Steve Wynn has exited stage left from Wynn Resorts amid sexual misconduct allegations. The hotel chain, which earns the bulk of its profits in Macau, is considered an acquisition target.
But the pending opening of its new $2.5 billion Boston Harbor property, slated for next year, is now in jeopardy. Just last week a constructor worker died on site. And now its gambling license may be at risk.
It turns out that the property was purchased from a felon and an individual with alleged mob ties. The sale was approved by the state gambling commission but the histories of property owners were not part of that record at the time.
Credit: Wynn Boston Harbor
Wynn agreed to purchase the land for $75 million. Then the mob ties came out.
Around the same time, a Massachusetts prison official overheard an ex-convict, Charles Lightbody, bragging on a recorded telephone line. He told an inmate with mob ties that he was hoping to make a killing on the Wynn land sale, according to court filings. Lightbody, who had a minority stake in the Everett site, had convictions going back decades for assault, grand larceny and identify theft, and was said by federal law enforcement to be an associate of the New England family of La Cosa Nostra.
Wynn wound up using that to drive the price down to $35 million, so that the sellers wouldn’t get a premium because the land would be used for a casino.
The sellers were charged with hiding this material information about their past, and were acquitted.
They claim Wynn executives were aware of the ownership history of the property at the time they made the deal. It’s hard to imagine they wouldn’t have investigated everything surrounding such a purchase deeply.
Now the sellers are suing Wynn over the reduced purchase price, and Mohegan Sun which lost out on the gambling license to Wynn is suing as well.
This would hardly be the first hotel project with questionable ties. The old Diplomat hotel, torn down and rebuilt with at least $800 million from the Plumbers and Pipe Fitters pension fund, had management of the investment given to an independent fiduciary to avoid self-dealing. The multi-billion dollar construction project eventually opened late and over budget as a Westin (it’s now part of Hilton’s portfolio).
However because it’s gambling it involves stricter regulation and a different form of organized crime, politics.