|By Brian Hallenbeck, The Day, New London,
Conn.McClatchy-Tribune Regional News
June 12, 2012--The Mohegan Tribal Gaming Authority is close to securing financing for construction of a $45 million hotel and convention center it now plans to own at its racetrack casino in Wilkes-Barre, Pa.
Bobby Soper, president and chief executive officer of Mohegan Sun at Pocono Downs, said Monday that the authority -- which also owns Mohegan Sun in Uncasville -- hopes to break ground by the end of the year and complete the project 16 to 18 months later.
The authority had signed a 2010 memorandum of understanding with a hotel developer who was to build and own the hotel. Mohegan Sun at Pocono Downs was to lease the property from the developer with an option to purchase it at some point.
Under the latest scenario, Mohegan Sun is securing the financing and will build, own and operate the facility, Soper said.
"We decided it made more financial sense to do it ourselves and avoid the developer's fees," he said. "The authority's refinancing also created some flexibility."
The authority completed a refinancing of more than $1.6 billion in long-term debt earlier this year, pushing its nearest maturity back to 2015.
Pocono Downs officials have filed a foundation permit with local officials in Plains Township, an indication that they expect to soon seal the financing deal, Soper said. Zoning and other approvals also are in place.
"We're confident enough (of the financing) at this point," he said. "This will allow us to move quickly."
The seven-story hotel project -- scaled down somewhat since it was first proposed in 2009 -- calls for 238 rooms and convention space. Originally, it was to comprise nine stories and 300 rooms and had a $60 million price tag.
Pocono Downs, which has experienced revenue growth every year since its 2007 opening, has no hotel rooms. It is one of 11 gaming facilities in Pennsylvania, which legalized slot machines in 2006 and table games in 2010. The Keystone State has eclipsed Atlantic City, N.J., as the country's No. 2 gaming destination behind Las Vegas.
The Mohegan gaming authority has also planned to add a hotel at Mohegan Sun, its Connecticut casino, where it pulled the plug on a major expansion project in 2008. The project called for a 39-story hotel tower.
Jeffrey Hartmann, Mohegan Sun's president and chief executive officer, said Monday there was nothing new to report regarding the casino's hotel plan.
"We're still continuing to evaluate our options," he said. "We're speaking to developers but there's nothing of substance to report."
With occupancy rates at the existing Mohegan Sun hotel running in the "mid 90s," casino officials continue to believe it makes sense to add rooms, Hartmann said.
The authority is also expected to partner on the development of a resort casino in Palmer, Mass., where it has optioned a site off the Massachusetts Turnpike. The Massachusetts Gaming Commission has yet to solicit applications for the three casinos and one slots parlor it could approve.
(c)2012 The Day (New London, Conn.)
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