Mayor Martin J. Walsh will accept an offer from casino developer Mohegan Sun that would pay the city to offset the effects of a Revere casino at Suffolk Downs but would not allow East Boston residents to hold their own binding vote on the project, said a person in the administration familiar with the negotiations.
Details of the deal were still being worked out, but the person said Monday evening that the two sides had reached an agreement in principle, with the essential outline in place. How much the casino company would pay the city, however, was still in flux and a figure was unavailable.
In accepting the casino company’s offer, Walsh would give up on his insistence that East Boston vote on the project as a “host community” under the 2011 casino law.
Walsh lost an attempt to win more power over the development in May, when the state gambling commission ruled that Boston is not a host community to the Mohegan Sun project or to Wynn Resorts’ rival casino proposal in Everett. The commission said Boston qualified for the lesser designation of “surrounding community,” which allowed the city to negotiate for compensation or to seek it in arbitration, but not to block a casino project in a binding local vote.
A Mohegan Sun spokesman could not be reached Monday evening.
The Walsh administration considered suing the gambling commission over East Boston’s right to vote on the project and the rights of Charlestown residents to vote on the Wynn proposal, but concluded that a lawsuit would be too risky, said the person familiar with the negotiations. If the city were to forgo bargaining and lose in court, it could end up without compensation for a giant casino development on its border.
Matt Cameron, a lawyer who advises the East Boston anticasino group No Eastie Casino, said Monday night that he was disappointed, but understands why Walsh would agree to a deal.
“We appreciate he has been fighting for the city,” Cameron said. “He’s in a tough position.”
Massachusetts voters will decide in November whether to repeal the state casino law, which would kill the licensing process and prevent any casinos from opening in the state. The gambling commission recently denied Walsh’s request to freeze the licensing process until after the referendum.
Mohegan Sun officials have pushed hard for months to sign a surrounding community deal with Boston, to score a public relations coup in their battle with Wynn, as well as to send a message to the gambling commission that the company would be accommodating and easy to regulate if awarded the lucrative Boston-area resort casino license.
Barring some last-minute breakthrough, Wynn Resorts and the Walsh administration will finalize their surrounding community agreement in arbitration, with each side presenting its best offer for consideration.
Wynn has already won such arbitration hearings with Somerville and Chelsea.
Mohegan Sun presented a far better surrounding community offer than did Wynn Resorts, said the person familiar with the negotiations, but Walsh will not endorse one casino project over the other.
The deal with Mohegan Sun will be the city’s second agreement with a Suffolk Downs-based casino proposal.
Last year, Mayor Thomas M. Menino signed a host community deal with Suffolk Downs, the thoroughbred racetrack that straddles the East Boston-Revere city line.
That deal would have paid the city at least $32 million a year for a casino on the East Boston side of the city line. But Eastie voters rejected the proposal at a referendum last November, blocking that particular casino plan.
A few weeks after losing the referendum, Suffolk Downs officials struck a deal to lease about 40 acres on the Revere side of their racetrack property to Mohegan Sun for a new casino just outside East Boston.
The gambling commission enraged East Boston casino opponents by waiving one of its deadlines to allow Revere officials to hold a referendum on the new casino proposal.
Revere voters approved the project in February.
The commission expects to choose between the rival casino proposals in August or September, despite the possibility that the casino law could be repealed in November.
The commission has already promised the Western Massachusetts casino resort license to MGM Resorts for a casino in downtown Springfield.
The commission will formally award the license to MGM in November if the casino law survives the repeal challenge.
Penn National Gaming won the state’s only slot machine parlor license in February. Construction is underway in Plainville, with an opening planned for mid-2015.
A resort casino license authorized for Southeastern Massachusetts is on a later timetable and is not expected to be awarded this year.