Writes off more than $52 million in debt owed by local investor group for the project
Harrah's Entertainment has moved closer to taking over Philadelphia’s troubled Foxwoods casino project, writing off more than $52 million in debt owed by the local investor group for the project.
Sources familiar with the deal told The Philadelphia Inquirer that forgiveness of the debt, incurred in 2005, is part of negotiations to transfer control of the aborted development on the Delaware River waterfront to Harrah’s.
A spokeswoman for Harrah's, however, told the newspaper that the write-down was "merely an accounting measure" that was "unrelated to anything else." The amount, she added, was an "accounting determination" of the current value of the note.
The local investors, led by Comcast-Spectacor Chairman Ed Snider and charitable interests for the families of lawyer Lewis Katz and developer Ron Rubin, were deeded the land by an affiliate of Harrah's, Caesars Entertainment. They did not pay for the land, but gave Harrah's a promissory note, payable in 2015, for $67.3 million.
The affiliate, Caesars Entertainment, planned to develop a casino on the site before it was acquired by Harrah's.
The local investor group decided to team up with the Mashantucket Pequot Tribe of Connecticut to build a casino on Columbus Boulevard between Tasker and Reed Streets. The former brought land to the table, while the tribe agreed to finance, develop, and operate the casino. But the Mashantucket Pequots faced severe financial problems in 2008, hampering their ability to lead the project.
Because of the money it was owed for the land, Harrah's became a likely candidate, gaming analysts said.
A lawyer for the Foxwoods group indicated to the Pennsylvania Gaming Control Board in July that the sides were getting close to an agreement and he expected the investors to sign a preliminary agreement by early August.
Harrah's moves closer to Philly casino
August 11, 2010