BOSTON (AP)- A group led by Foxwoods announced Friday that it had reached a deal to help finance its proposed $1 billion resort casino in Massachusetts, hours after being told by state gambling regulators that additional financing was one of several conditions it must meet to continue its pursuit of a gambling license.
The conditional "suitability" ruling by the state gambling commission came two days after it was revealed that Crossroads Massachusetts, as the group is formally known, had yet to secure 55 percent of the equity financing needed for the proposed casino that would be operated by Foxwoods in Milford.
Because the group's application was incomplete without the financing, the five-member gambling commission said it could only issue a partial decision.
"Crossroads has met its burden of proof with respect to the completed parts of its application and accordingly is conditionally issued a positive determination of suitability," the commissioners said in a written decision.
The company announced late Friday that it had signed a letter of intent with Gaming and Leisure Properties, Inc., to finance the Milford project. It described GLPI as newly-created spin-off from Penn National Gaming, a company that is bidding to operate a slots parlor at the Plainridge harness race track in Plainville.
"We're confident that GLPI's financial support will help us bring our project to fruition, providing great financial stability in addition to social and economic benefits to the local community," Foxwoods president and chief executive Scott Butera said in a statement.
Casino hopefuls in Massachusetts that submitted preliminary applications in January must clear two major hurdles before they can submit final applications by the state's Dec. 31 deadline. They must be deemed suitable by the commission after an extensive background check, and they must win the approval of residents of their host community in a referendum.
The referendum in Milford is scheduled for Tuesday. Had the commission issued an unsuitable ruling, Crossroads would have been disqualified and the vote rendered moot.
The key condition set by the panel was that the group line up the additional equity financing and show ability to obtain debt financing, and do both "in sufficient time" for the commission's investigative arm to complete its background check and issue a final suitability determination by Dec. 31.
Stephen Oakes, a spokesman for Crossroads, said in an email that GLPI would not be an equity partner in the company but would solidify financing for the project.
The commissioners said in their decision that if new financing resulted in changes to the applicant's current management structure, the new arrangement would also have to be detailed in time for the panel to review it. The fact that Penn National had already been vetted and qualified by the gambling commission was a "best case scenario," Butera said.
Another condition calls on the Mashantucket Pequot Indian tribe, which owns Foxwood's Connecticut casino, to agree in writing to waive its sovereign nation status for all matters related to the Massachusetts casino.
Foxwoods Massachusetts would be governed by a three-member board that consisted of Butera and two members of the tribal council, prompting some questions from the state regulators as to whether the board would operate completely independent from the council.
Foxwoods could face two competitors for the sole eastern Massachusetts resort casino license: Wynn Resorts, which has proposed a facility in Everett; and Suffolk Downs, which said this week it would move ahead with a proposed casino in Revere after being rejected by voters in East Boston.
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