Owners to sell Mass. racetrack to Pa. company seeking slots-parlor license
Published: September 03, 2013
By Paul GrimaldiPaul GrimaldiProvidence Journal
Journal Staff Writer
Published: September 03 2013 11:25
PLAINVILLE, Mass. — The owners of Plainridge Racecourse announced Tuesday that they’ve reached a tentative agreement to sell their Plainville track to a Pennsylvania group seeking a new Massachusetts slots-parlor license.
Penn National Gaming, of Wyomissing, Pa., will acquire the 89-acre track property if the Massachusetts Gaming Commission approves its bid. Commissioners expect to award a slots-only license, the first of four new Massachusetts gambling licenses, in December.
Plainville residents have been debating in the dark leading up to a Sept. 10 townwide referendum on a host-community agreement Plainridge applicant Ourway Realty needed as a prerequisite for the slots license.
The tentative nature of the proposal is the latest in a string of potentialities set in motion in 2011 when Massachusetts Governor Patrick signed a new law that allows three resort casinos in different geographic regions of the state and one slots parlor anywhere in the state.
Investors traversed Massachusetts during the last two years looking for communities willing to deal with the traffic and logistical headaches likely to come with mall-sized gambling halls and their runway-length parking lots in exchange for money to build new schools, senior centers or other public infrastructure.
Eleven partnerships ultimately applied for licenses, with four of those seeking the slots-only license.
Rhode Island’s two gambling halls — Twin River Casino and Newport Grand — may know within three months who their first Massachusetts competitor is to be.
The Massachusetts Gaming Commission has said it will award by December the single, slots-only license allowed by state law.
Wherever the new slots parlor is built, Twin River and Newport Grand are forecast to lose gambling revenue to the new Massachusetts facility.
Rhode Island’s two gambling venues generated $527.3 million in net revenues in the budget year that ended June 30, 2012.
About $320.6 million of that went to Rhode Island — $31.8 million from Newport Grand and $288.8 million from Twin River, helping to make gambling the third-largest source of Rhode Island state funds.
Twin River estimates those new Massachusetts gambling facilities could drain $100 million from the money the Lincoln business annually generates for the state.
The closer to Twin River and Newport Grand the slots parlor (or any of the casinos) are built, the bigger the impact on Rhode Island revenue.
That’s why there is interest in Plainville, only an 18-mile drive from Twin River.
Almost since the beginning of the gambling competition, Plainville was seen as having the inside lane on hosting the slots-only licensee. The town is home to Plainridge Racecourse, a harness-racing track.
The Plainridge proposal got knocked out of the running this summer when a commission inquiry turned up financial irregularities at the track. Commissioners in August rejected the track’s application.
Having seen Springfield reject its casino bid and Tewksbury reject its slots proposal, Penn National began talks to take over the Plainridge bid.
Penn National has yet to clear its commission inquiry.
That’s left Plainville in something of a lurch. Having already set Sept. 10 for the referendum on a state-required host-community agreement, residents may vote on a contract without knowing whether Penn National will be a viable licensee.
“We still want to be in the running,” said Town Administrator Joseph Fernandes.
Townspeople will try to sort out the whole thing Thursday at a forum in advance of the vote next week.
“Penn National is ideally suited to pursue the [slots] license,” John Grogan, Plainridge’s president, said Tuesday. “Penn National has a strong track record of transitioning racing facilities into successful racing and gaming entertainment operations, which benefit local horsemen, local communities and all state residents through economic development leading to the creation of new jobs and new tax revenues.”
The beneficiary of the Plainville conundrum may very well be Raynham where residents on Aug. 13 approved a host-community agreement with Raynham Park LLC — an investor group fronted by racetrack owner George Carney.
Raynham Park’s deal gives the town a $1-million fee the first three years of operations, which will increase slightly each year. Raynham Park will also pay a $100,000 annual “capital costs enhancement fee” and contribute $15,000 per year to the Route 138 business façade improvement program. Raynham Park would also pay additional real estate taxes assessed on the development.
Two other companies are bidding for the slots-only license: Mass Gaming & Entertainment — an affiliate of Chicago-based Rush Street Gaming — which wants to build in Millbury; and Baltimore-based Cordish Cos., which wants to build in Leominster.
Mass Gaming and Cordish each propose spending $200 million to build a slots parlor.
The Millbury plan calls for a 110,000-square-foot casino, with 1,250 slot machines, food and beverage venues, multipurpose function space and a day spa. It would be near the Shoppes at Blackstone Valley on the outskirts of Worcester.
Millbury would receive $500,000 prior to starting construction and up to $50,000 for additional public safety costs. In addition, the town would get annual payments of a minimum $3.25 million, which would increase 2.5 percent annually beginning in the fourth year and 1.25 percent of gross gaming revenues exceeding $175 million. The company would also pay for public infrastructure construction tied to the slots parlor.
The Cordish agreement with Leominster calls for the city to receive the greater of 2 percent of Cordish’s gambling revenue or $3.5 million a year for the first five years. The payment would be adjusted after that period. After 10 years, Cordish would contribute 2.5 percent of its revenues to the city.
Both towns will hold referendum votes Sept. 24.
The Gambling Commission has an Oct. 4 deadline for final slot parlor plans.
It’s possible for Central Massachusetts to end up with two commercial gambling halls — a slots parlor and a casino.
Operators of the tribal-run Foxwoods Resort Casino in Connecticut are vying for the Greater Boston license — a territory that extends to Worcester. Foxwoods has a proposal to build a casino in Milford. Rival projects are sought in Boston and in Everett.
Foxwoods has offered $34 million up front to Milford and $31 million in annual payments to the town along Route 495 to approve a casino agreement.
“The proposal has changed dramatically,” said Richard A. Villani, the Milford town administrator, as Foxwoods sweetened its offer in the last month in response to the deals made by its rivals.
Foxwoods competitors are Wynn Resorts, which plans a $1.2-billion casino across from Boston on the Mystic River waterfront in Everett, and Suffolk Downs, which has teamed with Caesars Entertainment on a $1-billion plan for the racetrack that straddles East Boston and Revere.
Milford’s selectmen will debate the proposed Foxwoods host-community agreement Wednesday, when they could approve sending the deal to voters.
A casino would be “a game changer” for Milford, Villani said.
A decision on the Boston area casino license is not expected until the first week of April 2014.
In Western Massachusetts, the competition is down to three proposals — a rural site in the town of Palmer, one in downtown Springfield and the third on the site of the Eastern States Exposition — more popularly known as the Big E — in West Springfield.
Nevada-based casino giant MGM Resorts is the Springfield applicant and entertainment company Hard Rock International is the applicant for the fairgrounds.
In late August, Mohegan Sun agreed to give Palmer approximately $3 million upfront and annual payments of about $16 million. Mohegan Sun would include $23 million in public infrastructure improvements, including expansion of the Exit 8 interchange of the Massachusetts Turnpike.
The annual payment includes fixed payments of $15.2 million and a percentage of gambling revenue equal to 0.25 percent of the first $400 million. The town also will receive an additional 2 percent from every dollar of gross gambling revenue greater than $400 million annually.
The agreement will allow the casino operator to put its proposal to a local vote, the next step in the licensing process. The mandatory municipal referendum will take place between 60 and 90 days from the deal’s formal completion.
The MGM plan calls for $15 million in up-front payments to Springfield and $25 million annually.
The Hard Rock plan calls for $41 million in upfront payments and $18 million annually.
http://www.providencejournal.com/breaking-news/content/20130830-owners-to-sell-mass.-racetrack-to-pa.-company-seeking-slots-parlor-license.ece
Penn National Gaming, of Wyomissing, Pa., will acquire the 89-acre track property if the Massachusetts Gaming Commission approves its bid. Commissioners expect to award a slots-only license, the first of four new Massachusetts gambling licenses, in December.
Plainville residents have been debating in the dark leading up to a Sept. 10 townwide referendum on a host-community agreement Plainridge applicant Ourway Realty needed as a prerequisite for the slots license.
The tentative nature of the proposal is the latest in a string of potentialities set in motion in 2011 when Massachusetts Governor Patrick signed a new law that allows three resort casinos in different geographic regions of the state and one slots parlor anywhere in the state.
Investors traversed Massachusetts during the last two years looking for communities willing to deal with the traffic and logistical headaches likely to come with mall-sized gambling halls and their runway-length parking lots in exchange for money to build new schools, senior centers or other public infrastructure.
Eleven partnerships ultimately applied for licenses, with four of those seeking the slots-only license.
Rhode Island’s two gambling halls — Twin River Casino and Newport Grand — may know within three months who their first Massachusetts competitor is to be.
The Massachusetts Gaming Commission has said it will award by December the single, slots-only license allowed by state law.
Wherever the new slots parlor is built, Twin River and Newport Grand are forecast to lose gambling revenue to the new Massachusetts facility.
Rhode Island’s two gambling venues generated $527.3 million in net revenues in the budget year that ended June 30, 2012.
About $320.6 million of that went to Rhode Island — $31.8 million from Newport Grand and $288.8 million from Twin River, helping to make gambling the third-largest source of Rhode Island state funds.
Twin River estimates those new Massachusetts gambling facilities could drain $100 million from the money the Lincoln business annually generates for the state.
The closer to Twin River and Newport Grand the slots parlor (or any of the casinos) are built, the bigger the impact on Rhode Island revenue.
That’s why there is interest in Plainville, only an 18-mile drive from Twin River.
Almost since the beginning of the gambling competition, Plainville was seen as having the inside lane on hosting the slots-only licensee. The town is home to Plainridge Racecourse, a harness-racing track.
The Plainridge proposal got knocked out of the running this summer when a commission inquiry turned up financial irregularities at the track. Commissioners in August rejected the track’s application.
Having seen Springfield reject its casino bid and Tewksbury reject its slots proposal, Penn National began talks to take over the Plainridge bid.
Penn National has yet to clear its commission inquiry.
That’s left Plainville in something of a lurch. Having already set Sept. 10 for the referendum on a state-required host-community agreement, residents may vote on a contract without knowing whether Penn National will be a viable licensee.
“We still want to be in the running,” said Town Administrator Joseph Fernandes.
Townspeople will try to sort out the whole thing Thursday at a forum in advance of the vote next week.
“Penn National is ideally suited to pursue the [slots] license,” John Grogan, Plainridge’s president, said Tuesday. “Penn National has a strong track record of transitioning racing facilities into successful racing and gaming entertainment operations, which benefit local horsemen, local communities and all state residents through economic development leading to the creation of new jobs and new tax revenues.”
The beneficiary of the Plainville conundrum may very well be Raynham where residents on Aug. 13 approved a host-community agreement with Raynham Park LLC — an investor group fronted by racetrack owner George Carney.
Raynham Park’s deal gives the town a $1-million fee the first three years of operations, which will increase slightly each year. Raynham Park will also pay a $100,000 annual “capital costs enhancement fee” and contribute $15,000 per year to the Route 138 business façade improvement program. Raynham Park would also pay additional real estate taxes assessed on the development.
Two other companies are bidding for the slots-only license: Mass Gaming & Entertainment — an affiliate of Chicago-based Rush Street Gaming — which wants to build in Millbury; and Baltimore-based Cordish Cos., which wants to build in Leominster.
Mass Gaming and Cordish each propose spending $200 million to build a slots parlor.
The Millbury plan calls for a 110,000-square-foot casino, with 1,250 slot machines, food and beverage venues, multipurpose function space and a day spa. It would be near the Shoppes at Blackstone Valley on the outskirts of Worcester.
Millbury would receive $500,000 prior to starting construction and up to $50,000 for additional public safety costs. In addition, the town would get annual payments of a minimum $3.25 million, which would increase 2.5 percent annually beginning in the fourth year and 1.25 percent of gross gaming revenues exceeding $175 million. The company would also pay for public infrastructure construction tied to the slots parlor.
The Cordish agreement with Leominster calls for the city to receive the greater of 2 percent of Cordish’s gambling revenue or $3.5 million a year for the first five years. The payment would be adjusted after that period. After 10 years, Cordish would contribute 2.5 percent of its revenues to the city.
Both towns will hold referendum votes Sept. 24.
The Gambling Commission has an Oct. 4 deadline for final slot parlor plans.
It’s possible for Central Massachusetts to end up with two commercial gambling halls — a slots parlor and a casino.
Operators of the tribal-run Foxwoods Resort Casino in Connecticut are vying for the Greater Boston license — a territory that extends to Worcester. Foxwoods has a proposal to build a casino in Milford. Rival projects are sought in Boston and in Everett.
Foxwoods has offered $34 million up front to Milford and $31 million in annual payments to the town along Route 495 to approve a casino agreement.
“The proposal has changed dramatically,” said Richard A. Villani, the Milford town administrator, as Foxwoods sweetened its offer in the last month in response to the deals made by its rivals.
Foxwoods competitors are Wynn Resorts, which plans a $1.2-billion casino across from Boston on the Mystic River waterfront in Everett, and Suffolk Downs, which has teamed with Caesars Entertainment on a $1-billion plan for the racetrack that straddles East Boston and Revere.
Milford’s selectmen will debate the proposed Foxwoods host-community agreement Wednesday, when they could approve sending the deal to voters.
A casino would be “a game changer” for Milford, Villani said.
A decision on the Boston area casino license is not expected until the first week of April 2014.
In Western Massachusetts, the competition is down to three proposals — a rural site in the town of Palmer, one in downtown Springfield and the third on the site of the Eastern States Exposition — more popularly known as the Big E — in West Springfield.
Nevada-based casino giant MGM Resorts is the Springfield applicant and entertainment company Hard Rock International is the applicant for the fairgrounds.
In late August, Mohegan Sun agreed to give Palmer approximately $3 million upfront and annual payments of about $16 million. Mohegan Sun would include $23 million in public infrastructure improvements, including expansion of the Exit 8 interchange of the Massachusetts Turnpike.
The annual payment includes fixed payments of $15.2 million and a percentage of gambling revenue equal to 0.25 percent of the first $400 million. The town also will receive an additional 2 percent from every dollar of gross gambling revenue greater than $400 million annually.
The agreement will allow the casino operator to put its proposal to a local vote, the next step in the licensing process. The mandatory municipal referendum will take place between 60 and 90 days from the deal’s formal completion.
The MGM plan calls for $15 million in up-front payments to Springfield and $25 million annually.
The Hard Rock plan calls for $41 million in upfront payments and $18 million annually.
http://www.providencejournal.com/breaking-news/content/20130830-owners-to-sell-mass.-racetrack-to-pa.-company-seeking-slots-parlor-license.ece
Posts
No comments:
Post a Comment