Mohegan Sun Suspend Expansion Plan
http://www.courant.com/business/hc-mohegan0924.artsep24,0,5582142.s...
By ERIC GERSHON | Courant Staff Writer
September 24, 2008
The opening of a Margaritaville restaurant at Mohegan Sun next week would have been a small-scale enhancement to the casino, like the Tommy Bahama and Puma stores scheduled to open later this fall.
But now that the Mohegan tribe has decided to delay construction of the largest phase of its planned four-year, $925 million expansion, gamblers and other visitors will have to make do with such smaller improvements, at least for the time being. There won't be a new hotel tower or a House of Blues by 2010, as planned.
"Just because there's no new building doesn't mean there are no new products for our guests," Mitchell Etess, the casino's chief executive, said Tuesday.
Tribal officials said Monday that they would postpone construction of a 922-room hotel that would be the centerpiece of the last phase of the Project Horizon expansion. A House of Blues music venue, a parking garage and some shops and restaurants also will be put off.
Faced with declining slot machine revenue, nervous consumers, tight credit markets and huge construction costs, the tribe decided to suspend the final and most expensive phase of the expansion, costing about $735 million.
The final phase was expected to require roughly 1,200 construction workers.
"Without question, it will have an immediate impact on construction workers," said Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut.
Mohegan officials said they do not plan to abandon the Project Horizon expansion but merely delay it until economic conditions improve.
"In one year, we will revisit the market, how we're performing at the time, and take a look at things again," Etess said.
Mohegan Sun has been playing catch-up with its rival, Foxwoods Resort Casino, which in May opened the MGM Grand at Foxwoods, a $700 million project that includes an 825-room hotel, 4,000-seat theater, casino, spa, convention space, shops, nightclub and restaurants.
About six weeks after the opening, Foxwoods laid off 100 workers after an "organizational review."
The Mohegans expect to have spent about $270 million on Project Horizon by the time work halts, including $116 million on the Casino of the Wind, a new gambling space that opened last month. With that project, Mohegan Sun reintroduced live poker and added more slots and dining options. The Margaritaville restaurant is just outside the poker room.
Mohegan Sun expected it would need about 1,200 construction workers to build the hotel tower and other projects in the final phase. Many have been on-site already. A foundation has already been laid for the hotel, for example.
A spokesman for the tribe could not say Tuesday how many were already at work but said some would remain occupied for a while with smaller projects.
Etess said the tribe — which last Friday learned that a rival had been picked in a contest to develop a $700 million gambling operation in Kansas — said Mohegan Sun does not plan to halt any other projects in the works.
"We really don't have anything to delay," he said.
By ERIC GERSHON | Courant Staff Writer
September 24, 2008
The opening of a Margaritaville restaurant at Mohegan Sun next week would have been a small-scale enhancement to the casino, like the Tommy Bahama and Puma stores scheduled to open later this fall.
But now that the Mohegan tribe has decided to delay construction of the largest phase of its planned four-year, $925 million expansion, gamblers and other visitors will have to make do with such smaller improvements, at least for the time being. There won't be a new hotel tower or a House of Blues by 2010, as planned.
"Just because there's no new building doesn't mean there are no new products for our guests," Mitchell Etess, the casino's chief executive, said Tuesday.
Tribal officials said Monday that they would postpone construction of a 922-room hotel that would be the centerpiece of the last phase of the Project Horizon expansion. A House of Blues music venue, a parking garage and some shops and restaurants also will be put off.
Faced with declining slot machine revenue, nervous consumers, tight credit markets and huge construction costs, the tribe decided to suspend the final and most expensive phase of the expansion, costing about $735 million.
The final phase was expected to require roughly 1,200 construction workers.
"Without question, it will have an immediate impact on construction workers," said Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut.
Mohegan officials said they do not plan to abandon the Project Horizon expansion but merely delay it until economic conditions improve.
"In one year, we will revisit the market, how we're performing at the time, and take a look at things again," Etess said.
Mohegan Sun has been playing catch-up with its rival, Foxwoods Resort Casino, which in May opened the MGM Grand at Foxwoods, a $700 million project that includes an 825-room hotel, 4,000-seat theater, casino, spa, convention space, shops, nightclub and restaurants.
About six weeks after the opening, Foxwoods laid off 100 workers after an "organizational review."
The Mohegans expect to have spent about $270 million on Project Horizon by the time work halts, including $116 million on the Casino of the Wind, a new gambling space that opened last month. With that project, Mohegan Sun reintroduced live poker and added more slots and dining options. The Margaritaville restaurant is just outside the poker room.
Mohegan Sun expected it would need about 1,200 construction workers to build the hotel tower and other projects in the final phase. Many have been on-site already. A foundation has already been laid for the hotel, for example.
A spokesman for the tribe could not say Tuesday how many were already at work but said some would remain occupied for a while with smaller projects.
Etess said the tribe — which last Friday learned that a rival had been picked in a contest to develop a $700 million gambling operation in Kansas — said Mohegan Sun does not plan to halt any other projects in the works.
"We really don't have anything to delay," he said.
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