Ever since Encore Boston Harbor casino in Massachusetts opened a few years ago, it has been embroiled in one legal battle after another over the property. However, the Wynn Resorts-owned property has almost always managed to emerge on the winning side of the fight. It has done so one more time, thanks to a judge’s ruling that the former owner of the site won’t be able to collect the $40 million it had sought over the price Wynn paid for the real estate purchase, according to The Boston Globe.
Encore Real Estate Battle Now Over
While most of the lawsuits have targeted Wynn Resorts and Encore, this one was directed at the Massachusetts Gaming Commission (MGC). FBT Everett Realty LLC, the company that sold the real estate to Wynn, went after the commission over the price the property ultimately sold for, arguing that the MGC was responsible for helping the casino operator lowball the company. It sought $40 million, which it said represents the fair market value of the property and the difference in the original price Wynn was going to pay.
Wynn had reached an agreement in 2015 with FBT to buy the 35-acre tract of land for $75 million in order to expand into Massachusetts. The operator had won the rights to build a casino resort in the state a year earlier and the site was deemed the perfect location. However, not long after the agreement was established, it was revealed that FBT had alleged ties with a criminal, Charles Lightbody, with a sordid past that included assault and involvement in an identity theft ring. As a result, Wynn dropped its price to $35 million in 2013 and the sale moved forward.
MGC Played a Large Role in the Sale
FBT felt that it had been robbed of $40 million and that it was all the MGC’s fault. It accused the gaming regulator of having convinced Wynn to reduce its offer. The company argued that the commission presented a valuation based on what the property would have been worth if a large retailer had bought it, and Wynn was happy to be able to save millions of dollars to buy the land. It had already been paying $100,000 a month for years in order to get FBT to not sell the property to anyone else, and didn’t want to shell out more than it had to.
FBT, which purchased the property in 2009 for $8 million, acknowledges that the $35 million is fair market value for a retailer, but that felt it deserved to be paid more because the land was ultimately used for a casino. However, a judge disagreed this month, dismissing the case and sending FBT away empty-handed. The judge said that the company couldn’t have known that the property would be used for a casino when it purchased it, because casinos weren’t legal in the state at that time. FBT will have to survive off the $27 million it earned after flipping the property a few years following its purchase, as well as the $100,000 in free cash it added each month for years to lock in the sale.