Grandiose dreams defy reality

Mohegan rolls 4Q loss on layoffs, project halt

The Mohegan Sun, one of Connecticut's two tribal casinos, landed in the red in the fiscal fourth quarter, the result of millions of dollars in layoff costs and expenses tied to its shelved casino expansion project.

The casino's operator, Mohegan Tribal Gaming Authority, reported Tuesday a loss for the three months ended Sept. 30 of $26.3 million. That compares to a $66.4 million profit in its fourth quarter in 2009.

Mohegan's revenues for the quarter were $408.6 million, a 3 percent increase from $396.7 million the same period last year.

For the year, Mohegan Sun eked out a $9.7 million profit, down 92 percent from income of $119.3 million in fiscal 2009.

Revenues for the year were $1.54 billion, a 2 percent drop from $1.57 billion last year.

The quarterly loss stemmed primarily from a $58.1 million impairment charge on Mohegan's halted expansion, known as Project Horizon.

Begun in 2007 with plans to add a 1,000-room hotel, a new casino and other amenities, work was suspended a year later after the recession bit hard into casino revenues.

In a statement Tuesday, the tribal authority said it didn't know when, if ever, Project Horizon will resume.

The authority also paid $9.9 million in severance charges during the fourth quarter as it eliminated 475 positions, the first layoffs in the casino's history. Over the course of the next fiscal year, the authority estimates the savings from the layoffs will be $30 million.

Despite the Project Horizon impairment charge, the suspension of that project kept the authority from sinking further into debt during the recession.

Mohegan Sun's total debt is $1.64 billion. While significant, it is smaller than rival Foxwoods resort casino's estimated $2 billion debt, resulting from its completed expansion project.