April 14--MASHANTUCKET -- Nearing the end of a massive debt-restructuring and having completed a mostly voluntary downsizing of its workforce, Foxwoods Resort Casino finds itself at a crossroads.

As in Crossroads Massachusetts, a $1 billion casino project that may or may not fly with the locals in Milford, an eastern Bay State town that a would-be casino developer has been courting for years and with whom Foxwoods is now partnered.

At a meeting last Monday in Milford, members of the town's Board of Selectmen panned as short on specifics a presentation by FCX Massachusetts LLC, the entity Scott Butera, Foxwoods' president and chief executive officer, has formed to carry the proposal forward.

Earlier, an anti-casino citizens' group picketed outside town hall, the site of the meeting.

FCX has picked up a baton seemingly dropped by Crossroads Massachusetts LLC, a partnership among Colorado-based developer David Nunes, who first proposed a Milford casino in 2008, Warner Gaming of Las Vegas, businessman Robert Potamkin and others.

Crossroads is an investor in FCX, according to Butera, who was seemingly unfazed by the chilly reception in Milford.

"It was what we expected," he said in an interview late last week. "They're anxious to get more details. If I were in their shoes, I would feel the same way."

Butera noted Foxwoods had only joined the project a month earlier.

"Unfortunately," he said, "not a lot of work had been done."

Can Butera and his team win over selectmen when they return to Milford in six weeks? Can they gain the endorsement of Milford voters in a binding referendum, should the process get that far?

Even if it clears those hurdles, Foxwoods could face competition for a casino license from Wynn Resorts and Caesars Entertainment, Las Vegas-based giants proposing casinos in Everett and in partnership with Suffolk Downs in East Boston, respectively.

That Foxwoods is even in the running seems a stretch to some.

"When we heard Foxwoods was getting in on this deal, it was quite a shock," said Mary Johnson, president of Local 2121 of the United Auto Workers, the labor union representing Foxwoods table-games dealers.

During protracted contract negotiations, casino management has cried poverty, balking at the union's demands for wage increases, shared health insurance costs and other benefits, Johnson said, causing the union to question Foxwoods' investment in Massachusetts.

Johnson was among a Local 2121 contingent that attended the Milford meeting.

"We don't have a position for or against the casino project," she said. "We were there strictly for informational reasons."

Two days before the meeting, Foxwoods completed what Butera had previously referred to as a "reorganization plan," paring its workforce through early retirement offers and layoffs. Management sought to eliminate 50 dealers' positions and ended up letting about 68 dealers go, all voluntarily, according to Johnson.

Foxwoods did not provide information on the total number of positions eliminated.

"Reorganization is a pretty dramatic word," Butera said. "We cleaned some things up, created some efficiencies. Most people who left did so on a voluntary basis. Employment levels aren't dramatically different than they were before."

He told Milford selectmen that Foxwoods employs more than 8,000 people, making it one of the largest sources of jobs in the casino industry.

Despite the downsizing and the ongoing decline in Foxwoods' slot-machine revenues -- year-over-year totals have been down 14 straight months and in 23 of the last 26 months -- management has no plans to close any portion of the property, which includes MGM Grand at Foxwoods, according to Butera.

"Some stores might close while they're being renovated, but that's all," he said.

Debt rated again

During his Milford presentation, Butera said Foxwoods' owners, the Mashantucket Pequot Tribe, expected to close within two to three weeks on a debt restructuring that will put Foxwoods on sound financial footing. The tribe has struggled since at least 2009, when the recession, gaming competition and overspending on MGM Grand caused it to default.

The tribe halted regular distributions of gaming revenue to tribal members at the end of 2010 and ended lesser "transitional" payments last year.

"Our financial problems are well behind us," Butera told selectmen.

Two days later, the tribe announced it was extending for a third time the expiration date on bond-exchange offers that are part of the restructuring plan designed to shrink a debt load of about $2.2 billion to about $1.7 billion.

The tribe still lacks sufficient participation among holders of a class of notes paying 8.5 percent interest.

The tribe announced that the National Indian Gaming Commission has favorably reviewed the exchange offers.

For the first time since the tribe's default more than three years ago, credit-rating agencies have assigned preliminary ratings to the tribe's senior debt, which, under the restructuring plan, will total $587 million in bank loans. Both Moody's Investor's Service and Standard & Poor's have deemed the tribe's financial outlook "stable."

Moody's assigned a B1 rating to the tribe's proposed $587 million "credit facility" along with a Caa1 corporate family rating and a Caa-1 probability-of-default rating. Debt with a B1 rating is regarded as highly speculative while that with a Caa-1 rating, which is lower than B1, also carries substantial risk, according to Moody's.

Standard & Poor's assigned the tribe a CCC+ preliminary issuer credit rating, the same preliminary issue-level rating it gave the tribe's credit facility. Debt that carries the rating is considered substantially risky.

"The stable rating outlook reflects our belief that cash flow and excess cash on the balance sheet should be sufficient to fund fixed charges over the near term," S&P's said in a March 28 announcement.

Butera said the ratings are an important step in restoring faith in the tribe's finances among investors. He said that in connection with the restructuring plan, the tribe intends to publicly release more information about its finances than it has previously.

"There's a significant advantage to transparency," he said. "Investors are a lot more comfortable investing in a company that shares information. It opens you up to a broader investment community....It's a disadvantage if all you can publish is your slot handle."

In announcing its ratings on the Mashantuckets' debt, Standard & Poor's said it considered the tribe's business risk profile "vulnerable," reflecting the tribe's "reliance on a single property for cash flow and competitive dynamics in the region."

"In addition, the business risk profile takes into account our expectation for a substantial increase in competition located in Massachusetts in early 2016, which we expect will result in a meaningful decline in the customer base and cash flow generation," Standard & Poor's said.

Perhaps it's little wonder, then, that Butera insists his "No. 1 focus" is Crossroads Massachusetts.

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