BOSTON, Aug 27 (Reuters) - Boston Mayor Thomas Menino reached a proposed deal with developers on Tuesday to build a $1 billion Caesars casino in the city's East Boston section that he said would generate at least $32 million in annual revenue for the city and create thousands of jobs.
The pact, expected since casinos were legalized in 2011, also includes an up-front payment of $33.4 million to East Boston and allows the Suffolk Downs horse racetrack, where the casino will be built, to continue to operate, the mayor said in a statement.
A referendum on the deal will be held within 60 to 90 days in East Boston, an outlying part of the city located across Boston Harbor past the city's airport.
"I have said from the start of this process that I wanted three things: a first-class, resort destination casino, an agreement that would benefit the people of East Boston, and a proposal that will be selected by the State Gaming Commission," said Menino, who is in the last year of a 20-year tenure as mayor. "We are well on our way to that and more."
Massachusetts legalized casino gambling in 2011. Lawmakers carved the state up into three districts, and allotted one casino license to each. Suffolk Downs, the only thoroughbred horse racing venue in New England, has been seen as the front-runner for the Boston-area license in a competition with rival Wynn Resorts, which has proposed a casino outside the city, in Everett.
About eight projects are vying for the three licenses, though none have yet won final approval.
The racetrack would join forces with casino operator Caesars Entertainment Corp and build a Caesars-branded resort at Suffolk Downs that includes a casino, hotel, restaurants and retail outlets.
The deal provides for 4,000 permanent jobs, 2,500 construction jobs during the building of the facility, 2,225 jobs during an early opening period and 800 permanent jobs for a year before the early opening.
Under the deal, Boston would receive an estimated $52 million annually, with a guaranteed minimum of $32 million per year, Menino said.
Suffolk Downs has committed to spend $50 million annually on goods and services in Boston and $5 million in East Boston alone. It also would spend at least $45 million on roads, bridges, subway station improvements, bike lanes and ferry transportation.
The project would include two gaming areas, two luxury hotels with a total of 450 rooms, meeting and entertainment space, restaurants, retail space and a seven-story parking garage.