Metro

Developer trying to buy property near Suffolk Downs for slots parlor

Suffolk Downs.
David L. Ryan/Globe Staff
Suffolk Downs.

Eugene McCain, the secretive figure behind the ballot campaign for a second slots parlor in Massachusetts, has been quietly trying to assemble a broad swath of property near Suffolk Downs, where he hopes to build a luxury hotel and gambling facility if his campaign succeeds.

McCain has been offering big money — $5.5 million for a rundown trailer park and more than $1 million for a defunct bar — for several houses and other properties behind the track, according to their owners and a lawyer who represents some of them.

“I am making offers on many properties,” McCain, a developer who lives in Thailand and has local ties, acknowledged in an e-mail, “but this is not something I can presently address as these are private discussions and contingent transactions.

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The Massachusetts political world was surprised last month when the attorney general gave preliminary approval to McCain’s ballot question, which could add a second slots casino license to the mix of three casinos and one slots parlor allowed by the 2011 casino law. It could offer a second chance at big time gambling in Revere, where Suffolk Downs was shot down by the Massachusetts Gaming Commission.

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But if McCain is to succeed where Suffolk Downs failed, he will need more than a victory on the ballot question; he may also need a change in the Revere city administration. Mayor Dan Rizzo said he would welcome a hotel, but is opposed to a slots parlor at the site.

However, Rizzo’s challenger on the November ballot, Revere City Councilor Brian Arrigo, did not immediately rule out McCain’s proposal. And he questioned why, given Rizzo’s past support of gambling, the proposal was “DOA ... before there was any kind of conversation about it.”

McCain has told homeowners on Pratt Street and other locations behind Suffolk Downs that he is working on deals with the Accor-Novotel chain for a 500- to 600-room hotel and a gambling partner, whose name he hasn’t shared. He told them a company is collecting signatures and predicted he’ll have no problem getting the required 64,750 by Dec. 2 so that his question can appear on the fall 2016 ballot.

If the ballot question passes, the gaming commission would be authorized to issue a second slots-only license, though Chairman Stephen Crosby has already expressed doubts about McCain’s plan, telling a Globe columnist: “To change in any fundamental way the basic competitive environment that our licensees, the casino operators, have bought into during their license period, would not be fair. It would be prejudicial.”

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McCain said in an e-mail that his aim is to prop up the state’s horse racing industry, which receives nine percent of slots revenue under the state gaming law.

“This industry needs to be protected,” wrote McCain. “It works for local economies, pulling in millions in tourism dollars and supporting job creation statewide. This is our opportunity to preserve the proud New England tradition of horse racing.”

But important details of the project remain unclear, including McCain’s relationship with his would-be development partner, Novotel. A spokeswoman for the hotel chain said she was unaware of a Revere project and declined to comment on it.

McCain also wouldn’t identify his financial backers and gaming consultants. Two controversial gaming businessmen, Hoolae Paoa and Shawn Scott, have accompanied him to meetings with Revere officials and homeowners, several people told the Globe. One homeowner who is selling to McCain said that the down payment came from a company owned by a business associate of Scott. McCain denied the men are involved.

The involvement of Paoa, from Hawaii, could be problematic for a slots project since he is a convicted felon and, under Massachusetts law, felons are not allowed to profit from gambling projects. Paoa was convicted of felony theft in the 1980s.

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Scott has no criminal record, but he was denied or failed to obtain gambling licenses in five states where regulators found evidence of financial mismanagement, irregular accounting practices, and hidden partnerships, according to court and regulatory records.

‘This is our opportunity to preserve the proud. . . tradition of horse racing.’

Scott, a 49-year-old entrepreneur who lives in Hawaii, and his partner John Baldwin have been involved in more than a dozen gambling ventures around the country, including casinos in Las Vegas, video poker bars in Louisiana and South Carolina, and racetracks in Louisiana, New York and Maine. Last year, a federal judge wrote that Scott’s net worth exceeded $100 million.

Scott has long been associated with Paoa. In 2003, New York regulators refused to issue Scott a license to operate Vernon Downs racetrack in upstate New York after a background check found that, among other things, Scott was too close to Paoa, whom he had appointed to key positions at the track.

Scott appealed, but a hearing officer upheld the decision in 2005, writing that “I find and determine that Mr. Scott is not a trustworthy person, and thus he is not fit to be licensed...”

None of the three men could be reached for comment. Deborah Deitsch-Perez, a lawyer who has represented Scott, said she would try to contact her client.

She defended him publicly when Scott and Baldwin came under fire during a petition drive to allow slots at a Guam race track in 2006.

“Mr. Scott has not been denied a license in five jurisdictions, he has not been accused by any regulators of financial irregularity much less found to have engaged in any, or denied a license because of any,” Deitsch-Perez wrote in an e-mail to media outlets in Guam at the time.

In addition, she wrote, Paoa “has worked hard to overcome a 20-year old mistake in judgment,” she said, referring to his felony conviction, “for which he has expressed regret many times and made full restitution long ago.”

Though McCain has declined to provide details about his plans, homeowners who have met with them say McCain and his associates should not be underestimated.

“I think it’s the real deal, “ said one homeowner, who asked that he not be identified because he signed a confidentiality agreement with McCain. “There’s a lot of money involved. My feeling is they’re lining up the property and putting a package together. They will take their chunk of change and leave.”

McCain has offered $5.5 million for Lee’s Trailer Park, for example, and more than $1 million for the former Esquire Lounge, according to Joseph Cattogio Jr, a lawyer for some of the property owners. One property owner said McCain has offered others considerably more than their property would fetch on the open market.

But some Revere landowners said they’ve been through this before only to have their hopes dashed when a proposed hotel or casino project fell through.

“There’s no pot of gold over here,” said John Ford, who said he has met with McCain about selling his Route 1A body shop. “When [former state representative Salvatore] DiMasi was speaker, one Sunday night people came here in a Lincoln limo measuring the frontage. They were representing a hotel chain. They said, ‘Are you for sale?’ I said, ‘Who isn’t at the right price?’ “

Recently, Ford met with McCain and an associate, who didn’t give his name, at a local Starbucks.

“He asked me what I was thinking, and I gave numbers,” Ford said. “We came to a number, but he didn’t say yes or no.”

The second man, Ford said, pretty much kept to himself.

“He was wearing skin-tight jeans and was playing with his gold chain,” Ford said. “We were at the last table at the end of the place and they moved the chairs to set up a barrier. The whole thing was bizarre.”

Andrea Estes can be reached at andrea.estes@globe.com. Stephanie Ebbert can be reached at stephanie.ebbert@globe.com.