Boston-area casino bidders agree to substantial changes
For 30 tense minutes, it seemed as if the years of anticipation over granting the Greater Boston resort casino license could end in an instant on an ultimatum by state regulators, who want applicant Wynn Resorts to accept a traffic requirement the company called an "impossible business risk."
After taking some time to think, state gambling commissioners elected not to force Wynn to choose between walking away and accepting the provision.
At least not yet.
The panel instead invited Wynn Resorts to speak to the commission Tuesday morning about the tough licensing requirements the commission has recommended to address traffic in Sullivan Square, if the company's Everett casino proposal wins the casino license.
Whether the commission will still insist on the provision and whether Wynn will accept it are likely to be decided Tuesday.
Rival applicant Mohegan Sun is also invited to address the board for 20 minutes over its licensing conditions, which mostly relate to finances and marketing.
Monday's drama, however, clearly centered on the demands on Wynn.
The international casino giant emerged last week from the commission's category-by-category evaluations with higher overall scores, based on stronger finances, more jobs created, and double the construction investment.
But the Wynn application hit a hurdle on Sullivan Square, and the commission's proposed requirements to address traffic in the notorious Charlestown bottleneck.
Wynn has committed to about $6 million in short-term traffic improvements in the square, required by the routine state environmental review for large projects.
In addition, the commission wants Wynn to take responsibility for some long-term traffic improvements in the area, in part by agreeing to pay 10 percent of the costs of a long-planned reconstruction of Sullivan Square, which is expected to cost $100 million or more.
In a potential deal breaker for the $1.6 billion project, the board also wants Wynn to agree to pay fines of $20,000 per vehicle for casino traffic through Sullivan Square exceeding certain targets, as an incentive for the developer to encourage patrons to use public transportation.
Wynn agreed to contribute millions toward the long-term fix, increasing its compensation offer to Boston from $46 million to $63 million over the 15-year term of the license, according to Commissioner Gayle Cameron, who oversaw the commission's review of the applicants' traffic plans.
But the company said the fines were unacceptable.
"The notion that we should be penalized with added mitigation involving untold fines if we are successful and more people come to the facility, presents an impossible business risk," company chairman Steve Wynn said in a letter to the commission, released to the public Monday.
Commissioner James McHugh, the board's acting chairman and a resident of Charlestown, said the company's response did not show willingness to collaborate with state and city officials over a solution to the long-term traffic problem.
"I'm troubled by the fact they are simply putting money on the table and saying somebody else solve the problem," he said.
Commissioner Enrique Zuniga, who has praised Wynn for the company's strong finances, suggested that the board could make the traffic fines mandatory and inform Wynn that it was a take-it-or-leave-it requirement.
The rest of the panel seemed uncomfortable issuing an ultimatum without some forethought, and McHugh called a recess so the members could consider the option.
For 30 minutes, the Wynn representatives, including William F. Weld, a former governor, huddled in groups and spoke quietly into their cellphones.
When the board returned, Cameron said she wanted to hear from the applicants before making a decision, and the board invited the developers to speak Tuesday.
A Wynn spokesman declined to comment Monday evening.
Earlier on Monday, the commission affirmed that Wynn had earned the higher ranking in the commission's "project overview" evaluation, the last of five categories of review to be scored. Wynn also scored higher in the panel's review of each project's finances and contribution to economic development.
Mohegan Sun won the building and site design category and the mitigation review, which covers traffic planning.
McHugh asked Wynn last week to consider redesigning its proposed building, which Steve Wynn did not specifically accept or deny in his letter to the commission. Company officials said Monday that they have sent a clarification to the commission, saying Wynn accepts the recommendation and is considering new designs.
Mohegan Sun, according to the documents released Monday by the commission, brought more equity into its financing plan, as recommended by Zuniga, who led the commission's review of both applicants' finances. He said the financing plan is still not as strong as Wynn's.
The deliberations resume Tuesday at 9 a.m.
The Greater Boston resort casino license will be the third issued by the commission under the 2011 expanded gambling act.
The panel awarded the state's sole slot parlor license to a Penn National Gaming project in Plainville and promised the Western Massachusetts casino license to an MGM proposal in Springfield. A license for Southeastern Massachusetts is not expected to be awarded until 2015.
Voters in November will decide whether or not to repeal the gambling law.