City's Foxwoods bet backfires

HARRISBURG - For nearly a year, the investors behind the Foxwoods casino in Philadelphia flirted with moving their project from the South Philly riverfront to Market Street in Center City.

It didn't happen.

And now the state Gaming Control Board is out of patience.

Board Chairman Greg Fajt yesterday warned the investors that they risk losing their license unless they move swiftly to open a casino on Columbus Boulevard at Reed Street, the site originally approved by the board in December 2006.

Drop the relocation talk, Fajt told the investors in a hearing before the board agreed to extend the deadline for Foxwoods to open a casino by two years.

"I'm telling you, it's a fool's errand," Fajt said of moving.

Foxwoods vowed to return soon with a revised plan for a riverfront casino. Brian Ford, chief executive officer for the local investors, has a compelling motive for developing those plans.

The investors, who have sunk $160 million so far into their project, do not have the financing in place to build a South Philly casino and don't expect to get it until the plans are ready.

That raises another problem. Foxwoods has casino zoning for the South Philly location, but new plans mean a new review by the City Planning Commission.

Mayor Nutter, who has called the South Philly site "wrong for Philadelphia," questioned whether the Foxwoods casino can live up to the state's expectations.

"The fact is that the Delaware waterfront is a bad site for the Foxwoods casino," Nutter said. "It was a bad site a year ago, and it remains a bad site today."

City Councilman Frank DiCicco said Center City would be better for Foxwoods, the city and the state. "It is disappointing, although not surprising, that the board failed to see these benefits and instead sought the fastest and easiest route," he added.

Foxwoods and SugarHouse, the city's other casino, which is being built on the Delaware riverfront in Fishtown, faced two years of delays after winning licenses. City Council, neighborhood groups, anti-casino activists and Nutter's staff helped stall the projects.

"They've been stymied at every turn," said Fred Jacoby, an attorney for Foxwoods.

With Nutter urging relocation last summer and Gov. Rendell on board, Foxwoods agreed to consider it while SugarHouse refused to move. The city swiftly approved zoning for Foxwoods, first at the Gallery at 11th and Market streets and then at the former Strawbridge & Clothier department store at 8th and Market.

But Foxwoods could not make a deal on a lease for that building, which has two owners - one that wanted the casino and another adamantly opposed to it.

Foxwoods now plans to build an "interim" casino at the South Philly location, which would be followed by more phases of construction to create a larger facility. This is similar to the strategy SugarHouse put into play this year to open its casino by mid-2010.

Fajt and other board members told Foxwoods the final result must be "substantially similar" to the original casino plans.

The Gaming Control Board yesterday ordered Foxwoods to adhere to a set of 10 "benchmarks" to keep its project on pace to open by May 2011 at the latest.

The benchmarks include a written report within 30 days to spell out that plan, monthly reports on the building efforts, zoning issues and the pursuit of financing, a six-month deadline to secure financing, meetings with South Philly neighborhood groups to deal with impacts of the casino and advance notice of any change in ownership of the casino license.

That last requirement seems targeted at the Foxwoods Development Co., a subsidiary of the Mashantucket Pequot Tribal Nation, which runs the Foxwoods casino in Connecticut and has partnered with the local investors.

The tribe this week announced that it is attempting to restructure its debt. Media reports put that debt at $2.3 billion.

Ford said the tribe's financial issues are not expected to affect the local project. "Any time anyone has a difficulty in the family it creates a distraction," he added. "We've been assured by our partners at Foxwoods that this won't be the case here."

Although the tribe has issues and the local project lacks financing, Ford dismissed the notion of the investors' abandoning the casino license in Philadelphia.

"We can't imagine such an event," Ford said. "How do you walk away from an investment of that magnitude?"

With much of Foxwoods' future uncertain, one thing is sure: The casino issue will continue to create controversy and draw protests. About 25 protesters, mostly from Chinatown groups, repeatedly interrupted yesterday's hearing, shouting questions and chanting "shame."

Jethro Heiko, a Casino-Free Philadelphia founder, said his group and neighbors of proposed casino projects have created years of delays in construction.

"We'll continue to be that barrier," Heiko said. "And we'll stop them."

Ellen Somekawa, executive director of Asian Americans United, acknowledged that few in Chinatown got involved in the casino issue until last fall when they learned one could open nearby.

Will they stay involved?

"That is a question," she said.

Down in South Philly, neighborhood groups that thought they unloaded the casino issue a year ago were reeling yesterday.

"It took my breath away," said Rene Goodwin, who had been active in casino protests as part of the Pennsport Civic Association. "It's a problematic location. That hasn't changed."

Goodwin and other neighborhood leaders, like Mark Squilla of the Whitman Council, say they will regroup to restart the fight.

"Obviously we're still going to try to fight it as best we can," Squilla said. "It's disheartening."