Developer Dan Keating was attending a board meeting Monday
afternoon for the University of Pennsylvania's Abramson Cancer Center when he
got an urgent message:
Steve Wynn was dropping out of the competition for a
Philadelphia casino license.
No one was more shocked than Keating. His company, Keating
Consulting, had been hired to develop a waterfront casino in the city's
Fishtown section for Wynn Resorts.
The decision, Keating said, "is a painful one for
us."
This is the second time the runaway bride of Las Vegas has
bolted from Philadelphia, and onlookers are just as baffled as the first time
it happened.
"Everyone is stunned," said Kevin Feeley, a
spokesman for Jim Anderson, the New Hope builder who gave Wynn an option to buy
60 acres on the Delaware in Fishtown. Anderson would have received a million
shares of Wynn Resorts stock had the Las Vegas company won the Philadelphia
license - a deal valued at more than $167 million.
"We're just sort of letting the smoke clear and see
where we are," Feeley said. "We're surprised, disappointed - a lot of
people are. There are a lot of people on the ground in Philadelphia who did a
lot of work on this project and believed in it."
The last time this happened, in 2010, Wynn stepped in to
rescue the sinking Foxwoods Casino only to abruptly step out of the deal a few
weeks later.
This time around, Wynn Resorts said among the "host of
factors" was the performance of the local gaming market, which has been
slipping, as well as the recent vote in New York state to expand gaming.
Onlookers who are familiar with Wynn's efforts here have
their own theories on what may have played out behind the scenes. Most spoke on
condition of anonymity.
The most popular theory is that Wynn was afraid of losing
his bid for a license in Philadelphia.
While his waterfront project had the highest price tag -
$926 million - it was not the clear front-runner.
Five other groups are vying for the city's second license:
three in South Philadelphia (Casino Revolution, Live! Hotel & Casino, and
Hollywood Casino Philadelphia) and two in Center City (the Provence and
Market8).
The Wynn project had strong backing from community groups,
but only qualified support from city officials. Wynn billed his project as part
of a global gaming empire extending from Las Vegas to Macau. But Deputy Mayor
Alan Greenberger recently expressed doubts about the company's ability to draw
international customers to such an isolated site in Fishtown.
"Better to bail instead of looking like you lost,"
said a real estate investor familiar with people involved in the Wynn project.
The flip side of this thinking is the possibility that Wynn
Resorts could win a license in Boston.
Massachusetts soon will select a gaming operator for the
Boston area, and Wynn Resorts has an inside edge with its proposed $1.3 billion
project there, many observers say.
The other contenders include a project with Foxwoods Casino,
a financially ailing tribal operator; and a casino resort at the Suffolk Downs
racetrack. The racetrack project has not received community support and had to
recently drop its operator - Caesars Entertainment - because of concerns raised
by regulators about its suitability.
"He wants Boston worse than Philadelphia," said a
person familiar with the casino competition here.
When Wynn first surfaced as a possible bidder in
Philadelphia, skeptics immediately placed bets on whether he would follow
through.
At every opportunity, Wynn insisted that he was committed to
Philadelphia. With his signature flamboyance, he painted a vision of grandeur
for Fishtown, promising a luxury hotel, spa facilities, a riverfront promenade,
restaurants, and gardens.
In an interview with The Inquirer on Feb. 7, Wynn was asked
point-blank whether his abrupt 2010 exit from the Foxwoods deal would haunt
him.
Wynn countered that he got into that venture only as a favor
to his friend "Ronnie" - shopping center developer Ron Rubin. But
once he agreed to take over the project, he said, he could never get his arms
around the finances.
"There was no way of making a business out of it, and I
had to tell Ron Rubin, 'Hasta luego,' " Wynn said.
Pennsylvania regulators, he added, "told me they didn't
blame me for leaving."
Philadelphia and Boston were supposed to be the first
attempts to extend the Wynn brand to cities. But recently, Wynn, famous for his
thin skin, revealed his impatience with regional regulators.
In a conference call with Wall Street analysts Oct. 24, Wynn
said states were "asking us to come and spend billions of dollars. Now, if
we were any other business, they would stand on their head and spit wooden
nickels to get billions of dollars invested from any other business. But we
find ourselves being treated, in many respects, as if they're doing us a
favor."
A state official who read the transcript remarked, "You
could start to see him getting a little perturbed."
Said another observer involved in the license competition:
"He was a lot more irascible than I anticipated, given that gaming
officials from two states were listening to him."
The following week, Wynn Resorts' board met for two days and
voted to pull the plug on Philadelphia.
Source: Philly.com
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