Wynn halts planned $400 million casino expansion amid financial dispute with Everett – The Boston Globe

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After the project went through state and local reviews for the past two years, crews led by general contractor Suffolk Construction were beginning to prep the site when Wynn decided to halt the development.

Chief executive Craig Billings broke the news to Wynn investors and analysts during an earnings conference call on Tuesday afternoon. It was, in fact, one of the first things Billings mentioned on that call.

“We have put this development on hold for the time being because we have been unable to reach an agreement with local authorities on certain financial terms,” Billings said. “Though it is disappointing, we have numerous other development projects globally where we can redirect the capital we intended to deploy in Boston.”

The dispute between DeMaria’s administration and Wynn involves how much money the casino company should pay the city above what’s provided via the original host community agreement for the five-year-old casino. Per city records, Wynn paid a fee of $30 million before opening, and then annual payments in lieu of taxes and community mitigation fees that totaled $25 million in the city’s 2021 fiscal year; that number grew to $26.9 million for 2024. (Those numbers don’t include meal and room taxes from the casino.)

It’s not clear how much of an increase DeMaria wants to see from Wynn for the new project. Neither side would disclose particulars, and both described the negotiations as active, despite the impasse. A spokeswoman for Wynn said the financial terms sought by city officials “simply do not make the project viable, given the other current opportunities we have for deployment of our capital.” In late 2022, city officials said they were anticipating an extra $3.6 million in taxes, or payments in lieu of taxes, from the expansion.

For DeMaria, the Wynn expansion lines up with his vision of gradually converting the formerly industrial Lower Broadway area into a dining and entertainment destination — a vision that may also include a stadium for the New England Revolution on land that Wynn currently owns across the street from the casino.

Encore Boston Harbor casino in Everett brought in more than $750 million in gaming revenue last year.Jessica Rinaldi/Globe Staff

But DeMaria, in a prepared statement about the current impasse, said he has to make sure he’s getting the best deal for Everett residents. For 2023, the casino brought in more than $750 million in gambling revenue, not even including its new sports betting business. And Wynn said this week that Encore Boston Harbor experienced stable profits in the quarter that just ended, helped along by a record amount of slot-machine activity in March and strong year-over-year growth in hotel revenue.

“Earnings for Wynn from Encore continue to be positive and I welcome their interest in expanding operations with the East of Broadway proposal. The further development would enhance the appeal of this area as a destination district,” DeMaria said in a statement. “I am glad that business is good at Encore, but I am in the business of reaching the best deal for the residents of my hometown.”

The dispute comes as DeMaria and the Kraft Group are pushing for legislation on Beacon Hill that would remove a disused, 43-acre section of the sprawling Mystic power plant across from the casino — and next to the casino expansion site — from a designated port area zone, to allow for the construction of a roughly 25,000-seat stadium for the Revolution. On April 25, the Legislature’s economic development committee endorsed the stadium bill, which is now before the Senate Ways and Means Committee. Wynn bought the land for $25 million from Constellation Energy last year, saying at the time that it wanted to ensure that future development on the site would be “synergistic” with the casino and the expansion that the company has now put on hold.

That expansion has taken a tortuous route from its initial unveiling nearly three years ago. Even before the casino was open, Wynn had bought up parcels across the street with future development in mind. In late 2021, Wynn filed plans with the city for the first phase of a 13-acre development — a section largely consisting of the garage, walkway, an 1,800-seat indoor events venue, and a two-story restaurant.

Rival venue operators pushed back, saying the state’s casino law prevents any venue with between 1,000 and 3,500 seats from opening at a casino property. Wynn argued that the new project would not technically be part of the casino, but in the end ratcheted back the size of the venue to just under 1,000 seats.

In late 2022, after the state Legislature legalized sports betting, Wynn pivoted, changing its plans to include a poker room and a sportsbook facility — making the project a legal extension of the casino after all. Big Night Entertainment Group has been planning to run non-gambling operations in the new building, and would relocate its Memoire nightclub from the casino to the expansion. Wynn officials at the time said as many as 800 people would work at the block’s various venues, most of them with Big Night.

Wynn then ran into resistance with state environmental regulators over the amount of parking proposed for the multi-phase development across the street from the casino, and eventually agreed to remove more than 360 spaces from the plans, before receiving state environmental approval earlier this year.

Wynn’s plans for the rest of this 13-acre swath it owns across the street from the casino include two hotels, restaurants, and shops. But with the first phase stalled out, the future of those other phases remains uncertain.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him @jonchesto.

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