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Foxwoods works to keep up

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MASHANTUCKET, Conn. - Preparing for the next maneuver against its
competition, the Mashantucket Pequot Tribal Nation broke ground Nov. 15 for
a major expansion of its Foxwoods Resort Casino complex.

A lavish celebration for visiting dignitaries kicked off a $700 million
hotel and convention center project. The groundbreaking will turn a former
employee and RV parking lot into a construction site for the next 30
months. When the center opens in summer 2008, it will add two million
square feet of space to the existing 4.7 million at Foxwoods.

The centerpiece will be a hotel tower with 824 rooms and suites and a
21,000-square-foot luxury spa. Meeting and convention space will add
115,000 square feet. A grand ballroom of 50,000 square feet will be double
the size of the existing ballroom in the resort's Grand Pequot Hotel.

The project is an ambitious bid for convention and tourist business, in
addition to the tribe's already famous gaming operation. Existing hotels at
Foxwoods and the nearby Mohegan Sun already run at nearly full capacity.
The expansion also dovetails with the Mashantucket's new championship golf
complex across the road from the casino. The Lake of Isles complex,
featuring two 18-hole courses laid out by well-known course designer Rees
Jones, surrounds an 80-acre lake on a former Boy Scouts of America camp. It
opened May 21.

The Mashantuckets have been playing an extended game of leapfrog
development with their neighbors, the Mohegan Tribe, some 10 miles away
across the Thames River. Each tribe's casinos do roughly equal business,
but in the last quarter the Mohegans have claimed the edge. The annual
financial report of the Mohegan Tribal Gaming Authority said that its slot
machine business was growing at three times the regional rate, an indirect
statement that Foxwoods was stagnating.

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Foxwoods experienced a growth spurt earlier, however, with the completion
of a $300 million renovation near its original casino space. The Rainmaker
project added a large new floor for slots ranging from $5 to a nickel, as
well as a Hard Rock Cafe that it calls the largest in the franchise. The
expansion also added a parking garage, an amenity that tribal casinos are
finding can produce a sharp upsurge in customer traffic. The Rainmaker
garage also provides space to compensate for the parking slots lost to the
new expansion.

The Mashantuckets are now taking the lead in local development. The tribe
estimates that when open the project will add another 2,300 permanent jobs,
bringing its work force to some 13,500. The total does not include
construction itself, which some reports say would employ another 1,800.

But the tribe is also planning to diversify geographically. It announced in
June that it had invested in a 600-acre beachfront parcel in St. Croix,
U.S. Virgin Islands, with plans for a hotel, marina and casino. The
Mashantuckets used proceeds from the sale of two high-speed ferries,
formerly the fleet of its since-disbanded Fox Navigation Co. The ships,
which sat at a pier in New London harbor for a year, were sold to China.
The tribe will be majority partners in St. Croix with a local entity,
Williams and Punch Partners.

The financial details of the company have not been disclosed. The deal was
negotiated by the Tribal Business Advisory Board, composed of nine tribal

Unlike the Mohegans, the Mashantucket Pequots have been experiencing
relative political stability. Recent elections returned two council members
to office, including Vice Chairman Kenneth Reels.

In the meantime, the Mohegans have focused on a major new racino investment
in Pennsylvania, the Mohegan Sun at Pocono Downs, as well as construction
and management contracts for casinos planned by the Menominee Tribe of
Wisconsin and the Cowlitz Tribe of Washington State.