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Harrah's to operate Philadelphia casino development27 October 2010
By Howard Stutz
Philadelphia Entertainment and Development Partners struck an agreement with Harrah's to operate a planned $438 million casino in south Philadelphia along the Delaware River.
Harrah's spokesman Gary Thompson confirmed Tuesday the company signed a nonbinding agreement with a group of local Philadelphia investors that has been trying to build the casino since 2006.
The casino was originally going to be operated by Foxwoods Development Co., which runs the Foxwoods Casino in Connecticut. Foxwoods is still an investor in the project.
Thompson said the agreement in principal was contingent on several conditions, including Philadelphia Development convincing state authorities to allow the company to keep the gaming license for the site.
"We've had discussions for a number of years as to what role our company might potentially play in the project," Thompson said.
Earlier this year, Wynn Resorts signed deal to operate the planned casino but backed out of the project.
Pennsylvania gaming authorities have threatened to revoke the project's casino license and are expected to take up the matter at a public hearing today.
The project was licensed in 2006, one of two casinos available for the city of Philadelphia. The other license went to SugarHouse Casino, which opened last month.
According to Philadelphia Entertainment, existing creditors, including Citizens Bank and Harrah's, would agree to restructure their interests.
Developers said they hope to open the casino, which would include 1,500 slot machines, more than 70 table games and several restaurants, by 2012. Harrah's would invest new capital for a minority ownership position in the property and would also agree to a management role.
"This planned transaction enables our investor group to move forward with our project with a view toward opening our doors to the public for gaming within approximately 20 months," Stephen Cozen, an attorney for Philadelphia Entertainment, said in a statement.
Because Harrah's already operates a casino at Pennsylvania's Chester racetrack, it would be allowed under Pennsylvania law to own only 33 percent of the project in Philadelphia.
Harrah's, which was taken private in a $29 billion private equity buyout in January 2008, recently announced plans to return to the public markets in order to raise at least $500 million in funding for several development projects.
Harrah's planned initial public offering would accompany a planned sale of $710 million in stock the company registered in August on behalf of hedge fund billionaire John Paulson, who struck a deal to acquire nearly 10 percent of the company.
The company, which operates 53 casinos in six countries, is involved in a joint venture in Ohio in which the company would be the minority investor and operator of two casinos planned for Cleveland and Cincinnati.
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Harrah's to operate Philadelphia casino development is republished from Online.CasinoCity.com.