Scott Van Voorhis
When your business is gambling and you have more money than the old man upstairs, you have the option to do something most developers only dream of. You can thumb your nose at pesky project opponents and start building, brushing off lawsuits and appeals as if they were so many fleas.
Such is the case with Las Vegas billionaire Steve Wynn and his planned Everett gambling resort and the Mashpee Wampanoag Tribe, soon to be flush with its own mountain of casino winnings.
Wynn’s for a $2 billion gambling resort on the banks of the Mystic River faces a pair of stubborn legal challenges, from both Somerville and Mohegan Sun, an aggrieved former competitor for the right to build a casino in the Boston area.
For their part, the Mashpees, backed by one of the richest casino empires on the planet, have been hit with a lawsuit from the neighbors of their proposed Taunton Taj Mahal.
For most developers, even half-credible lawsuits can be a disaster, potentially stalling projects for years as banks and other potential lenders run for cover at the first hint of a court filing.
But Wynn and the Genting Group-backed Mashpees are turning the tables on these time – honored harassment tactics, telling their opponents to go pound sand as they prepare to barrel ahead with construction.
Calling Opponents’ Bluff
There are a number of notable projects that have been stuck in legal limbo for years after getting hit up with a lawsuit.
NorthPoint, Fan Pier and plans for a huge air-rights project next door to Fenway Park are just a few that have either faced time-consuming lawsuits or legal threats.
Battling over development projects has long been a blood sport here in Massachusetts, especially in Greater Boston. And firing off legal challenges in hopes of stalling a project – and maybe even ultimately killing it after the market cycle moves on – are as Boston as the Red Sox and our unpredictable and too often crappy weather.
If you are in the business of building luxury condos or upscale corporate suites, nailing down financing for the project and ensuring that it sticks is more than half the battle. A bank bails or a big anchor tenant walks out, and you’re dead meat.
But when you are in a business where even a corrugated shed packed with slot machines can pull in millions of dollars a month, you can both hire the best lawyers around and take gambles most developers would blanch at.
Simply put, Wynn and the Mashpees have the bucks to play this game their own way, and they are calling their opponents’ bluff.
Time Is Money
Wynn’s decision to push forward with construction this summer of his $2 billion high-rise casino and hotel has been under covered by the local media, especially when it comes to the implications of such a move.
Wynn’s lawyer is slated to face off in court this week with Somerville’s legal eagles at a hearing on the city’s challenge to the waterfront building license state officials recently granted to the casino developer.
Somerville will likely lose its appeal before an administrative judge at the Department of Environmental Protection, taking its case to state court.
But Wynn isn’t willing to sit and wait while his lawyers grind the case out over the next year or two in state court.
Rather, the developer plans to start construction this summer – even if the key approval is appealed, his spokesman has made clear. And that’s not even counting the separate legal challenge by Mohegan, which is trying to upend the Massachusetts Gaming Commission’s decision back in September 2014 to grant Wynn a license to build a casino in the Boston area.
Now Somerville’s case isn’t the strongest – it looks more than anything else like an attempt to squeeze a bigger mitigation package out of Wynn than anything else. And Mohegan appears unlikely to be able to overturn the gaming commission’s decision, which would require convincing a judge that process under which it was made was arbitrary and corrupt.
Say what you want, but the gaming commission, chaired by civic-minded businessman and one-time UMass dean Steve Crosby and featuring a former top New Jersey State police bigwig, hardly seems like the traditional, sleepy, hack-packed state board.
Still, Wynn could theoretically open the doors of his gambling palace in 2018 after it is complete, only to have to shut them. It’s an extremely remote possibility, sure, but as long as litigation is hanging out there, nothing can be ruled out.
Wynn, though, is clearly willing to let his casino be delayed another two years to 2020, losing out on as much as $1.6 billion in revenue.
Genting, the Malaysian casino giant bankrolling the Wampanoags’ plans, has apparently made the same calculation, with the tribe having launched construction in April.
The neighbors aren’t happy, having filed a legal challenge to the Department of Interior’s decision to create an official reservation in Taunton on which to build a casino.
The conventional thinking is that the Interior Department’s decision is going to be very hard to overturn in court, with lawyers at the Bureau of Indian Affairs having spent considerable effort making the ruling appeal proof.
That said, similar appeals have stalled tribal casino plans around the country for years.
But not this time around. Genting and the tribe are barreling ahead full-speed, with plans to open a first phase next year in 2017, though whether that will be more than a building with a bunch of slots and table games remains to be seen.
Like Wynn, Genting and the Wampanoags don’t want to pass up on the hundreds of millions in gambling revenue they would lose by waiting to build until after the legal clouds have cleared.
In fact, the strategy of a phased roll-out could allow the tribe and its backers to pay for the project as it is developed, giving a whole new meaning to the pay-as-you-go concept. Revenue from a stripped down slot parlor could then be used to pay for the hotel, water park and other amenities long touted as part of the project.
Time is money in any business, but especially in the casino world, where the potential profits are simply huge.
The old delaying tactics may have been enough to derail office and condo tower builders, but they are clearly no match for billionaire casino developers who have money to burn.
