Developer Lines Up Harrah’s to Replace Wynn on $400M Philly Casino Project
- Oct 27, 2010
October 27, 2010
By Barbra Murray, Contributing Editor
Philadelphia Entertainment and Development Partners’ plans for the construction of a new casino in Philadelphia are on the verge of clearing a major hurdle–financing. PEDP took a big hit in April when Wynn Resorts Ltd. backed out of its agreement to invest in the project, but now the development team is on the verge of officially bringing Harrah’s onboard the $400 million construction endeavor.
Harrah’s is no stranger to the casino project, which will occupy a 16-acre parcel along the Delaware River on South Columbus Boulevard. PEDP, a partnership involving Foxwoods Development Company L.L.C. and Washington Pennsylvania Investors L.L.P., executed a term sheet with its current partners and new investors calling for its existing creditors–a list that includes Harrah’s, as well as Citizens Bank–to restructure PEDP’s interests. Additionally, the arrangement allows Harrah’s to make a capital investment in exchange for an ownership interest in the proposed Foxwoods Casino Philadelphia, and to take on the role of manager of the property.
Nothing is quite set in stone, but PEDP appears close to being able to breathe a sigh of relieve. The developer has had faced more than a few roadblocks in its attempt to move forward with the casino.
The development team started out in 2005 as Washington Philadelphia Investors, a partnership consisting of Foxwoods, Foxwoods owner the Mashantucket Pequot Tribal Nation and Washington Partners Community Charities. In 2006, the Pennsylvania Gaming Control Board awarded the team a license for Foxwoods Casino Philadelphia, and in 2007, the development entity paid the requisite $50 million slot operator licensing fee. Soon big legal issues arose, but they were overcome and PGCB awarded the partners the license in 2008. The road forward was paved with additional legal challenges, location concerns and community opposition, and then the money issue reared its ugly head for Mashantucket Pequot last year.
In August 2009, PEDP, hobbled by delay after delay, requested an extension of its license for Foxwoods Casino Philadelphia, and PGCB ultimately granted the request in September. The appearance of 2010 presented little relief for the Foxwoods team. Wynn entered into a letter of intent in February to invest in the project and serve as its manager, but much to the horror of the developer and many local officials, the company pulled out of the deal in April. That same month the Office of Enforcement Counsel filed a complaint to revoke PEDP’s license.
However, the fall has brought with it better news for PEDP. In September, the Pennsylvania Commonwealth Court rejected claims by failed 2006 casino license bidder Keystone Redevelopment Partners, an entity led by Donald Trump and Trump Entertainment, that it had a right to intercede in PGCB’s proceedings involving the Foxwoods Casino Philadelphia endeavor. And now, Harrah’s is in the picture with a plan to take on a partnership role and serve as manager of the casino. If PEDP’s luck continues, the Harrah’s agreement will help prevent the revocation of its license, an issue that is being addressed today, October 27, during PGCB’s scheduled public hearings and arguments. If the developer is able to hold onto its license, it can look forward to closing the Harrah’s transaction, which is subject to a bevy of conditions including regulatory approvals and the delivery of satisfactory financing.
Keating Building Co. is in place to spearhead construction of Foxwoods Casino Philadelphia, which, in addition to its gaming offerings, will offer several dining facilities. If all goes as planned, the casino will make its debut in 2012.