Mayor Carlo DeMaria of Everett wants the city to acquire the property where Steve Wynn has proposed building a $1.6 billion casino, and then resell it to the Las Vegas mogul, using the city’s power of eminent domain to remove a roadblock that has threatened to kill Wynn’s chances of getting a casino license.
Under DeMaria’s plan, Everett would buy the casino site and seven other nearby properties for approximately $41 million and then resell them at the same price to Wynn Resorts. City officials said that their urban renewal proposal for the long-
depressed area along the Mystic River was under development before Wynn proposed a casino and is not solely for his benefit.
“This area, as you are well aware, is critical to the future success of the entire city and will serve as a gateway to the entire region,” DeMaria said in a letter to Everett city councilors dated April 10. “My administration is committed to realizing the extraordinary potential of this area and the city as a whole.”
But City Council president Michael Marchese said he views DeMaria’s proposed “Lower Broadway Urban Renewal Plan” as a favor to Wynn.
Wynn Resorts has previously offered to buy the former industrial land for $35 million if regulators approve his casino, but Massachusetts Gaming Commission investigators found that the current owners were being dishonest about the involvement of convicted felon Charles Lightbody, one of their original partners.
One co-owner of the proposed casino site, Anthony Gattineri, has refused to sign a pledge that there are no secret partners in the deal, rekindling speculation that Lightbody is still involved, even though he insists he sold his interest in the 30-acre parcel long ago. The commission has required the sworn statements as a condition for approving Wynn’s license.
“We assumed this is Wynn’s deal,” Marchese, the City Council president, said in an interview. “They’re trying to bypass Gattineri. To avoid it, they’ll have someone else buy it.”
Marchese said Assistant City Solicitor David Rodrigues told him that the city’s land purchase, called a taking in legal terms, would go forward even if Wynn does not win a casino license, suggesting that other developers would want to build on the land. It is a former Monsanto Co. site that has been unused for decades.
“We haven’t had a developer here in over 20 years,” Marchese said in an interview. “We only know what we hear, and what we hear we don’t trust.”
The 54.8 acres the city wants to acquire is part of a larger urban renewal area that covers 128 acres that DeMaria argues is ripe for redevelopment, noting that it is dotted with abandoned oil tanks, dilapidated buildings, and contaminated land. The city plans to spend tens of millions upgrading the area in addition to the land taking.
The question of whether Everett’s urban renewal plan benefits the city or mainly Wynn could loom large, because, under state law, government taking of private land has to serve a public purpose — in this case, redeveloping a blighted section of the city — and not just for the benefit of a private party.
Everett voters overwhelmingly approved a referendum on the casino proposal last year, largely on the promise that a casino could bring in thousands of jobs.
However, this is the first time that Everett voters are being asked to put up tax dollars to support the casino. Although DeMaria’s plan calls for Wynn to reimburse the city for the land, the broader urban renewal effort also calls for more than $30 million in other improvements in the areas, some of them paid for with city funds or bonds. Marchese is skeptical residents would support it if they think the deal is primarily for Wynn’s benefit.
The land-taking would be a substantial boost to Wynn Resorts, acquiring not only the casino site, but several nearby properties that Wynn also had planned to purchase. Once Everett controls the property, the law does not require the newly created Everett Redevelopment Authority to go through public bidding procedures, allowing it to resell directly to Wynn.
Michael Weaver, a spokesman for Wynn Resorts, declined to comment on DeMaria’s proposal, saying, “Because this is a city of Everett action, we really don’t have any comment.”
DeMaria’s land-taking plan is the latest twist in a high-stakes battle between two blue-collar cities, Everett and Revere, for the Boston area’s only casino license . Wynn’s proposal appeared to gain the upper hand last year when Everett voters approved his plan, while East Boston rejected a proposal that would have straddled the Boston-Revere line, forcing the developers to revise their plan so that no part of the casino was in Boston.
Then Wynn ran into problems with the owners of the proposed casino site, FBT Everett Realty.
Lightbody, who has served prison time for assault with a dangerous weapon and has pleaded guilty in a massive identity theft ring in New York, was one of the original partners of the site, but he has claimed he sold his interest long before Wynn came along. However, gambling commission investigators said Lightbody and his partners may be hiding his continued stake in the company even after Wynn attempted to renegotiate the land deal last year to squeeze Lightbody out.
The Globe reported this month that ownership of the casino site is under state and federal investigation.
Hoping to avoid the taint of criminal investigation, state gambling commissioners ordered all three owners of FBT Realty to sign a pledge that there are no other secret partners. Two did, but Gattineri refused on the advice of his criminal attorney.
DeMaria’s urban renewal plan, presented to the City Council Monday night, appears to be on a fast track, and the mayor has asked for a public hearing on April 28. If the council approves the urban renewal plan, it will go to state community development officials for review before the Everett Redevelopment Authority can begin taking the land.
In addition, the gambling commission would need to review Everett’s proposal, said spokeswoman Elaine Driscoll.
City officials say the entire process could be completed in months, in time for Wynn to begin constructing his casino. Under state law, if Wynn gets Boston’s only casino license, he must have control of the proposed site within 60 days.
However, many questions remain, including how much the eminent domain acquisitions would actually cost. DeMaria’s proposal estimates the total price to the city will be $41 million, but that is based on rough estimates, rather than appraisals, city officials concede, and at least one land owner said the estimated purchase price for his land was very low.
Gerry Berberian, owner of an office building at 3 Charlton St., said that he paid $3 million for the property in 2007 and that Wynn had previously offered to pay significantly more. But DeMaria’s proposal estimates the cost of acquiring 3 Charlton St. at $1.2 million.
“That price is too low; I want a fair price,” said Berberian, who added that he had not previously heard about the proposed acquisitions.
The urban renewal plan also includes a number of favorable assumptions that may or may not come true. For instance, DeMaria’s proposal plans to use tens of millions in state and federal grant money to pay for improvements in the urban renewal area, but the city has not applied for them yet, state officials say.
Likewise, the plan calls for the city to acquire a sliver of land from the MBTA, which, as a government agency, cannot be the target of an eminent domain action, state officials say. MBTA officials have stated they will not sell the land without a competitive process.
Finally, it is unclear if DeMaria’s plan would prevent Lightbody or other criminals from profiting from a Wynn casino. In a taped conversation with a state prison inmate last June, Lightbody boasted he had the strip club near the casino site “locked up tight as a drum,” according to a transcript provided by the gambling commission.
Under DeMaria’s plan, King Arthur’s Lounge, less than a mile from the casino site, would remain in private hands, and two Lightbody associates have announced plans to redevelop the strip club if Wynn’s casino is approved.
DeMaria said there is more at stake in his plan than Wynn’s casino or people seeking to profit from it.
“This entire process represents the reclaiming of Everett’s future from decades of underutilization and contamination,” DeMaria said in a statement. “We will continue to ensure that this process proceeds for the benefit of every resident and business in that area and in the entire city of Everett.”
But Marchese said councilors need to know a lot more before they can approve the plan.
“This is the first time anything like this ever happened in the city of Everett,” he said.