Casino

PROVIDENCE — State officials have hired two international firms to advise them on the operations at Twin River, the Lincoln slot parlor that provides the state with millions of dollars annually in gambling revenue.

The Willkie Farr & Gallagher law firm and the Blackstone Group, a leveraged-buyout firm, began working for the state in late June or early July, according to Gary Sasse, director of the state Department of Revenue, “to give advice on restructuring issues and other contingencies as they might develop.”

The state has been closely monitoring the operations at Twin River since earlier this year, when the slot parlor’s owners missed a loan payment in March, prompting negotiations with its lenders and collection efforts by contractors who worked on the building’s $225-million reconstruction.

Gambling is the third-largest source of state income.

The owner of the Twin River slot parlor now says it expects to wrap up financing negotiations with its lenders tomorrow, according to a spokeswoman for the Lincoln facility.

Slot-parlor owner UTGR Inc. has been negotiating for months with its lenders to rework the $577 million in financing it has tied to Twin River’s operations. The company, a subsidiary of BLB Investors LLC, is under pressure from its chief lender, the Merrill Lynch Capital Corp., to generate enough money to meet the loan payments.

“We likely will not have an agreement in hand until Friday of this week. Continuing to work through some difficult issues,” Patti Doyle, Twin River’s spokeswoman, said in an e-mail to The Journal.

When asked whether an agreement by tomorrow is a certainty, Doyle replied by e-mail: “We certainly hope so and are pushing hard to that end.”

The “stretched out” loan negotiations are not affecting the slot parlor’s operations or the flow of money to the state, Sasse said.

“We’re just continuing to monitor the situation,” he said.

The state is now aided by the two advisory firms, which are reviewing the gamut of Twin River’s financial operations, from evaluating its business prospects and long-term business plans to analyzing financial projections and liquidity.

“We are exercising appropriate due diligence,” Sasse said.

Willkie Farr is reporting to both the Department of Revenue and the state Department of Business Regulation, he said, while the Blackstone Group’s primary relationship is with his department.

Sasse declined to say whether the advisors have found anything of concern at Twin River.

The firms will continue their work, Sasse said, as long as is necessary to assure the state that Twin River’s financial condition has stabilized.

Under terms of its contract with the state, BLB is paying the advisors for their work, Sasse said.

Until now, the state has provided few details about its efforts to oversee the slot parlor.

Sasse and other top officials in the Carcieri administration have met periodically with Twin River representatives, but won’t discuss the nature of the talks.

Nor would they provide copies of the proposal Twin River’s owners pitched in June, when they were lobbying both the governor’s staff and key lawmakers to reduce by more than half the percentage-of-revenue the slot parlor is currently required to pay the state.

On June 16, the Providence Journal formally requested any materials reflecting the owners’ attempt to change the terms of the state’s 2005 Master Video Lottery Terminal Contract with Twin River, which included the locked-in payment rate the new owners of the former Lincoln Park described as critical to their ability to nail down financing.

On June 27, however, deputy legal counsel Daniel W. Majcher advised the newspaper that “the office of [the] governor will not be able to accommodate your request” within 10 business days, as required by the state’s Access to Public Records Act except in cases where there is “good cause” for taking up to 30 business days.

Without any explanation, Majcher invoked the extension and then on July 24 — almost six weeks after the initial request — advised the newspaper that the administration did not intend to provide any of the requested documents because it did not consider them to be public information. He cited exclusions in the law for “privileged” corporate information, material that would not be available to an opposing party in a lawsuit, and any “statement of strategy or negotiation with respect to the investment or borrowing of public funds.”

He did not explain how any of these exclusions related to Twin River’s bid to reduce the amount of money it is currently required, by law and agreement, to pay into the state treasury. Majcher has not identified the documents the administration is withholding from public view.

In a mid-August response to a query about the nature of his continued meetings with Twin River representatives, Sasse said: “We have been meeting with Twin River, but I having nothing to report.”

Doyle, Twin River’s spokeswoman, has provided a little, but not much, more insight into these private meetings in late July when Twin River’s owners were facing their last lender deadline.

She said: “At this writing, we are not asking for anything specific from the state. Creditors are somewhat pleased with the increased business over the last couple of months, owing in large measure to ‘24/3’ and players-point program. They are also impressed with our increased revenue particularly in light of the downturns being experienced at virtually every other gaming facility.

“But it is not enough to satisfy them long term, so again, we are hoping to work with the state on finding ways to satisfy their concerns,” she wrote.

Doyle would not elaborate then, and when asked again on Aug. 18 to detail the nature of the closed-door talks with the Carcieri administration, she wrote: “All meetings are internal, largely with Department of Revenue. I would direct you there as we will not be commenting on status of internal meetings.”

pgrimald@projo.com