Mohegan Sun named as operator of proposed 8th & Market casino

The parking lot on the corner of 8th and Market Streets is the proposed location for Market East Associates L.P., one of the six applicants for the second Philadelphia casino license, who announced Wednesday that Mohegan Sun will be a partner and operator. ( Hillary Petrozziello / Staff Photographer )
The parking lot on the corner of 8th and Market Streets is the proposed location for Market East Associates L.P., one of the six applicants for the second Philadelphia casino license, who announced Wednesday that Mohegan Sun will be a partner and operator. ( Hillary Petrozziello / Staff Photographer )
Posted: February 07, 2013

Market East Associates L.P., one of the six applicants for the second Philadelphia casino license, announced Wednesday that Mohegan Sun will be a partner and operator for its proposed 8th and Market Streets casino.

Mohegan Sun, which owns a flagship casino in Uncasville, Conn., and a racetrack-casino in Wilkes-Barre, last August signed a similar agreement to manage and own part of Resorts Casino Hotel in Atlantic City.

"Mohegan is one of the nation's top entertainment and gaming destination operators," said real estate developer Ken Goldenberg of The Goldenberg Group, who assembled Market East Associates. "We couldn't be more excited about teaming up with them for the sake of developing a world-class gaming and entertainment project."

The casino proposal, previously known as "Casino Philadelphia" for the block of East Market Street between 8th and 9th Streets, is now called "MARKET8," said Goldenberg.

Other members of Market East Associates include David Adelman, president and chief executive of Campus Apartments; Ira Lubert, chairman and cofounder of Lubert-Adler Real Estate; Willie Johnson, founder and chairman of PRWT Services; and others. Lubert is majority owner of Valley Forge Casino Resort.

For Mohegan Tribal Gaming Authority, the tribal entity that owns Mohegan Sun, managing other casinos is a growing division under a subsidiary called Mohegan Gaming Advisors. The entity signed a management contract to operate and have ownership in Resorts.

Mitchell Etess, chief executive officer of the authority, said Mohegan Gaming Advisors has a very similar contract for the 8th and Market casino.

"We will be the operator and have equity in the project," Etess said Wednesday. "There are great partners involved and the project has a ton of potential.

"It's very similar to what we do. The location is incredible for the property. We will be able to capitalize into bringing more people into Center City and maximize revenue. It's right in our wheelhouse. It fits right in with our market synergies and will allow us to expand our presence on the East coast. It's a great opportunity for everyone involved."

Goldenberg called 8th and Market "the centerpiece of the East Market Street corridor.

"We have been waiting for just this type of opportunity," he said in a statement. He said the project's new name is meant to highlight the iconic location as central to the Center City district.

Etess - who will be testifying Tuesday before the Pennsylvania Gaming Board, as will the other five applicant groups, to make their first pitches for the city's final gaming license - said the tribe and Market East Associates had been talking for months and finalized a deal last month.

Five other applicants are vying for the right to build the city's second casino, including local developer Bart Blatstein, gambling mogul Steve Wynn, businessman Joseph Procacci, a partnership between Greenwood Gaming and Entertainment Inc. (owner of Parx) and Cordish Cos. (owner of Maryland Live!), and gaming company Penn National Gaming Inc. (owner of the Hollywood Casino brand).

All six have been tweaking their plans since submitting their applications in mid-November in preparation for Tuesday's presentations before the seven-member gaming board, starting at 9 a.m., at the Convention Center.

The gaming board is expected to spend several months vetting and reviewing the applications.

The eventual city license winner will enter a fiercely competitive gaming market with four local casinos already in operation. They are SugarHouse on Penn's Landing, Harrah's Philadelphia in Chester, Parx in Bensalem and Valley Forge Casino Resort in King of Prussia.

In addition, there are 12 casinos about 60 miles away in Atlantic City.

Last month's Pennsylvania revenue figures underscored the competitive landscape. Total revenue generated from slot machines at the state's 11 casinos was down 1.2 percent to $188.2 million from $190.5 million in January 2012, according to the state gaming board.

On a same-store basis (among venues that have been open a year or more, excluding Valley Forge), gross slots revenue was down 3.7 percent last month from January 2012, representing the fifth consecutive month of same-store declines.

Of the four in the local market, three reported monthly revenue declines from a year ago: Parx was down 4.6 percent; Harrah's Philadelphia down 4.4 percent; and SugarHouse down nearly 5.0 percent. Valley Forge Casino Resort opened March 31, less than a year ago.

"The weakness in Pennsylvania casinos is something we are seeing across other U.S. gaming jurisdictions," said John Kempf, a gaming analyst with RBC Capital Markets L.L.C. " We believe this is likely a function of recent tax hikes, higher gasoline costs, and more adverse weather conditions compared with the prior year."


Contact Suzette Parmley at 215-854-2855 or sparmley@phillynews.com.

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