by Jason Schwartz | October 23, 2013 9:44 am
Editor’s note/spoiler alert: As the November issue of Boston magazine was going to press last Friday, Suffolk Downs announced a major change to its casino plans. We stopped the presses and were able to add a brief update to this story, which will appear on newsstands later this month. In the meantime, we’re publishing the story here online, in a form that differs slightly from the magazine version and which incorporates additional reporting conducted after the magazine went to press.
It was a muggy, overcast August day and Carlo DeMaria, the mayor of Everett, had called a press conference to pick a fight with Tom Menino. The affair was being held in the south of town, at the old Monsanto chemical site on the banks of the Mystic River. With shrubbery poking through the rock-and-gravel surface of the 37-acre plot, it looked like an overgrown moonscape, or, at the very least, the set of a bad dystopian action movie. The place has been all but abandoned for decades, too contaminated for use. But Las Vegas casino mogul Steve Wynn is proposing to clean it up in order to build a $1.2 billion gambling palace.
To escape the drizzle, the few dozen people in attendance crammed together under a small tent to hear DeMaria speak. “For too long, Everett has been treated like a second-class city to Boston and Somerville,” steamed the mayor, a big and wide fellow with a scrunched-up face and slicked-back hair. “We just want some respect.”
At issue was Menino’s recent claim that Wynn’s proposed casino site creeps over the Everett-Boston border. By the letter of the Massachusetts gaming law, that would have given the Boston mayor veto power over Wynn’s application for a casino license. The state will award only one license in the Boston area, and Menino, a loud supporter of a bid from the Suffolk Downs horse track in East Boston, would love to clear the field of any competition.
DeMaria thundered from the lectern that Menino would not be allowed to “bully the city of Everett.” For DeMaria, who, at age 40, has been mayor since 2008, this project is everything. His city and its 42,500 residents have long shouldered many of Boston’s burdens, serving as the region’s de facto engine room: Everett’s 3.36 square miles are crammed with industrial sites and scrap-metal yards, to say nothing of the 21 ExxonMobil oil tanks or the giant MBTA maintenance facility, without which the T could not function. And every week, tankers as long as three football fields carry millions of gallons of liquefied natural gas—a substance so volatile that an attack could spark a fireball a mile wide—down the Mystic River to dock in the city. The gas fuels an adjacent power plant that churns out 30 percent of Greater Boston’s electricity.
The plot where DeMaria stood is yet another example of Everett’s history of doing the region’s dirty work. In 1868 New England Chemical opened a plant there—sold to the Monsanto Company in 1929, after bouncing around between a few owners—that pumped out chemicals for the better part of a century. Those chemicals, shockingly, were not always disposed of properly. Today, the site is rife with arsenic, lead, petroleum waste, and the residues of sulfuric acid. Swimming in the water is not recommended.
Prosperity may not always be easily within reach in Everett, a city with a median household income of just under $50,000, compared with more than $60,000 statewide, but it is teasingly within sight. From where DeMaria stood, he could look in one direction and see the booming yuppie haven of Charlestown, and, in the other, resurgent Somerville and its new multimillion-dollar Assembly Row development.
It’s not as if Everett is unaware of the potential pitfalls of a casino: City officials have heard the arguments about traffic, crime, and gambling addiction. But standing at the podium, DeMaria could see opportunity around him where there used to be only an ugly, useless brownfield. And so the mayor had thrown himself behind the Wynn proposal, insisting that a rehabilitated Monsanto site, with a spectacular casino on it, would spark a renaissance in Everett and at last deliver success and stature to the blue-collar city. Behind him as he spoke was a giant red banner declaring, “It’s Our Time.”
As the press conference was about to conclude, a reporter, citing the struggles of other places that pinned their turnaround hopes on gambling, piped up with one last question: What will make this casino proposal different from all the others that have promised civic redemption, but failed?
“The difference,” DeMaria replied, “is Steve Wynn.”
“You’re telling me there’s no better part of Everett than where I was?” Steve Wynn asks. He’s talking about the proposed casino site. No, I explain, it’s not all quite like that. Sitting in his “villa” at the Wynn Las Vegas—essentially an apartment built into the hotel’s first floor—he tells me he has visited town three times and not seen much besides the site. “You can see now,” he says, speaking of Everett, “I know not very much.”
Dressed in black leather boots, navy pants, and a short-sleeve shirt with a couple of buttons open, exposing a tuft of chest hair, the billionaire Wynn gets up to show me around. On the far wall hangs a Picasso called La Femme au Chat. Across from it is another, the artist’s self-portrait Le Marin, which Wynn got as part of a swap for Le Rêve, the Picasso masterpiece he restored after accidentally sticking his elbow through it seven years ago. And nearby is Lichtenstein’s Deep in Thought, a colorful pop-art painting of a woman holding her head in her hands. That, Wynn says, “is a position I’m frequently in, ’cause I sit like this with a felt-tip pen, ’cause I’m a designer.”
In fact, throughout his nearly 50-year career, Wynn has been a visionary. From the moment the first neon light flickered on in the Nevada desert, casino operators had thought of their buildings as just four walls to hold slot machines. Wynn’s idea to turn them into palaces of opulent design and over-the-top amenities has been credited with revolutionizing Las Vegas. When he opened the Mirage in 1989, the unheard-of $630 million price tag was called reckless, but his bet paid off when gamblers flocked to the luxury resort. The $1.6 billion Bellagio repeated that success in 1998, and then, after MGM Grand launched a takeover of Wynn’s company and bought him out two years later, he started a new one. Wynn Resorts opened the $2.7 billion Wynn Las Vegas in 2005, adorning the Strip with its undulating bronze glass exterior. It’s since been joined by a sister resort next door, the Encore, and the Wynn Macao, in China. The 71-year-old Wynn is fond of pointing out how his buildings, heavy on glass and natural light, win top honors and accolades. And how 60 percent of his company’s revenue comes from non-gaming sources, such as hotel rooms, nightclubs, restaurants, and spas. Of course, for all the high-minded talk of choosing aesthetics over Las Vegas schlock, Wynn’s hotels are still subsidized by his take from the casino floor, where the costs are low and the margins are high. Even if downplayed, the slot machines remain vital.
Wynn leads me into the next room in his villa, where he keeps his drafting table. It’s here that he designed the Wynn Everett concept, which borrows heavily from another building he’s proposed for Philadelphia. Unveiled in March, the Everett plans call for a 551-room hotel tower featuring his signature “Wynn bronze” glass. At its base is the casino, with a long retail mall extending out from it, along with a lush indoor “winter garden” and an outdoor park on the Mystic waterfront. Greater Boston, Wynn tells me, “could use one real lulu of a hotel.” With a casino there to churn out a handsome profit, of course.
There is, however, no guarantee that he’ll ever get a shovel in the ground. When Massachusetts legalized casinos in November 2011, it split the state into three zones: west, southeast, and east, including Greater Boston. The state gaming commission is allowed to issue just one casino license for each region, and has encouraged multiple bidders to compete against one another. Final applications are due December 31, and the five-member commission’s decision on who wins each license is expected to be delivered around April 2014.
The presumed favorite to win the Boston license has long been the politically connected Suffolk Downs, which partnered in 2011 with Caesars Entertainment to create a proposal for a $1 billion project that includes a casino, 450 hotel rooms, restaurants, shops, and a renovated horse track. But that has not deterred Wynn, who for years has wanted in on Boston. Like many developers, he believes that the area’s wealth, tourism, and international appeal make it one of the last great untapped gambling markets in the country. He started looking here as far back as late 2007, when it first appeared that the state might legalize casinos. More recently, he poked around the Seaport with the developer Joe Fallon (Menino quashed that idea immediately, Wynn’s lobbyist says), before buddying up with Patriots owner Bob Kraft in late 2011 to pitch a casino beside Gillette Stadium in Foxboro. That bid—a direct challenge to Suffolk Downs—appeared to have a legitimate shot, but when town residents revolted five months later, electing anti-casino selectmen to oppose the project, Wynn had to go slouching back to Vegas. A developer named David Nunes was still out there with a proposal for a casino in Milford, but Gary Loveman, the Ceasars CEO, felt triumphant. In a Globe interview two months after Wynn’s retreat, Loveman dismissed Nunes’s suburban concept and said he doubted any other serious competitors would emerge in the region to challenge Suffolk Downs. “I think it’s unlikely [another bidder will surface] because the cost of now mounting a bid is substantial,” he told the paper. It all seemed in the bag.
DeMaria has long viewed the Monsanto site as key to Everett’s reinvention. It may be contaminated enough to grow you a third arm, but it also sits on prime waterfront property, just across the bridge from Boston. If he could just unlock that gateway, DeMaria has always believed, prosperity would filter up through the rest of the city.
In 2011, well before anyone in Everett had even said the word “casino,” DeMaria convened a task force to create a master plan for the area. Simply finding another industrial use for the site, or throwing down some big chain stores, as had been done on a neighboring lot, wouldn’t do. DeMaria wanted to take advantage of the waterfront and bring it to life. A variety of mixed-use development concepts were hashed out, but there was always one problem: the pollution. It was going to cost tens of millions of dollars to clean the site. No developer was about to make that sort of investment. And environmental grants and loans from the government tend to come a few hundred thousand dollars at a time—it would have taken years to cobble enough together. “For anything to happen substantially on that site in this area,” DeMaria said, “I knew that it would take decades.”
Then, DeMaria said, he got a call last year from Las Vegas Sands, the casino behemoth controlled by billionaire Dorchester native Sheldon Adelson, saying that the company was interested in the Monsanto site. (Sands, which has not been active in the Massachusetts market, declined to comment on DeMaria’s account.) Nothing came of it—but DeMaria got an idea.
Soon after, on November 8, 2012, the Herald ran a story with the headline “Everett in Talks with Hard Rock for Casino.” The story was overblown—today, DeMaria admits he never personally spoke with Hard Rock. But the mayor was hardly unhappy to see the idea of an Everett casino publicized so prominently. After all, a casino would be one of the few businesses lucrative enough to justify the developer paying millions in environmental cleanup. “We wanted to talk about it,” DeMaria said. “We wanted to see what the possibilities were.”
Sure enough, the article caught the attention of executives at Wynn, who despite being spurned in Foxboro, still had their eye on Massachusetts. They called Steve Tocco, the president and CEO of the Boston lobbying firm ML Strategies, which they’d hired to represent their interests locally. Tocco, in turn, reached out to DeMaria.
From there, things moved quickly. Wynn CFO Matt Maddox and general counsel Kim Sinatra traveled to Everett for a mid-November meeting at City Hall. “They put me on the phone with Mr. Wynn, who was on his plane flying over to Monte Carlo to meet the prince for lunch,” DeMaria recalled. He said Wynn told him that he’d been stung by the rejection in Foxboro and asked whether Everett would be more receptive. DeMaria replied that the people of Everett would surely give him a fair shake.
DeMaria, it’s safe to say, was already a Steve Wynn fan. “Steve Wynn is, to me, the premier hotel developer in the world,” DeMaria said in late August, a couple of weeks after the press conference, sitting in the Wynn office in Everett beside a model of the planned project. The mayor has family in Arizona, and for the past 20 years, he and his wife have made regular side trips to Vegas. “Usually we’d stay at the Bellagio,” he said. “Back before the Bellagio I think it was probably the MGM, but then when the Bellagio was built, it was the Bellagio. And the expansions have always been great. I mean, the employees are always good. Just the whole experience. ”
A couple of weeks after the preliminary meeting at City Hall, Wynn himself arrived for an official visit. A cavalcade of black SUVs rolled down Horizon Way—renamed a few years back from “Chemical Lane”—and onto the Monsanto site. Wynn wasn’t impressed. “Train tracks, tanks,” he recalled, “a bus station, industrial place.” As Wynn’s shoes crunched down on the gravel outside his car, a commuter-rail train rumbled by, blasting its whistle. Wynn was horrified, imagining trains keeping his hotel guests up at night and distracting them during the day. DeMaria’s staffers were also horrified, imagining that Wynn was about to get right back in his car and go home.
Once the train passed, though, Wynn refocused on the gorgeous view of the Boston skyline across the river. From there, all he saw was the potential. The building could be soundproofed to take care of the whistle, he figured, and arrangements could be made for it not to blow at certain hours. The unsightly industrial scenery could be covered up. “We berm and we landscape and now you walk along that property, you’ll think you’re in Central Park,” he explained. “You won’t see a thing.” A few weeks later, in December, Wynn bought an option on the Monsanto site.
Now it was time to negotiate. The Massachusetts gaming law calls for each casino applicant and its town to create what’s called a host-community agreement, governing how much the casino will pay the city, what traffic improvements will be made, how many jobs will be added, and often much more.
On one side was Wynn Resorts, a multibillion-dollar corporate entity. On the other side was DeMaria, a longtime local politician and self-described baker who owns four Honey Dew Donuts franchises. The matchup was somewhat different across the river, where Menino was in negotiations with Suffolk Downs and Caesars. The mayor of Boston assigned top aides to the project and brought in professional negotiators from the downtown law firm Nutter, McClennen & Fish, plus all sorts of other engineers and consultants. And why not? The gaming law stated that Suffolk Downs, as the casino applicant, had to pay all of the city’s expenses for the process.
Everett brought in a few outside lawyers, but DeMaria’s answer was to draw his top aides in close and handle most of the negotiations himself. Primarily, he dealt with Wynn’s executives, Matt Maddox and Kim Sinatra. “They’d done their research in the market,” DeMaria said. “We started with Matt’s numbers and we went north from there.” He added, “They really try to keep Wynn from talking about money, ’cause I guess he has maybe a soft spot for residents.”
After a while, Maddox and DeMaria reached an impasse over how much cash the casino would pay to Everett—DeMaria wanted more for the city, Maddox said no—and it was left to Wynn to come in and try to personally finish the deal. “There’s a number that’s real,” Wynn told me, pacing around his villa. “And you go past that number”—he kicked at the ground—“you’re a moron, you’re about to destroy the enterprise.”
Wynn by this time had walked over to my seat, and he leaned directly over me as he spoke: “At that point, the mayor and I have to trust one another. Do you think that Steve Wynn is a bullshitter? Do you think Carlo is a bluffer? Are we both trying to do good for our constituencies?” he said. “Somebody’s gotta trust somebody somewhere. And credibility matters for that reason.”
It took five months, but in April the deal was struck. What emerged was a 20-page document, outlining in plain language the relationship between the city and the casino company—provided, of course, that Wynn wins the gaming-license sweepstakes. Wynn Resorts would pay Everett a $30 million one-time fee, plus $25 million each year in impact fees and payments in lieu of taxes, with that number increasing by 2.5 percent annually. Wynn also pledged to “give reasonable preference” to Everett residents when hiring for both construction and permanent jobs. Traffic improvements to Broadway, Santilli Circle, and Sweetser Circle were included as well. The environmental remediation section, meanwhile, is just 36 words long, but here’s an even shorter version: Wynn Resorts says it will clean up the site. The company confirmed to me, in a statement, that it will not ask for public money.
A few weeks later, when the city of Springfield and MGM Resorts released a host-community agreement as part of a bid for the western-region license, the document was more than 100 pages long. Jamie Errickson, Everett’s planning chief, and Dave Rodrigues, a top DeMaria aide, laughed at that agreement’s length. Whereas Springfield had specifically allocated money to different projects in its agreement, Rodrigues said, Everett wanted more flexibility. He and Errickson explained that some details will be worked out with Wynn later. They told me they were not concerned that those provisions wouldn’t be enforceable by law. “Part of this is about building a true trust between the public and private partnership we’re trying to do here,” Errickson said.
“We negotiated a great deal,” DeMaria said. “It’s better than what is there now.” He said he expects that there will be critics, but that doesn’t bother him. “Anyone can play Monday-morning quarterback,” he continued. “I used to bake for a living, and my aunt would always say when I would bring out the honey dips or something, ‘Jesus, can you put more glaze on it?’ Well, you know, why didn’t you do it then if you want more glaze on it?”
With DeMaria and Wynn agreed on a deal, the next step was a June referendum, at which the city’s residents would decide whether to allow the casino. In advance of the vote, Wynn poured some $405,000 into campaigning and get-out-the-vote operations. As part of the effort, the company sent a 50-page book to registered voters in Everett. The first dozen pages focused on Wynn himself, with the rest dedicated to his company’s accomplishments. In the back was a DVD, complete with a dramatically narrated biography of Wynn. (“Even as a boy, Steve had big ideas.” ) He just wanted to provide jobs and build a gorgeous, grand hotel, he explained over and over again, and, oh, by the way, if there’s a casino attached, well, what was the difference? But really, Everett wasn’t being asked to buy into a casino; it was being asked to buy into Steve Wynn.
The referendum passed with unheard-of support: 86.5 percent. For context, a poll from last year found that 81 percent of Massachusetts residents are Red Sox fans. In Everett, Steve Wynn had become more popular than the Red Sox.
Suffolk Downs has been going out of business since at least the 1980s. The 78-year-old track loves to highlight its colorful history, but the truth is, it’s been a long time since horse racing was a viable business in Boston. For the past two decades, Suffolk has limped along, hoping and praying for the big day when it might be able to expand its gambling options beyond horse betting. “Slot machines are very important to us—they can be our salvation,” former track CEO Bob O’Malley told the Globe in 1996. Menino has consistently supported adding slots to the track—it’s co-owned by his buddy, the concessionaire Joe O’Donnell—but it wasn’t until 2007, when the State House debated legalizing casinos, that visions emerged of a full-fledged casino resort. Those plans arrived with Richard Fields, a veteran of Trump casinos, who bought 42 percent of the business, making him Suffolk Downs’ largest shareholder.
Gary Loveman, the CEO of Caesars, has lusted after expanded gambling at Suffolk Downs almost as long as anyone who actually works at the track. A former Harvard Business School professor, his primary residence remains in Wellesley. “I’ve been pursuing that site for 13 years,” he told me. Suffolk Downs is the ideal place for a casino, Loveman said, because of its location beside the airport, its Blue Line access (no subway or trolley runs to Everett), and its 163 acres (126 more than Everett has). So it was no surprise when, in April 2011, seven months before Governor Deval Patrick even signed the casino bill, Suffolk Downs and Caesars announced they would go it together. Caesars would buy into a small share of the track—4 percent—and be contracted to design and operate the prospective casino.
In its slogan, Suffolk Downs calls itself “The Hometown Favorite.” As such, it began grinding out the meetings and glad-handing it would need to build community support. “We’ve literally had hundreds of public meetings and thousands of conversations over the course of the last six years,” said Chip Tuttle, the track’s chief operating officer. There were meetings with local businesses and meetings with minority groups and meetings with veterans. Meetings in Boston and meetings in Chelsea and Revere and Winthrop and Malden and even Gloucester. “If someone had a rubber-chicken dinner, we were happy to be there to tell them about the proposal,” Tuttle said.
In Massachusetts politics, where the personal touch has always made a difference, the approach seemed to be working. Jay Ash, the city manager of Chelsea, which is sandwiched between Everett and Eastie, said he’s throwing his city’s full weight behind Suffolk Downs. “I have a great relationship and even a greater respect for the people who run Suffolk Downs,” he said. “The Wynn people, I don’t know, I have no relationship with them. I’ve never met any of the principals.”
In many ways, Caesars was shaping up to be the perfect foil to Wynn. The operator of 54 properties, the company is the casino version of a national big-box chain, dependent on mid- and low-market gamblers for much of its revenue. The company’s original DNA comes from the downmarket Harrah’s chain, which swallowed Caesars in 2005 and took its name. Bo Bernhard, the executive director of the International Gaming Institute at the University of Nevada–Las Vegas, said that Caesars’ urban model in cities like Cincinnati, New Orleans, and Cleveland is the best-developed in the industry. It’s based on striking partnerships with local businesses, restaurants, and hotels, and integrating them into their massive customer-loyalty rewards network. For example, when their own hotels fill up, Caesars will book guests in other local hotels to make sure that prospective gamblers get to town. Or, if you spend enough time at the slots, the casino may comp you a meal at a local restaurant. Or gift you tickets to a show downtown. In December, Suffolk Downs and Caesars announced a deal with the Citi Performing Arts Center, operators of the Wang, Shubert, and Colonial theaters.
Caesars, though, has never built a luxury casino resort as grand as what it designed for Boston. Or, for that matter, one on par with Wynn. The company saw Suffolk Downs as a chance to build its credibility in the high-end market, working with Elkus Manfredi Architects to dream up interiors complete with high ceilings, chandeliers, gold-colored doorways, and yes, a Roman statue or two.
Bernhard confirmed that, when it comes to design, everyone is aspiring to match Wynn, whose reputation is top-notch: His resorts in Las Vegas and Macao are where employees most want to work and guests most want to stay. But they are designed as cloistered oases, places guests should never want to leave. This foray into urban, nontraditional gambling markets—Wynn is also trying to build in Philadelphia—where the casino must try to leverage local amenities, is new to him, and much more Caesars’ specialty.
Loveman, regarded as more of a numbers wiz than a visionary, said that Wynn’s reputation for design mastery is a product of simply outspending the competition. But with both the Wynn and Caesars designs projected to cost roughly equal amounts, Loveman insisted, “Both of them are going to be of equal quality.”
Nevertheless, a few months after Wynn’s entry, Suffolk Downs announced that it was upgrading its plans. The track revamped the property’s entrance to provide a more bucolic approach and added green space where vast parking lots had been—all in the hopes, apparently, of creating a resort of even more equal quality to Wynn’s.
With Menino onboard as Suffolk Downs’ biggest cheerleader, the host-community agreement between Boston and the track seemed like it would be a formality. But the mayor was intent on wringing every last penny he could for the city. The negotiations dragged on for months, and into the summer.
What Boston fears most is a casino going just across the river in Everett, a scenario in which Boston gets all of the spillover headaches of a casino but very little of the money to help deal with them. That being the case, said Father Richard McGowan, a Boston College economics professor and gaming expert who assisted the city with negotiations, it took the momentum behind Wynn’s proposal in Everett to finally spur Boston toward a deal. “I think the mayor all of a sudden realizes Wynn’s got a legitimate thing here,” McGowan said. “We better get together and get this done.”
The agreement that finally materialized in August was a table-thudding 186 pages. The track agreed to pay Boston $33 million up front, plus $32 million annually. If Suffolk Downs hits certain gaming-revenue benchmarks above $800 million per year, the city gets additional money. Despite Menino’s initial objections, the deal also allows Suffolk Downs to build the project in phases, first opening the casino and a renovated track grandstand, then the resort hotel. Suffolk Downs also spills into Revere, and it soon after struck a host-community agreement with that town, too. Both cities’ referendums are scheduled for election day, November 5. Coincidentally, DeMaria is up for reelection in Everett the same day, and is expected to win easily.
So why was the Wynn deal so short and the Boston deal so long? “It looked like they had thousands of consultants providing lots of input and lots of lawyers. If you get down to the substance, ours was very clean and clear,” Maddox, the Wynn CFO, said. “We don’t need to add definitions for definitions.”
Wynn was more succinct: “You get the lawyers involved, everybody’s getting paid extra, and I say bullshit. Kiss my bippy.”
While it’s true that the Boston deal does have pages and pages of legal definitions—remarkably, including one for “mayor”—it also contains a level of detail that goes significantly beyond Everett’s. Most notably, Suffolk Downs must spend $50 million annually on goods and services in Boston, with $5 million of that in Eastie. On traffic, the Wynn-Everett deal identifies a handful of projects. The Suffolk Downs–Boston deal itemizes them and spells out how much each will cost, requiring at least $45 million to be spent on transportation improvements. There are penalties for missed deadlines and payments and even a clause requiring that Suffolk Downs garage all its vehicles within city limits, so that Boston can collect the excise tax. The track also must build a 5,000-square-foot greenhouse on the casino roof.
“The difference is ours is a long-term partnership,” Tuttle, the Suffolk Downs COO, said. “It’s not a shotgun marriage.”
Whatever else they do, the agreements speak to two different approaches: For Boston, it was maybe trust, definitely verify. For Everett, it was trust.
That’s most apparent on jobs: Both agreements pledge to provide 4,000 permanent new ones, with the Wynn-Everett agreement stating that local residents will be given “reasonable preference.” The Suffolk Downs–Boston deal contains similar language, but it also requires that the track exclusively advertise positions four to eight weeks in advance in local papers. Residents of Boston (and neighboring communities) would then be given the first shot at applying during a special advance period. (In perhaps the most Menino-esque bit of minutiae, the deal states that Suffolk Downs must install 25 computers in spots around Eastie, plus two at the casino itself, so that Bostonians who lack Internet connections can look up job information and apply.) If Suffolk Downs fails to make “best efforts” to ensure its workforce is composed of at least 50 percent Boston residents, it would count as one of the many defaults for which the track could be fined $25,000 per day.
DeMaria and his staff said there will be extra protections worked out with Wynn to make sure Everett residents get hired. “When talking to Mr. Wynn,” DeMaria said, “he had no problem when they were doing their hiring for positions to have representatives from the mayor’s office to sit on the interviewing process. So we’re going to hold them to that. That was one of those handshake agreements me and Mr. Wynn had.”
DeMaria’s assertion of off-the-books deals with Wynn raises an entire fleet’s worth of red flags, especially among critics who suspect that the politically connected will be first in line for casino jobs. When I asked Wynn’s people about DeMaria’s “handshake agreement,” they said they had no idea what he was talking about. “If it was me, I don’t remember making that statement,” Wynn said. Maddox did not either. Neither was aware of any other handshake agreements.
Then, in October, all hell broke loose. For months, investigators from the Massachusetts Gaming Commission had been performing background checks on companies and high-level people involved in bids, asking questions, getting answers, and then going back and asking more questions. “A giant pain in the butt,” is how Wynn described the application process, adding that he thought investigators were looking for “information that’s ridiculous.”
On October 2, investigators let Suffolk Downs know that there could be a problem with its partner, Caesars. The state was concerned about a variety of issues, including the company’s massive debt and a scandal in which a gambler named Terrance Watanabe blew $189 million during a yearlong gambling spree at Caesars’ casinos in 2007. But most alarming to the investigators was a deal Caesars made just last March to partner with the Gansevoort Hotel Group, a New York–based boutique outfit, to open a hotel in Las Vegas. “Things came to light that were previously unknown to us,” one Suffolk Downs official said. According to a source familiar with the situation, the trouble stems from Gansevoort part owner Arik Kislin. In March 2012, a year before Gansevoort partnered with Caesars, the New York Post reported that Kislin, described as a “hipster real estate developer,” had past ties to a company linked to the Russian mob. Kislin has denied the allegations.
Worried that years of careful planning could be upended, the next day Suffolk Downs hired former state Attorney General Thomas Reilly to perform his own review. “He was able to ascertain the seriousness of the concerns,” the Suffolk Downs official said.
On Friday, October 18 at 5 p.m., state investigators officially delivered their findings to representatives from Suffolk Downs. While the track itself was poised to pass its background check, the investigators said Caesars would not be deemed suitable to do business in Massachusetts. Suffolk Downs immediately asked its partner to drop out of the bid. Caesars obliged.
The split left Suffolk Downs scrambling to find a new casino operator just weeks before its November 5 referendum. “It does not appear that it’s even an option to postpone the ballot question,” the Suffolk Downs source said. In fact, ballots have already been printed.
It all came as a shock: With properties in 13 states and six countries, Caesars had often passed these types of inspections. Following Caesars’ exit, the Globe suggested that the commission’s standards could “cement the state’s reputation as the toughest U.S. jurisdiction in which to qualify for a gambling license,” and Loveman complained loudly to the press that the state’s high standards will make it difficult for any gaming company to do business here. Nevertheless, within hours of being dropped from the Suffolk Downs bid, Caesars announced it was cutting Gansevoort from its Las Vegas project.
Even Wynn seemed shaken by the commission’s thoroughness. The day before the Caesars bombshell, Wynn made a rare trip to Boston, telling the board that he was “scared to death” that, should he win his bid in Everett, the state might later penalize him if it disapproved of his gambling business in China. Massachusetts investigators had already traveled to his properties in Macao, the Chinese island regarded as a sort of Wild West. “I don’t know what their attitude is with us being in business with Macao. They’ve been over there twice. We run our business in Macao the way we run it here,” he said a few weeks earlier. “Are they licensing Macao or are they licensing us?”
It’s not clear how Caesars’ exit affects the casino-license duel between Suffolk Downs and Wynn. Suffolk Downs intends to keep the building plans designed by Caesars, give or take some Roman statues. And the East Boston track—looking to retain its local edge—says it will proceed with its hotel, restaurant, and arts partnerships (albeit without the benefits of Caesars’ nationwide loyalty network). Still, uncertainty abounds. The gaming law mandates that the commission’s top priorities are the potential for economic development in the area, and the ability to maximize revenue for the state. Beyond that, the criteria are vague. The commissioners may even decide to favor the suburban Milford bid from Nunes and his new partner, Foxwoods, even though it would likely pull in less revenue for the state.
But as I talk to Wynn in his Las Vegas villa, the big shakeup remains weeks away. He is simply relieved to hear that, earlier in the day, the Gaming Commission has all but dismissed Menino’s charge that the Wynn project encroaches on Boston land. “His name is Thomas, isn’t it? Tom Menino’s personality is well known by everybody, and that includes members of the casino commission,” he says.
Wynn, of course, believes he would make an unparalleled impact on the state, and Everett. Since his company is publicly traded, meaning that its highest duty is to its shareholders, I ask him if he feels any extra responsibility to Everett, considering the trust the city has placed in him, or to DeMaria, who has staked his political career on him. Wynn replies that he has a long history of doing good in the community.
Still, he says, “I am not responsible for anybody in Massachusetts. Everybody in Massachusetts is looking to get something from me. Let’s get something straight. Who’s the issuer here of the goodies? They’ve got a piece of property that they can’t use. Massachusetts has got a piece of property that’s dirty and they can’t use. I’m the damn fool that wants to come and spend a billion and two or three hundred million dollars, paying the state money, giving jobs to people in town. Whose career is dependent on what is a mystery to me. All I know is I work for this company and I only give a damn about this company.
“If it happens that I get employees in a business in Everett, my attitude will be exactly the same toward them as it is toward these people here. But right now, I’m just a guy standing by to see if I’ve got a deal.”
Everett and Boston are standing by, too.
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