By Josh Resnek
John Chesto, one of the chief business writer’s at the Boston Globe said everything would be the same. “No one will notice any difference,” when the Everett land and buildings are sold to the California real estate company buying them from Wynn Resorts.
I beg to differ.
Nothing will be the same.
That’s my take on the transaction.
On the other hand, does it matter who owns the land?
It sure mattered when the FBI, the State Police and the Massachusetts Gaming Commission investigators chased the FBT landowners because of alleged ties to the underworld, and for backdating of real estate documents to obscure hidden ownership of the land.
The ownership of the land meant everything.
Pursuing the true owners led to indictments and a trial and not guilty verdicts.
In one ongoing case, the government has not yet let go of Gary DiCicco, one of the original land owners who has been incarcerated, indicted twice (found not-guilty once) and is still being chased and badgered by the FBI and US Attorney’s office after almost dying from a massive heart attack six months ago.
The land was going for $75 million.
Then the MGC ordered the price lowered by $40 million – a bouquet to Steve Wynn for settling on Everett for the site of his magnum opus – the Boston Harbor Casino and Hotel.
That money was taken off the price by the MGC because the land carried a taint.
The casino license wasn’t granted until Wynn Resorts paid a $25 million fine for its alleged extralegal meanderings, leading some of us to believe the license was bought.
For a few days before the state’s payment deadline there was the wonder whether or not Wynn Corporation would pay so outrageous a fine.
We all should have known paying the fine was never in doubt.
Wynn Resorts would have paid double that fine.
Two days after the fine was paid, the casino opened to the public.
That was June, 2019 – recent history.
Now we are told the change of owners of the land means nothing.
We are told by businesspeople who understand leasebacks that Wynn has made a genius deal.
Who owned the land at the beginning was the ultimate question.
Now who owns the land means nothing.
“It is a very standard, smart deal,” said a source who understands such deals.
“What do they need the bricks and mortar for?” he asked.
Will the MGC approve the transaction?
We urge none of our readers to doubt for a second that Wynn’s license will remain secure and that the MGC will fall over backwards to approve the transfer of property.
It is a guarantee the transaction will be approved by everyone who has a hand, a stake, or an interest in casino gaming surviving and thriving in Massachusetts.
That means from the governor, to the Legislature, to powerful law firms, to banks and vendors, and to the major media, in this case, the Boston Globe, virtually no one would be crazy enough to stand in the way – even if it was to ask a sensible question or two.
The deal isn’t fixed but it is as done as done can be.
What about the city of Everett?
Does the city benefit from this deal?
I’m not sure.
Unless the Host City payment from the casino operators goes up from its $30 million a year, Chesto is right. The new owners of the land doesn’t change a thing.
Gaming goes on at Encore 24/7 the way money is printed by the US Treasury day and night.
The city of Everett, however, should have more leverage over Encore as Encore needs city permits and zoning changes and approvals, and commitments to share in the cost or pay the cost entirely of infrastructure for everything new it wants to build on the 13 acres across from the casino.
If the real estate company that bought the land and the buildings is paid $100 million in rent a year by the casino, then why should Everett be satisfied with $30 million – which is much less than $30 million because of 7% inflation. The $30 million becomes $28 million with inflation.
The Host Agreement isn’t looking so good after only 3 years of operation.
The Host Agreement payments to the city must go up every year just as the real estate company has negotiated with the Encore to pay more each year for 30 years as part of their lease.
This all presents an ideal time for the mayor to employ his special form of deal making skills with people who know something about buying licenses and not necessarily earning them.
Wynn Resorts has made a great deal for itself.
I am very happy for Wynn Resorts.
But what about us?
And what about the folks who were trampled in the Wynn stampede along the way?
And might it have been better if a giant shopping center had been built on the site, and taxes paid on the land.