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Talk of Wynn sale makes city officials nervous

By Brendan Clogston

 

Multiple media outlets have reported that Wynn Resorts is in preliminary discussions to sell its $2.4 billion casino development in Everett to MGM Resorts International. And while the two companies have been tight-lipped about any potential talks – declining to publicly confirm or deny that they’re even occurring – city officials are increasingly insistent that they have a say in a process that could have a profound impact on the city for decades to come.

Wynn Resorts has been grappling for months with a series of allegations of sexual misconduct into its founder, Steve Wynn, beginning with a bombshell article by The Wall Street Journal in January. While Wynn quickly resigned and recently sold all of his shares in the company, the Massachusetts Gaming Commission’s investigation is ongoing, focused in part on what the company’s leadership knew of the incidents and what was done about them, if anything, prior to the WSJ’s report. The investigation took on new urgency for the developer on March 29 when Gaming Commission Chair Steven Crosby informed casino officials that Wynn Boston Harbor is now operating in the Commonwealth on an “at-risk” basis.

Shortly afterward, Wynn Resorts’ CEO, Matthew Maddox, released a somewhat cryptic statement, seemingly to justify any potential sale as something the company may find itself forced to do, should some of the implications of Crosby’s comments begin to manifest. “Our company stands for quality and five-star service and is uniquely situated to deliver one the best integrated resorts in the world for both customers and employees in Everett, Massachusetts,” said Maddox. “We remain very excited about the Boston market. However, our obligation to shareholders is always to maximize the value of our assets and to mitigate risk. These obligations are particularly relevant in light of recent commentary that was made despite our rapid and decisive efforts to sever all ties with our former Chairman, actively searching for new diverse board members, and fully cooperating with the regulators in Massachusetts and everywhere.”

Some have speculated that the casino is hoping to leverage the Gaming Commission to speed up their inquiry. Currently, that investigation is not scheduled to finish until sometime this summer: a long time for the viability of a $2.4 billion project in the middle of construction to remain hazy.

Any sale would produce a sea change in the state’s casino economy before it even begins. MGM is currently only a month away from completing a $960 million Springfield, Mass., resort, but because gaming regulations prohibit a company from holding more than one license in state, MGM would have to sell that property to another operator in order to purchase Wynn Boston Harbor.

 

“More than just a casino”

Officials in Everett are nervous about the prospect of a new operator in the city, having worked closely with Wynn Resorts for more than half a decade and fearing that a new operator may not live up to what Wynn has promised the community. It is common to hear city officials talk about Wynn Resorts as “more than just a casino,” using phrases like “transformative” and “catalyst” and imaging the property as more of a massive entertainment resort. Many seem to fear that with MGM what the city would be hosting on Lower Broadway would, in fact, be “just a casino.”

Mayor Carlo DeMaria, one of the casino project’s staunchest supporters in the city, has been particularly bullish on Wynn Resorts’ continued involvement in the project. “There’s a grander vision here than just a casino,” Mayor DeMaria said in a statement shortly after the news about a potential sale broke. “We are planning for a whole new district in the city of Everett that can generate a lot of great jobs. The Wynn Corporation has demonstrated it can partner with us to fulfill that vision. I am deeply concerned that a new owner would not honor that vision and could have plans that fall far short of what we want to see happen – a complete transformation of an area that had been blighted, contaminated, and underutilized before the Wynn development team arrived.”

Mayor DeMaria went on to state that he was “encouraged” by the fact that the commission had begun the process of removing Steve Wynn as a qualifier from the project’s gaming license. “I believe that anyone else who is found unsuitable as a result of their process should also be removed so we can move forward on this project,” said DeMaria. “This high-performing organization of 27,000 employees worldwide is the right partner for us, right now, and I want their work to continue on in Everett.”

The City Council is also looking to make sure that its voice is heard, with Councillors Wayne Matewsky, John Leo McKinnon, and Rosa DiFlorio filing an order for Monday’s meeting agenda calling for reps from Wynn and MGC to give them an update.

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