Mohegan Sun and its New York-based investor would be the sole owners of a $1 billion Revere casino — not Suffolk Downs — under a new eleventh-hour agreement finalized just days before the two sides could learn whether they're legally free to build a gaming palace just over the East Boston line.
The deal, announced yesterday after a week of whirlwind negotiations, could breathe new life into two battered gaming partners, whose prospects appeared dead just weeks ago after voters in Palmer spiked a Mohegan Sun proposal and Eastie voters shot down Suffolk Downs' pitch.
But in a major shift from Suffolk Downs' last gaming agreement, the struggling racetrack would lease 42 of its 52 acres of land in Revere to Mohegan Sun and $15 billion-backer Brigade Capital Management, which together would own the casino.
Caesars Entertainment, the track's first partner, bounced amid questions over debt and purported mob ties, would have held just a 4.2 percent stake in the original proposal as the developer and operator.
Mohegan Sun has already passed its Gaming Commission background check.
"It's more akin to our agreement with Palmer," said Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority, referring to the 99-year lease Mohegan Sun had signed to build in the western Massachusetts town, though he declined to detail the Revere terms.
"I think in this case, given the extremely short time frame we needed to get this done, this probably was more executable if our existing arrangements with Brigade and the structure were maintained," Etess said. But he disputed the notion that Suffolk Downs would be simply a "landlord."
"We're really partnering with them," he said.
A Suffolk Downs spokesman declined to comment, referring comment on the deal's structure to Mohegan Sun.
It remains uncertain whether the new partners will be allowed to compete with Wynn Resorts and Everett for the eastern region casino license.
The Gaming Commission is due to meet Tuesday, when its legal team will brief members on whether Suffolk Downs can legally operate a Revere-only casino without another referendum vote. When Revere voters approved a casino on Nov. 5, it was part of the city-line-crossing plan that East Boston rejected.
Celeste Myers of No Eastie Casino, an East Boston-based group that is considering suing to stop the Revere-only deal, immediately blasted Mohegan Sun for "shopping wherever they can."
Mohegan Sun, Myers noted, has faced layoffs of more than 300 workers last year, the refinancing of $715 million in debt and a two-thirds plunge in its fourth-quarter profits just this month.
"They have had all kinds of financial issues," she said. "And now they're joining in the last-ditch cash grab in the commonwealth."
But Etess countered that Mohegan Sun's refinancing will save $16 million in interest costs a year. He touted Brigade's backing "as the strongest platform of any participant in the entire process."
Revere Mayor Dan Rizzo said, "I think it would be unrealistic to think because Mohegan Sun fell on some hard times, that should be indicative of any casino never being built (by them) again."
And Rizzo added, "We can definitely use the jobs."
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