Business

Developer ditches planned New Bedford casino project

An artist's rendering of the proposed casino in New Bedford, which came off the table Wednesday. Kostow Greenwood Architects

By Adam Vaccaro

July 22, 2015

2 minutes to read

New Bedford wanted a casino. A developer wanted to build it. But it looks like nobody wanted to pay for it.

New York-based development company KG Urban had long eyed the city as the site of a waterfront casino. New Bedford officials had negotiated an agreement that would have paid more than $12 million per year to city coffers if it ever got built. And last month, New Bedford voters overwhelmingly said yes, we’d like a casino, with more than 70 percent voting in favor.

But the plan is dead. KG Urban pulled its application for the state’s final casino license Wednesday, saying in a letter to the Massachusetts Gaming Commission that it had been “unable to create a viable financing package for the project.’’

KG Urban’s sudden pull-out is surprising, given the lengths it had gone through to get involved in the project. CEO Barry Gosin had also indicated to the commission and to New Bedford officials that it had a financing plan lined up in May.

In a statement, New Bedford Mayor Jon Mitchell criticized Gosin’s prior representation of the project’s financing.

“KG Urban’s decision to abandon the [casino] project is an extreme disappointment and a great shock given that its CEO Barry Gosin had led everyone to believe he would have the necessary funds to build the project,’’ Mitchell said. “We have been united as a community and have done everything possible to support the KG casino proposal based on Mr. Gosin’s commitment to fully fund the project, so city residents and its leadership are all understandably upset by Mr. Gosin’s decision.’’

Many observers have wondered about the viability of the region as a casino host. Pending plans for a tribal casino in Taunton, caught up in a federal approval process but still a possibility, could mean built-in competition. The possibility was mentioned by KG Urban in its Tuesday letter as a reason it struggled to find financing.

Efforts to move the Newport Grand slots parlor in Rhode Island and turn it into a full-service casino just across the Massachusetts state line, just half an hour from New Bedford, also stoked concerns about oversaturation.

With the New Bedford project off the table, only one application still stands for the southeastern Massachusetts casino license, in Brockton. If approved, Mass Gaming & Entertainment—a subsidiary of midwest casino company Rush Street Gaming—would be located on the Brockton Fairgrounds.

The licensing process in southeastern Massachusetts has been long-delayed, but is currently scheduled to be finalized early next year.

The gaming commission has issued three licenses already. A slots parlor in Plainville opened last month. But two other projects—an Everett casino from Wynn Resorts and a Springfield casino from MGM Resorts—have already faced early delays since gaining their licenses last year.