The developer behind a proposed New Bedford casino has withdrawn its application for the state's third and final casino license.
In a letter to the Massachusetts Gaming Commission, KG Urban Enterprises said financing for the $650 million project was "significantly harder to obtain than we anticipated."
KG Urban said its difficulty in securing financing was due in part to the possibility that the Mashpee Wampanoag tribe could be granted federal approval to open its own resort casino in nearby Taunton, "which would pay no taxes or other compensation to the Commonwealth."
New Bedford Mayor Jon Mitchell said in a statement that KG Urban's decision to pull its bid is "an extreme disappointment and a great shock."
"[KG Urban] CEO Barry Gosin had led everyone to believe he would have the necessary funds to build the project," Mitchell said in the statement. "City leadership and the people of New Bedford relied on these assurances in casting their enthusiastic support for the project."
New Bedford voters had overwhelmingly approved the project back in June, with 73 percent voting in favor of it in a citywide referendum.
Had KG Urban's bid won the competition for the southeast region casino license — the only license left to be awarded in the state — New Bedford would have received a $4.5 million upfront payment, followed by $12.5 million a year once the facility opened, according to The Associated Pres
The deal had also called for "a projected $50 million environmental cleanup of the former power plant site, a $10 million harborwalk and the construction of a conference center and public marina," the AP reported.
A $650 million resort casino proposed for the Brockton Fairgrounds is now the only bid left for the southeast region casino license.
It's unclear what steps the state gaming commission will now take. It could seek additional casino bids for the region.