Casino group crosses fingers on decision day

YOU JUST HAD to know that on this, the do-or-die decision day for the long-stalled Foxwoods casino in South Philly, yet another delay was possible.

The local investors for the casino, along with new partner Caesars Entertainment, filed at least 25 documents Friday to meet a deadline set last month by the state Gaming Control Board.

Two key questions now:

Can the board's staff weed through that voluminous paperwork and declare during a hearing today whether the proper documents are now in hand? And will the board rule on a request from its staff to revoke the casino license for lack of development?

A spokeswoman for Caesars - which changed its name Nov. 23 from Harrah's Entertainment - said this week that it is up to the board to decide if the documents met the criteria set last month.

A board spokesman said the documents include petitions to change who controls the casino project, to extend the deadline for opening the casino and to change the casino's design, along with loan documents and partnership and management agreements.

Stephen Cozen, an attorney for the local investors, said the documents show bank commitments from Citibank and Credit Suisse for $200 million in debt financing.

The paperwork also shows guarantees from Apollo Global Management and TPG Capital, two equity firms that took over Harrah's in January 2008, to financially back up the project-development costs, Cozen said.

"The fact is we gave them everything that they asked for and then some," Cozen said of the board, noting that five law firms spent 30 days creating the documents. "And also exhibits up the kazoo. It would take somebody a long time to go through it."

Cyrus Pitre, director of the board's Office of Enforcement Counsel, said last month that it could take 60 to 90 days to examine and understand the information.

The board on Nov. 18 considered a request from its staff to revoke the casino license but delayed voting on the issue until this month to see if the local investors could close the deal with Caesars, which would manage the casino under its Horseshoe brand.

A Caesars attorney last month said the casino could open by fall 2012 if the board grants another extension.

Board members have grown increasingly frustrated with the project, which first faced legal battles from Mayor Nutter's administration and then stumbled badly through an attempt to relocate the casino to Center City.

A plan by casino developer Steve Wynn to rescue the project earlier this year left the local investors stunned when he dropped out of the deal six weeks after confirming his plans.

The local investors and Caesars have one major factor in their favor: Although some board members want to yank the license after four years of delay, their staff warned in March that it would take at least four years from the start of revocation to the opening of a casino by a new licensee.

The South Philly license was approved Dec. 20, 2006.

A review of the reasons listed by the board then for the approval shows that many factors have changed in the past four years.

_ The board said the casino had an "excellent design." That design has been replaced.

_ The board called the Mashantucket Pequot Tribal Nation, which was working with the local investors and planned to manage the casino, a "strong partner."

The tribe, which runs two casinos in Connecticut under the Foxwoods brand, fell into years of financial troubles and now is little more than a passive investor.

_ The board was enthusiastic that 42 percent of the casino profits, controlled by trusts for three local investors, would go to charitable causes at a predicted rate of $300 million over 10 years.

Cozen said that formula has been reworked so that it includes 2 percent of the casino's net revenues plus the profits for those three investors. Asked if that means more or less money for charity, Cozen answered: "Much more. Not even close."

_ The South Philly casino had no connection to Atlantic City casinos, so there was no incentive to lure gamblers from here to there, where the tax rate is lower.

Caesars has four casinos in Atlantic City.

A recent Securities and Exchange Commission filing by Caesars Entertainment made it clear that the future was full of uncertainty as well. The company said three weeks ago that it was "highly leveraged" with $22 billion in debt as of Sept. 30 that costs $1.9 billion per year to maintain.

That, the company reported, could "restrict us from making strategic acquisitions, developing new gaming facilities, introducing new technologies or exploiting business opportunities."

And the board itself faces some uncertainty. Two members, Kenneth McCabe and Jeff Coy, are wrapping up their third two-year terms and can't be reappointed because of term limits. Two more members, Ray Angeli and Gary Sojka, have terms expiring but could be reappointed.