fee to maintain the option rights on the land.
A week later, Lightbody told Bufalino he was waiting for Friday because “Friday is the day that they sign or they don’t sign,” referring to the land deal between FBT and Wynn.
Gambling commission chairman Stephen Crosby recused himself from any role in the review of the land deal because of a past business association with Lohnes, one of the owners of the land. On Wednesday, another gambling company, Caesars Entertainment, filed a federal lawsuit against Crosby, accusing him of discriminating against the company because he was predisposed to favor the Everett project that would benefit Lohnes.
Caesars was dropped from the Suffolk Downs project in October, after commission investigators issued an unflattering background report on the company.
Crosby and the commission have said the lawsuit is “without merit.”
Wynn chose the Everett site in late 2012, after local opposition in Foxborough persuaded him to abandon plans to build a casino near Gillette Stadium. The developer said he liked the Everett parcel for its proximity to the Mystic River and for the skyline views of Boston.
Wynn signed an option to buy the land a year ago, and last June Everett voters overwhelmingly endorsed Wynn’s plans to develop a casino hotel there. FBT Everett Realty bought the land in 2009 for a little more than $8 million, according to people familiar with the deal.
The Globe reported last month that a federal grand jury and other agencies are investigating whether Lightbody had a role as a secret investor who stood to collect a windfall if Wynn bought the parcel.
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