The Baker administration on Friday refused to issue a crucial permit that Wynn Resorts needs to move forward with plans to build a massive, $1.7 billion casino complex overlooking the Mystic River in Everett.

One of the biggest stumbling blocks: The MBTA’s premature sale to Wynn of 1.75 acres next to the main casino property just over a month ago for $6 million. Wynn wants that land for its main access to the site.
But Matthew Beaton, Governor Charlie Baker’s secretary of energy and environmental affairs, wrote in a decision made public at 7 p.m. on Friday that the land transfer violated the state’s Massachusetts Environmental Policy Act because the MBTA sold the land before Beaton’s agency completed its review of the casino project.

Beaton demanded that Wynn update its plan for dealing with environmental issues such as traffic and noise created by the casino. As part of that update, Wynn must address the property sale issue.

Beaton articulated two possible fixes: a reversal of the land transfer or the placement of the transferred land in escrow until his agency’s review is done.

However, Beaton wrote that he’s confident his decision won’t derail the project, even though his request for another update will delay any construction start.

The tone of Beaton’s written decision left little doubt about the administration’s frustration with the handling of the sale -- displeasure that became public earlier this week.

“It is regrettable that this conveyance occurred without due public process or any inclusion of provisions to ensure consistency with the MEPA regulations’ requirements,” Beaton wrote.

Wynn officials portrayed Beaton’s decision as a positive step forward for the project, while conceding that it will delay the casino’s opening. With this decision, Wynn officials said, the casino definitely won’t open until at least sometime in 2018.

“We are disappointed that the new jobs and new tax revenues that would have helped so many people in the Commonwealth will be delayed,” Wynn Everett president Robert DeSalvio said in a statement.

But, he added: “We’re gratified that after thousands of pages of analysis and years of review, the Secretary has generally endorsed all of our mitigation plans.”

As a result of the botched sale, Beaton wrote, transportation secretary Stephanie Pollack has directed the staffs of the state Department of Transportation and the MBTA to improve the way they flag land transfers and other real estate transactions that are subject to MEPA approvals as a way of making sure this sort of transgression doesn’t happen again.

Now, Wynn will need to work with state transportation officials to address deficiencies that Beaton cited, shortfalls that go beyond the land transfer issue.

Despite what they’re called, most state environmental impact reports deal with traffic and other transportation questions. Beaton wants Wynn’s report to be updated to include a financial commitment for an Orange Line subsidy and to address unresolved traffic issues.

Wynn plans to build a gambling complex, one that would include a 629-room hotel tower, on a 34-acre site off Route 99. Those plans persuaded the Massachusetts Gaming Commission last year to award the Boston-area casino license to Wynn over a competing casino project that Mohegan Sun had proposed for Suffolk Downs on the East Boston-Revere line. The current entrance to Wynn’s site — a contaminated property once home to a Monsanto chemical plant — grazes the Boston city line, which extends over the Mystic River there.

Wynn wants the 1.75 acres it acquired from the MBTA to use for an access road to the casino that would ensure the entrance is entirely within Everett and outside of Boston’s city limits, giving Boston officials far less power over the project.

The cities of Boston, Revere and Somerville have each sued the gaming commission over its decision to award the license to Wynn. Revere Mayor Dan Rizzo saw the Suffolk Downs proposal as a big economic boost for his city. After the gaming commission picked Wynn, Rizzo dogged state officials for months to complain about the MBTA land sale, saying Wynn was unfairly given an inside track.

When news emerged earlier this week that the sale violated the state environmental law, Rizzo called on the state inspector general’s and the attorney general’s offices to investigate the sale.

Boston officials, meanwhile, are concerned about traffic, particularly at the congested Sullivan Square intersection in nearby Charlestown. Anthony Gallagher, representing Boston’s Office of Gaming Accountability, wrote on March 27 that Wynn’s traffic plan proposes a dramatic increase in Sullivan Square traffic, jeopardizing Boston residents’ safety. In that letter, Boston officials threatened to “exercise its sovereign rights to prevent its streets from being used in a manner that is incompatible with ... the safety of its residents.”

Beaton on Friday noted those concerns, saying an updated plan needs to reflect long-term improvements at Sullivan Square developed with the cooperation of state transportation officials and Boston officials. That might be easier said than done. “Building consensus with parties engaged in active litigation will be a significant challenge,” Beaton wrote.