Boston and Mohegan Sun reach $300 million compensation deal for proposed Suffolk Downs casino

Mayor Martin Walsh and Mohegan Sun announced a deal Thursday that would provide the city with at least $300 million in investments over 15 years if the casino company wins a state gambling license. The American Indian tribe-owned company proposes a $1.3 billion resort casino at the Suffolk Downs horse racing track in the neighboring city of Revere.

The "surrounding community agreement" is meant to compensate Boston for any impact the casino might cause to city services and traffic even though the casino would not be located within Boston's borders. It is contingent on Mohegan Sun winning the sole casino license for the Boston area. State gambling regulators are expected to award the license to either Mohegan Sun or Wynn Resorts, which has proposed a $1.6 billion casino in nearby Everett, by early September.

Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority, said the deal is an example of the kind of casino operator it would be, if chosen. "We're good neighbors," he said Thursday outside City Hall.

Walsh, who has been critical of state gambling regulators since taking office in January, said the agreement does not mean he is supporting Mohegan Sun in its application. He said the Connecticut-based company simply offered a better deal than Wynn, which he says offered just $600,000 in annual payments.

"I don't think they can tout me as a supporter of their project," Walsh said of Mohegan Sun. "They can certainly say we sat down and came to an understanding. ... They were certainly easier to deal with (than Wynn) in this process."

Wynn spokesman Michael Weaver declined to elaborate on the casino's dealings with the city, saying only that the company "offered Boston a total package worth millions of dollars per year" and has submitted its "best and final offer" to arbitrators, as state regulations require. Walsh said the city has declined to participate in arbitration to resolve the impasse with Wynn.

Mohegan Sun's deal would pay the city at least $18 million annually once the resort casino opens, with gaming revenue profit sharing potentially boosting the payments to more than $22.5 million annually.

The agreement also calls for Mohegan Sun to pay an additional $30 million over 10 years toward capital improvements in East Boston, the city neighborhood where a large part of the horse track is located. Voters in East Boston had rejected a previous casino proposal that had been located on both the Revere and Boston side of the horse track property.

The city also separately reached an agreement Thursday with Suffolk Downs' owners that guarantees the horse track will remain in operation for at least the 15-year term of the casino license.