Selectman Seeks Specifics on Foxwoods Casino Financing Prior to Town Vote

Editor's Note: the post was updated at 4:10 p.m. to include an additional statement from Scott Butera, CEO of Foxwoods MA.

Original Post:

Will the new financing arrangement announced late Friday by Foxwoods Massachusetts change the requirements under its host community agreement with Milford?

The chairman of the Milford Board of Selectmen late Sunday distributed a letter to media, directed to the town's attorney, that seeks an answer to that question before town residents vote Tuesday on the deal.

Bill Buckley, chairman of the three-member board, said Sunday he has concerns that the proposed structure — described in a press release by Foxwoods as a real estate investment trust — could put Foxwoods Massachusetts in a position where it is not legally obligated to pay Milford the agreed-to taxes on the proposed $1 billion development, because it might not own the property, but instead would lease it from the new financing partner.

David Nunes, the Foxwoods MA chief development officer, said Monday morning the new financing won't change the town agreement at all, and said the selectman is trying to create confusion in voters a day before the referendum.

In general terms, at a Massachusetts Gaming Commission meeting last week, Foxwoods MA CEO Scott Butera said one of two financing options the development group was then considering involved a sale-lease back with a publicly traded company that would provide funds for the real estate portion of the development, including the buildings and infrastructure.

On Friday, Foxwoods announced it had an agreement with Gaming and Leisure Properties Inc., an offshoot of Penn National Gaming, that would provide the financing.

Buckley said the board and voters need more clarity.

"I feel like it puts the minimum tax payment at risk, with someone else owning the land and being responsible for the taxes, who is not a part of the host community agreement," Buckley said Sunday, in a phone interview.

In an interview Monday morning, Nunes said nothing has changed. The development will still generate the revenues to pay the taxes due the town under its agreement. GLPI will become the owner of the property and buildings, and Foxwoods Massachusetts would be the long-term tenant, he said. It will not impact the host agreement terms, Nunes said: "It's the same deal. It's a non-event."

Nunes said he sent the requested materials early Monday. "Nothing has changed," Nunes said, of the agreement. "Bill's trying to create confusion."

On Monday afternoon, through a spokesman, Butera said the following: “In response to Milford Board of Selectmen Chairman William Buckley’s request for clarification regarding our recent announcement of a financing relationship with Gaming and Leisure Properties, Inc., the developers remain the same as have been in place since the initial negotiations of the Host Community Agreement. Nothing in the agreement changes, no amendments are required, and all obligations remain exactly the same. There are no changes in the management structure proposed for the resort casino. Further, there is no operational conflict since GLPI is simply a financing source. This type of a sale lease back is a very conventional and traditional financing tool.”

Under the host agreement, heading to voters on Tuesday, the town would receive at least $25 million a year in property taxes, in additional to annual payments for police and fire services to accommodate the new casino development. But that agreement was signed by Foxwoods MA in September, before its new financing arrangement.

On Wednesday, at the Gaming Commission hearing, Foxwoods MA disclosed publicly for the first time that it lacked 55 percent of the equity required to build the casino.

Two days later — just four days before the Milford vote on the casino — the Gaming Commission determined the proposed Milford development was suitable for a resort casino license under several conditions, including that the development partners complete the missing financing and obtain a suitability finding for any new financial partners. About 90 minutes after that decision, Foxwoods MA announced it had secured an agreement with Gaming and Leisure Properties to finance the Milford casino.

In the press release issued Friday night, the company said that it hoped to secure state approval for Gaming and Leisure Properties as an REIT, or a  Real Estate Investment Trust, that would allow it to finance the casino development. The company said it had a signed letter of intent. "GLPI is a newly formed spin-off of Penn National Gaming, Inc. that has announced its intention to qualify as the first gaming-focused REIT," the release stated.

Penn National Gaming is now a candidate for the state's slots parlor license, at the Plainville racetrack facility. Voters there have approved an agreement. The company previously tried to develop a slots parlor in Tewksbury, but town meeting voters there rejected the idea.

In the release Friday, Foxwoods president and CEO Scott Butera said he felt confident the new finance partner would meet state approval.

“We’re pleased GLPI is interested in financing our project as we work to bring the best possible resort casino to Milford and the Commonwealth,” he wrote. "We’re confident that GLPI’s financial support will help us bring our project to fruition, providing great financial stability in addition to social and economic benefits to the local community."

In his letter to Town Counsel Gerry Moody, Buckley asks for information from Foxwoods about what this means, including a contract with the new company, and more specifics about whether it will change the host community agreement heading to voters on Tuesday. He also questioned how the new financier could apply for a sate slots parlor license, but also have an offshoot company involved in the Foxwoods MA development.

Buckley did not vote for the town agreement with Foxwoods MA. It was approved by Selectmen Brian Murray and Dino DeBartolomeis.

Buckley said he hoped for a response on Monday, which could then be distributed to the media before residents vote whether to proceed with a casino. If the information is not made available, he said, the town voters could be either uninformed, or misinformed, about the nature of the agreement.

"I would like to have a clearer understanding of the arrangement between Foxwoods MA and Gaming and Leisure Properties Inc. (GLPI) and specifically, evidence of a binding agreement between GLPI and Foxwoods MA," Buckley wrote. "Critical within these documents would be those items that have been contractually agreed to. I want to be clear that this request is not for a copy of their letter of intent but instead documents that provide evidence of a contract as described by Foxwoods representatives to the media."

"... From what I can gather in the press it is no longer clear to me who the actual developer is in this project. It is my understanding from comments attributed to Mr. David Nunes that GLPI would be the land holder and developer of the buildings. If Foxwoods MA is simply the tenant of a building with land owned by GLPI then it would stand to reason that GLPI is responsible for the property taxes contained in the Host Community Agreement (HCA). As a 3rd party who is not included the HCA what in fact would be their obligation to meet commitments made to the town of Milford by Foxwoods MA? In light of these concerns it begs the obvious question, what exactly is the town voting for or against on November 19th?"

The full text of Buckley's letter follows:

Town Counsel Gerry Moody:

In recognition of the recent Mass Gaming Commission’s (MGC) concerns regarding Foxwoods lack of 55% equity partner and recent unsubstantiated press announcements/ads by Foxwoods having identified “a financing partner” I would like to express my serious concerns regarding this issue.  The significance of this is especially important when we consider the fact that the town of Milford will be voting on this matter in just two days.