MGM Grand Makes Foxwoods Deal

Connecticut state officials recently demanded to review a deal that would put the MGM Grand moniker on a new hotel and casino expansion at the Foxwoods Resort Casino in Mashantucket.

The Mashantucket Pequot tribe announced it is leasing the name from MGM Mirage for the $700 million project. The new hotel will be called the MGM Grand, but will be operated by Foxwoods, according to MGM and tribal officials.

The state’s gaming compact with the tribe requires the state to sign off on any casino expansion, Attorney General Richard Blumenthal said.

“The nature of their business relationship is a mystery,” Blumenthal said. “They have given us no details nor have they given details to any state agency, including the Department of Revenue Services.”

Blumenthal and Paul Young, the state’s special revenue commissioner, sent a letter to the tribe requesting copies of the agreement and any related documents.

The tribe did not respond to that request by press time.

The Foxwoods expansion includes plans for an 825-room hotel, 5,000-seat theatre, a convention center and ballroom, nightclubs and 1,500 more slot machines. It is expected to open in 2008.

Terry Lanni, chairman and chief exec of MGM Mirage, said the Las Vegas-based company will only help the tribe design and develop the project, and will have nothing to do with its management.

Michael Thomas, chairman of the Mashantucket Pequot Tribal Nation agreed, saying, “We’ll run our own thing at Mashantucket forever.”

The agreement gives Foxwoods an experienced partner as it tries to expand its convention and entertainment business and attract more minorities. Foxwoods will have access to MGM’s database of more than 22 million customers and will use MGM’s partnerships with other companies to help attract new restaurants and top-tier entertainers to eastern Connecticut, Foxwoods chief exec William Sherlock said.

By partnering with Foxwoods, MGM gets brand exposure in the lucrative Northeast market, which is dominated by Foxwoods and Mohegan Sun resorts. MGM does not operate an East Coast casino, though it is a partial investor in Borgata Atlantic City.

Sherlock said he expects to add the MGM name to future projects as part of an ongoing marketing deal between the two companies.

Terms of the deal were not immediately released. The tribe does not release financial figures.

The two companies also agreed to collaborate on casino investments off the reservation, with MGM lending $200 million to the tribe’s development company.

The Mashantuckets are already planning a 600-acre resort and casino in the U.S. Virgin Islands.