Wynn withdraws Phila. casino plan

Posted: November 13, 2013

Las Vegas casino magnate Steve Wynn abruptly dropped his bid Monday to win Philadelphia's second casino license.

Wynn Resorts Ltd. said it withdrew its application in Philadelphia - touted recently as part of an effort to bring grand urban hotels back to life - to pursue business opportunities elsewhere.

"The board took a host of factors into consideration, including the Philadelphia market performance over the past year and the competition which will result from the recent approval of gaming" in New York last week, the company said in a statement. It said its officials had no further comment.

This is the second time Wynn has pulled out of an effort to build a casino in Philadelphia.

In 2010, Wynn agreed to partner with local investors to revive the Foxwoods proposal on Columbus Boulevard. After a week in the public eye, he withdrew.

This time, Wynn proposed a $926 million casino-resort on 60 acres of industrial land along the Delaware River in Fishtown. Wynn had an option to buy the land from New Hope builder James Anderson, who was surprised by the announcement.

"We have worked very hard with the Wynn team to put together what we believe was a really exciting resort idea for the city of Philadelphia and a really exciting idea for the revitalization of the waterfront," said Kevin Feeley, a spokesman for Anderson. "We were very disappointed to learn today that that project will not go forward."

One Wall Street analyst said the decision was not a huge surprise.

"We've always kind of wondered about why he was going in for this project in the first place," said John Kempf, a gaming analyst with RBC Capital Markets L.L.C.

Kempf found it puzzling that Wynn gave New York's authorization of full-scale casinos as a reason to pull out of Philadelphia.

"The view that we've taken is that whatever casino opens in Philly was probably going to draw directly from the Philadelphia market and not bring as much from New York," he said.

The possibility of new overseas markets opening up may have carried more weight, Kempf said: "With Japan heating up, there may have been a view that they wanted to preserve some capital to make sure they were ready to jump on that if that should happen."

Wynn is already spending $4 billion on the Wynn Palace on Cotai, his second property in Macau.

Wynn Philadelphia, as well as a proposal for Everett, Mass., represented a new concept for the developer: urban casinos.

In a conference call with investors last month, Wynn said the availability of casino licenses in Philadelphia and Boston meant that "the era of the grand hotel could come back again, beautiful hotels that people actually go and stay for the weekend, eat in fine restaurants, have meetings, and sure, if they want to gamble, they go down the hall and gamble in a room that's isolated. I like that idea, the grand hotel. I love the old, the heyday of the Waldorf Astoria and the Ritz and places like that."

Wynn remains in the running for a casino license near Boston, but the company has not yet been deemed suitable by the Massachusetts Gaming Commission. Wynn described that state's regulatory process as the most challenging and complex he has faced in 47 years in the industry.

His exit leaves five competitors for Philadelphia's second casino license, three in South Philadelphia and two in Center City, even as some industry observers voice doubt that there are enough gamblers in the Philadelphia market for another casino.

Three of the remaining bidders interpreted Wynn's decision as a good sign for them.

"As the most experienced regional gaming operator in the competition, we believe that our proposal has been the right size for the market from Day One. The withdrawal by Wynn today only further proves that," said Karen Bailey, spokeswoman for Penn National Gaming Inc., which has proposed a $483 million casino in South Philadelphia near the stadiums.

Reached at his casino architect's office in Las Vegas, Bart Blatstein, who has proposed a $700 million development at Broad and Callowhill Streets, said: "It shows that we've got the best project and the best location and the best plan."

Ken Goldenberg of the Goldenberg Group, which has proposed a $500 million casino on the 800 block of Market Street, said: "Market8 has always been confident that we are the best selection for this license. We have the best site, the best operator, and the best opportunity to have an immediate economic impact in the heart of Center City."

Efforts to reach Cordish Cos. and PHL Local Gaming L.L.C., the two other contenders, were unsuccessful.

Suitability hearings for the five remaining competitors are scheduled for late January.


hbrubaker@phillynews.com

215-854-4651 @InqBrubaker   

comments powered by Disqus
|
|
|
|
|