Regulators force Foxwoods casino back to river

HARRISBURG - State regulators yesterday forced the Foxwoods Casino project back to the Delaware riverfront in South Philadelphia, declaring it a "fool's errand" to even consider pursuing an alternative site in Center City.

The unanimous vote by the seven-member Pennsylvania Gaming Control Board derailed an effort by Foxwoods investors to open their slots parlor in the old Strawbridge & Clothier store at 801 Market St.

The board extended Foxwoods' expired gaming license until May 2011, but stipulated that 1,500 slot machines must be operating by then. In addition, the project must be similar to that approved by the commissioners in December 2006. The original proposal called for a $670 million, 700,000-square-foot casino with restaurants, entertainment venues, and, eventually, a high-rise hotel.

"We do not want to hear that there are other sites that you want to look at," said Gregory Fajt, the gaming board chairman.

"We expect you to move and move quickly, or we'll yank the license," he added.

After the vote, F. Warren Jacoby, an attorney for Foxwoods, said the investors were "prepared to . . . move forward on the site" in cooperation with the city and state. The group, he said, has spent $160 million to buy the South Philadelphia property on Columbus Boulevard, acquire a state slots license, and develop plans.

"What do they have to show for it?" he asked. "They have their license, but they've been stymied at every turn."

At the hearing, casino opponents chanted "Pull the plug! Pull the plug!" and vowed to continue fighting the project. "There's a greater swelling of opposition," said the Rev. Robin Hynicka, pastor of Arch Street United Methodist Church.

City Councilman Frank DiCicco, whose district includes the South Philadelphia site, said the board's decision to keep the project in a congested commercial stretch "damages Philadelphia's fabric."

In a statement released late yesterday afternoon, Mayor Nutter said he was "disappointed" in the ruling and described the river as a "bad site" for the casino.

Nutter took office in 2008 with a commitment to protect the Delaware waterfront from big-box casinos, and preserve open space and public access. City agencies held up permits. City Council also tried to block the project.

Opposition was so strong that a year ago, Gov. Rendell called a summit with Nutter, city lawmakers, and Foxwoods investors.

In a compromise, the investors said they would leave the waterfront for Center City, looking at the Gallery before settling on the Strawbridge site in February. But the plan stalled when Gramercy Capital Corp., owner of half of the building, objected to a casino on two levels.

Brian Ford, an executive of a partnership representing a key group of local investors, testified yesterday that Foxwoods would have to build a waterfront casino in phases, starting with an interim facility - much like the approach of the SugarHouse project in Northern Liberties and Fishtown.

"We're not trying to do a bait and switch," Jacoby said, "but we are trying to respond to realities of current financing and economic conditions."

In 2006, Foxwoods investors - including charitable family trusts for developer Ron Rubin, entrepreneur Lewis Katz, and Comcast-Spectacor chairman Ed Snider - won one of two slots licenses awarded in Philadelphia. At the time, the group had financing lined up. But with the collapse of credit markets, those commitments have disappeared, and new lenders will have to be found, Ford said.

Originally, the Mashantucket Pequot tribe, which operates the Foxwoods mega-casino in Connecticut, was going to manage the casino, but its role has diminished. Any casino would be "Foxwoods" in name only, not managed by the financially troubled tribe.

In extending the license, lawyers for the gaming board recommended 10 conditions, including the delivery of a design in three months and a financing plan in six.

Jacoby said he did not object to the substance of the conditions, but the timetable. "That's a concern we have," he said.

During an hour of testimony and questioning yesterday, several commissioners rebuked Foxwoods for not moving forward in October 2008, when the Pennsylvania Supreme Court appointed a special master to resolve any disputes with city agencies.

Jacoby told the board that the appointment came after Foxwoods had heeded the governor's and mayor's requests to leave the waterfront. He said that at that point, it would have been the "utmost in arrogance" to ignore their concerns.

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