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Revere would get $33m in Mohegan Sun deal

Up to $30m more to be added yearly

Mohegan Sun proposal

AP

Gary Luderitz, Vice President Operations & Development of Mohegan Gaming Advisors, left, and Chip Tuttle, Chief Operating Officer of Suffolk Downs, attended a news conference in Lynn on Dec. 9.

REVERE — Connecticut casino giant Mohegan Sun would pay the city of Revere $33 million upfront, as well as minimum annual payments ranging from $25 million to $30 million, under a deal announced Monday for a gambling resort at the Suffolk Downs racetrack.

A referendum on the proposal is expected to go before Revere voters in February.

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“This agreement is an extraordinary deal that will help us continue to make the transformation of Revere a reality,” Mayor Daniel Rizzo told reporters Monday afternoon.

Mohegan Sun wants to build a $1 billion gambling resort on about 42 acres in Revere owned by Suffolk Downs, which the casino operator would lease. Plans call for about 4,000 slot machines and 100 table games, as well as hotel rooms, shops, restaurants, and other amenities.

“We’re going to drive a tremendous amount of prosperity for this city and lead to a huge upswing in the economic situation around here,” said Mitchell Etess, chief executive of the Mohegan Tribal Gaming Authority.

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The proposal is the second attempt to build a casino on the racetrack property, after original casino plans by Suffolk Downs failed in a split decision at the ballot box.

Revere approved those earlier plans on Nov. 5, but voters in East Boston rejected them. That same day, Mohegan Sun lost a casino referendum in Palmer, a rural town in Western Massachusetts.

Immediately after the votes, Suffolk Downs officials began speaking with Rizzo about building a casino only on the Revere side of the city line that passes through the racetrack’s 163-acre property.

Track officials struck a deal in late November to lease land to Mohegan Sun for a casino.

Under the new arrangement, Suffolk Downs would be the casino’s landlord, not the owner. The new arrangement does not legally guarantee the future of thoroughbred racing there, though track owners say they plan to keep racing.

If Revere voters approve the new casino plans, Mohegan Sun will compete with Wynn Resorts for the state’s sole Greater Boston gambling license. The Wynn plan for an Everett resort overwhelmingly won a referendum in June.

Meanwhile, in Springfield Monday, casino supporters celebrated a ruling by the state gambling commission to formally approve MGM Resorts as a bidder for the sole Western Massachusetts casino license, after reviewing a 10-month background investigation on the company.

For Revere, the new agreement is far richer than the city’s original host agreement with Suffolk Downs, which would have provided at least $9 million annually. Rizzo says the new agreement, which city officials promised to publish soon, contains language that could bump the value of the deal higher for Revere if the casino is extremely profitable. The project is expected to create 2,500 construction jobs and 4,000 permanent jobs.

Rizzo said the city would use the windfall to improve city services and facilities and to provide tax and fee relief “for all Revere property owners,” he said.

Casino opponents who led the fight against a Suffolk Downs gambling resort in East Boston promised Monday to continue their battle against the new project in neighboring Revere.

“There’s no way moving the casino a few feet removes East Boston from the impact,” said Celeste Myers, a leader of the anticasino group No Eastie Casino. Opponents in Revere, she said, are organizing a campaign to defeat the casino proposal at the coming referendum. “We’ve heard from dozens and dozens of folks in Revere,” she said. “They plan to fight it, and we plan to support them.”

Mohegan Sun’s former supporters in Palmer, who blame the casino operator for its narrow referendum loss in that Western Massachusetts town, may join casino opponents in Revere, according to a statement from the group Palmer Businesses for a Palmer Casino. The group accuses Mohegan Sun of orchestrating its Nov. 5 defeat in Palmer through “a deliberate pattern of delay and mismanagement,” so the casino operator could pursue the more lucrative opportunity in Greater Boston.

Under the original Suffolk Downs casino proposal, the city of Boston stood to gain at least $32 million a year from a casino. But that deal died when the casino referendum lost in East Boston.

The new Mohegan Sun casino proposal will be carefully drawn so that Boston is not a host community and therefore would not be permitted to vote on the plan. Rizzo said Monday that Revere will be the only host community.

Boston can negotiate for compensation from Mohegan Sun as a “surrounding community,” as defined by the state casino law, but the city has little leverage and cannot block the proposal. If Boston cannot reach a deal with Mohegan Sun, an arbitrator could decide how the city should be compensated for the effects of a casino on its border.

Mayor-elect Martin J. Walsh of Boston said in a statement Monday that it is unclear if Boston has a legal right to stop a Revere casino and that the city should negotiate.

“If we don’t work to negotiate the best deal possible for Boston, then an arbiter will decide what benefits we will receive, and the result may not be what is in the best interest of Boston,” Walsh said.

Boston is in a similar situation with Wynn Resorts, which has proposed a casino just beyond the city’s border with Everett.

To allow the new Revere proposal to go forward, the state gambling commission waived one of its year-end deadlines last week to permit a new referendum vote in Revere.

Mohegan Sun must submit all other documents and plans for its project by Dec. 31. The firm has already passed the state background check.

Mayor Carlo DeMaria of Everett congratulated Revere Monday and made a pitch for his city’s rival project.

“Despite Suffolk Downs having another bite at the apple, the right proposal for our region is Wynn Everett,” he said in a statement. “Everett, with Wynn Resorts as a partner, will continue to work hard and abide by the commission’s regulations and the spirit of the law to place our city in the best position to host a world class facility.“

The commission expects to award the Greater Boston casino license in May.

Mark Arsenault can be reached at Mark.Arsenault@globe.com. Follow him on Twitter @bostonglobemark.
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