Casino Applicant Presentations Show Some Differences in Style, Substance

January 30, 2014
By
Steve Wynn, Chief Executive Officer of Wynn Resorts, gives his final presentation for the proposed resort to the Massachusetts Gaming Commission

Steve Wynn, Chief
Executive Officer of Wynn
Resorts, gives his final presentation
for the proposed resort
to the Massachusetts Gaming
Commission

If the presentations last week to the Massachusetts Gaming Commission (MGC) by both Greater Boston resort casino applicants were rock concerts, Mohegan Sun’s presentation could be described as a hard-driving, electrified set, while Wynn’s could be compared to an acoustic set.

So different were the MGC presentations last Wednesday, Jan. 22, that – despite obvious similarities – observers could also easily see a clear difference between the style, substance and business plans of the two remaining operators.

It was the first opportunity for the casino hopefuls to lay out detailed plans in their own words, and MGC Commissioners left the room visibly impressed by both. They gave no hint of favoring one over the other, both smiling and laughing equally.

Mohegan Sun presents

First up was Mohegan Sun, who used the entire 90 minutes to present well-produced videos interspersed with short oral presentations by company leaders, including CEO Mitchell Etess, who made a point of projecting a hip and cutting-edge energy. He and others did so to a packed house, busing in hundreds of supporters from Revere, Lynn and Chelsea to pack the room at the South Boston Convention Center. Plans were rolled out to thundering applause, and the presentation ended with deafening cheers and a standing ovation.

Off the bat, Mohegan played up its local roots, saying company and tribe members know New England better than anyone else.

“We are the home team,” said Kevin Brown, chair of the Mohegan Tribal Council. “When I was a kid I went to Fenway Park for my first game. I sat in the right field bleachers for my first professional baseball game. I went to the Garden and sat behind a cement pillar and couldn’t really see the game…The point of all that is this marriage between Mohegan Sun Massachusetts and Revere isn’t something that feels like home. It is home. This is where we’re from.”

Through a series of slickly-produced mini-movies, the company rolled out the roles of its partners, including architects Kohn, Pederson, Fox (KPF); retail developers New England Development and Finard Properties; and financier Brigade Capital Management.

They also showed numerous local people and local scenes, including Ward 1 City Councillor Richard Penta and several friends talking up the plans in the Beachmont Square bakery Torretta’s.

Others featured were Mayor Dan Rizzo, Fire Chief Gene Doherty, Police Chief Joe Cafarelli, Councillor Ira Novoselsky, Superintendent Paul Dakin, Chelsea City Manager Jay Ash, Lynn Chamber of Commerce leaders, Revere Chamber of Commerce president Bob Upton, the owners of New Deal Fruit and Revere restaurateur Gary Ferragamo – among many others.

Etess drew the biggest applause from the crowd on two occasions, when he spoke of the project providing the revenue stream that would keep Suffolk Downs Horse track open and when he noted that all new jobs at the proposed resort casino would be first offered to Suffolk Downs and former Wonderland workers.

“If we get the license in Revere, Suffolk Downs stays in business,” Etess announced amidst loud cheers.

Another key piece of the presentation came from Todd Finard, an executive for the project’s retail partner, Finard Properties, and lead architect Gene Kohn of KPF. Both emphasized the horizontal build out of the resort, noting that it would not go up but rather out – filling up the site and leaving a great deal of room for gardens, trails and green space.

“This is not a mall; this is not a shopping center,” said Finard. “This is an experience…We’re going to have intimate lounges, these high octane dance clubs and we’re going to have casual pubs. All of it is going to get woven together…So, if you’re a Pitbull, Beyoncé, or Lady Gaga person, there’s something for you. If you’re a Sinatra, Tom Jones or Micheal Bublé person, then we’ve got something for you too. The point is we need to cater to a wide range of tastes and styles. Our two-hotel design didn’t happen by accident. It is an intentional detail that will allow us to cater to these different styles.”

After a few more videos, Etess finished up with a Top 10 List a la David Letterman. He emphasized that the project will bring in $217 million in tax revenues to the state on year one – comparable but just higher than Wynn’s projections. He also said they will be open first.

“We’ll be up and running quickly,” he said. “Our project is on a clean site. It’s easy to build on and no environmental problems. Our projections estimate we will be up and running six months earlier. That’s a half a year earlier than the other applicant.”

Subdued Wynn Offers Calm Confidence

Wynn, on the other hand, had quite a different approach to his presentation. Though there was a noticeable crowd of supporters in the hall, no one had been bused in from Everett to fill the seats.

Likewise, he didn’t have videos or high-energy “developer-speak,” as he put it.

Instead, in a noticeably subdued 50-minute talk, he captivated the Commissioners and audience with his words – frequently taking umbrage with Mohegan’s presentation and drawing distinct differences between what he plans to build and what they propose to build.

He made that clear from the outset.

“My presentation is going to be a bit different than the lovely job that Mitchell Etess and his friends did earlier today,” said Wynn, taking on the character of a more experienced man giving grandfatherly advice to a younger man. “Maybe because we’ve been at it longer and we’ve had job fairs in Everett and we’ve been before this Commission before, but I’m afraid to admit at the moment that I have no video. I’ll try to overcome that tremendous deficit in the next few minutes…I think it’s time today to get down to the nitty gritty of how it’s done – the nitty gritty of what it takes to get people from outside of the region into the region.”

First, he talked about how he plans to build vertically rather than horizontally – taking to task the characterizations of his project by Mohegan’s architect, Kohn, as a cookie cutter high-rise.

“When something is spread out horizontally that means you have to walk further to get to it,” he said, projecting the experience of his years in the business while also noting that his family is originally from Revere’s Shirley Avenue area. “The housekeeping people have to walk further. The room service people have to walk further. The baggage people have to walk further and the aging population has to walk further. A long time ago in the arc of our experience, we learned we do not want to make people walk further; we want them to walk less. So, we went vertically with the buildings because that was much more user friendly.”

Then he went on the offensive, detailing the numerous and record breaking five-star ratings that his resorts have garnered from Forbes magazine – including several new designations unveiled last week. He said he drew attention to those designations because he plans to build that same five-star caliber resort in Everett, while Mohegan only plans to build a 3-star hotel.

Detailing the differences in hotel room dimensions and non-casino related revenues from his resort versus Mohegan’s resort, he said Mohegan will build nothing like what he intends to build.

“A three-star hotel is not going to bring anybody from outside the region to the region,” he said, pounding his fist on the podium. “Anyone is the hospitality industry knows you don’t build a three-star hotel in 2014 in this industry. It’s yesterday’s newspaper and doesn’t get the job done. It’s a misfire…The room you see here will be the finest room available on the Eastern seaboard. There is no room in Philadelphia, New York, Boston or Chicago like that room you see. The casino allows us to do that.”

Then, he added emphatically, after noting that his non-casino revenues far exceed that of Mohegan’s, “It’s the non-casino stuff that does it. It’s the place.; the magic of the place that does it. In order to make the place magic, you’ve got to know how…So, you don’t build a three-star hotel; you build a five-star hotel if you want to bring people from over there to here.”

Two major features he highlighted were the water transportation service on the Mystic River, and the Winter Garden feature that will have a floral replica of a Faberge egg – complete with a sculpture inside the egg that will change monthly.

The biggest emphasis, however, that Wynn and his CFO Matt Maddox made in their presentation was that they do everything in house. From hotel management to retail development to project financing, they have no outside partners.

“We’ve got one gig,” said Wynn. “Customer service and guest experience. We own the restaurant. We operate the hotel. We operate the casino. We don’t go looking for other people ‘cause we can afford to and know how to do it ourselves.”

Maddox pounded that point home in his presentation, which preceded Wynn’s. He made a point to draw attention to the fact that they have 30 times more cash on hand than Mohegan Sun and will finance the project themselves instead of using a financier like Brigade.

“We have 30 times more cash on hand – $2.4 billion in the bank – than our other Region A competitor,” Maddox said. “We generate over 12 times more cash flow. It’s not that we’re bigger and bigger is better. What’s important is when you have financial stability, it guarantees on time construction and completion. It guarantees employee jobs and it guarantees brand protection.”

He also drew attention to the fact that Mohegan Sun had 8,700 employees in 2007 at its peak, but now has 5,500 employees. He said that hasn’t happened at Wynn, where he said executives took a pay cut in the down times to save employees.

“That’s 3,000 less employees (at Mohegan) than at their peak [in 2007],” he said. “It’s a very similar story in Las Vegas for every other operator except Wynn. We protected our employees; we invested in our people…We are the owner, the operator and the financier.”

Wynn finished his presentation by showing a short slide show backed by a musical duet by Frank Sinatra and Dean Martin of the song, ‘You’ve Either Got or You Haven’t Got Style.’

Following the presentations, MGC Commissioners thanked both sides, and it was apparent that they had a lot of thinking to do before resort casino licenses are awarded at the end of May.