Boston Fights for Casino Rights

New Boston Mayor Martin Walsh (l.) is asking that his city be treated both as a surrounding community and host community by the Massachusetts Gaming Commission in relation to the casino proposed by the Mohegan Sun and the Suffolk Downs racetrack.

The city of Boston last week waited until the last day possible before filing a request with the Massachusetts Gaming Commission asking it to designate the city as a “surrounding community” for both the Everett and Revere casino proposals.

The commission had turned down the city of Boston’s request for another 30 days to review documents relating to the two proposed casinos on the city’s doorstep, in Revere and Everett.

The city wanted to review its options before deciding whether to accept being designated as a “surrounding” community” for the two casinos, rather than a “host community,” as it would prefer, since that would give it more influence, and even a veto, over the two casino proposals.

The commission allowed the city to file for “surrounding community” status while at the same time pursuing the “host city” designation. In making its ruling the panel advised Boston’s mayor to negotiate with Wynn Resorts, which wants to build a $1.2 billion casino in Everett, and the Mohegan Sun, which is partnered with Suffolk Downs to build a $1.3 billion casino in Revere. The city would not lose its ability to press its claim as a host city, said commissioners.

Newly seated Boston Mayor Martin Walsh criticized the commission’s decision. “I am disappointed in the Gaming Commission’s failure to grant Boston the extension requested. The Commission has refused to grant Boston a mere 30 additional days to review 43,000 pages of documents, the vast majority of which we are seeing for the first time,” he said in a statement.

On his first day in office the mayor received briefings from representatives of both Wynn Resorts and the Mohegan Sun, including Mohegan Tribal Gaming Authority CEO Mitchell Etess.

Boston was once a “host community” for the original proposal by Suffolk Downs and its then partner Caesars Entertainment, but that fell apart when Caesars was forced to withdraw its name and Suffolk Downs subsequently lost a host community election in East Boston, while winning it in Revere. This prompted Suffolk to partner with the Mohegan Sun to re-purpose its proposal to only include 42 acres in Revere that the Sun will lease from the racetrack, which sits right on the boundary between Revere and Boston. The casino will be entirely within the city of Revere, however.

Boston was never considered as a host city for Wynn’s proposal for a casino resort along the waterfront with the Mystic River in Everett, although it fought to for that designation and former Mayor Thomas Menino claimed that a tiny piece of land on the Everett side of the river is actually Boston territory.

Walsh says that he wants an agreement with the Mohegan Sun “identical in all material respects” to the agreement that the former Mayor Thomas M. Menino signed with Suffolk Downs and Caesars Entertainment in 2013. That would include $30 million upfront and $20 million annually.

The city’s attorneys made that point to the gaming commission last week, “The fact that Mohegan Sun may have attempted to shift the casino so that it is located solely within the city of Revere in an effort to address the failure of the East Boston vote should not change the agreed upon commitments as articulated in the city’s existing host agreement for the Suffolk Downs property.”

Walsh is also calling for “more open dialogue” with the citizens of his city who might be impacted by both the Everett and Revere casinos. He asked the commission to “compel” both casino applicants to work more cooperatively with Boston and complains that the applicants have resisted giving the city relevant information.

A key difference between a “surrounding” vs. “host” community is that a host community can kill a casino proposal.

Meanwhile the Mohegan Sun’s recently released traffic mitigation plan for the Revere project is generating some heat, especially its “suggestion” that a lane of the Massachusetts Turnpike be closed to force traffic into one lane to reduce congestion. The logic is that drivers would be prevented from changing lanes to get to the casino off-ramp, thus creating less congestion. The casino is expected to generate an estimated 5,000 trips a day.

Traffic expert Jeff Larson of the Safe Roads Alliance, based in Massachusetts, commented, “It doesn’t strike me that a reduction in capacity is going to alleviate congestion. It might alleviate congestion in one area. It doesn’t make a lot of sense.”

Mohegan Sun produced the plan for the Bay State’s Department of Transportation. According to a statement released by the Sun, “These are suggestions only. They are not traffic recommendations relative to anticipated resort casino vehicle trips. Our road and infrastructure plans will not only mitigate anticipated resort casino visits, but also address long-standing local conditions.”

The department has said that it plans to conduct its own review of the casino plans to determine its likely traffic impact. Officials of the city of Boston are saying that traffic is just one reason why it should be designated as a host city since it is likely to bear more of the brunt of traffic than the city of Revere.

Suffolk Downs is committing to keeping horse racing alive at its racetrack for at least 15 years if Revere is chosen for the license. However, it says horseracing is likely to die there if the license goes to another. It sent a letter to that effect last week to the gaming commission to clear up the issue. Some critics had said that Suffolk had never made a commitment to keep racing alive, something it was required to do in the original proposal, when the casino resort would have included 162 acres in both cities. Suffolk Downs lost about $11.6 million last year in racing and has consistently run in the red since 2007.

Some of the revenue the company will get from the casino will allow it to invest in the racetrack, according to the letter.

Suffolk Downs CEO Chip Tuttle told the Boston Globe last week, “We wanted to unequivocally answer those questions and offer our commitment.”

The new Revere-only casino proposal faces that town’s voters on February 25. If it survives that vote, the commission will probably choose between it and Steve Wynn’s proposal sometime in May.

Meanwhile, the Everett casino proposal could be looking at more delays imposed by environmental cleanup of the former Monsanto chemical manufacturing site. Some experts in the field say that it could take months or years to clean up the site, and criticize Wynn’s proposal for how few pages of the 236-page application or the 600-page attachment it devotes to the issue. The application acknowledges that the cleanup would be “multi-million dollar” but does not go into specifics and it projects having the site cleaned up by 2017. Wynn’s general counsel told the gaming commission last month that a $10 million escrow account will be used. Then last week a Wynn spokesman upped the estimate to as much as $30 million.

However, Wynn is adamant that only private funds will be used for the cleanup.

Zygmunt J.B. Plater, of Boston College, an expert on hazardous wastes, told the Boston Herald, “It certainly isn’t an insurance policy that anybody I know would rely upon without more specific information. If I were a government official, there would have to be some type of insurance policy on top of the bond.”

A spokesman for the gaming commission last week said that the commission would not allow an applicant to proceed without, “adhering to all of the statutory and regulatory permitting requirements.”

So far the towns of Cambridge, Melrose, Lynn, Saugus and Somerville have petitioned to be designated as surrounding communities by both Wynn and the Mohegan Sun. Medford is the only community to be designated without having an agreement from Wynn. Chelsea and Winthrop have the designation, but have not yet reached an agreement with the Mohegan Sun.

Malden is the only town that has reached a surrounding community award with Wynn

Western Massachusetts

MGM Resorts International, which is the one remaining contender for a casino license in Western Massachusetts, has agreed to designate West Springfield as a “surrounding community,” which would make it eligible to be paid mitigation funds.

MGM wants to build an $800 million casino in the city’s South End.

West Springfield Mayor Edward Sullivan, who was just installed in that post, commented last week to the Republican, “It was a very productive meeting and they realize that West Springfield has some specific concerns about how a casino may impact us. They agreed to make us a surrounding community, and we’d like to negotiate the terms of a mitigation agreement in the next 30 days.”

Sullivan said his city does not have a specific mitigation amount in mind.

The town of Holyoke has negotiated an agreement with MGM for $50,000 up front and $85,000 each year and has obtained a commitment from MGM to employ local residents.

MGM previously reached “surrounding community” agreements with Chicopee, Ludlow, Agawam, Wilbraham, and East Longmeadow.

Northhampton, Hampden and Longmeadow have petitioned the commission to be designated as a surrounding community after MGM declined to do so. The commission will hold hearings on those requests later this month.

Northhampton is 20 miles from Springfield, however the petition makes the case that the town’s position as a weekend destination where tourists same its small shops and restaurants is threatened by the casino’s proximity.

A report prepared for the city by the firm of Camoin Associates of Saratoga, New York, concludes that the city could lose as much as 8 percent of its economic activity to the casino, or up to $8.8 million annually.

Northhampton’s petition cites, “grave and substantial impact on finances and local businesses due to the erosion of its status as the sole destination market in the Pioneer Valley.”

Longmeadow is requesting $1 million up front and $500,000 annually, which MGM has rejected as being much higher than what other communities are requesting. Agawa, and Chicopee, for example, will be paid $125,000 up front and $150,000 annually.

Of all the cities, Longmeadow is the only one that has a border with Springfield.

Slots Parlor

Penn National Gaming and Foxboro have reached a surrounding community agreement for the slots parlor that Penn has proposed for Plainridge Racecourse in Plainville. Penn had previously negotiated agreements with Wrenthem, Mansfield and North Attleboro. Penn agreed, among other things to “maximize use of local vendors” and entertainment venues. It also agreed to hire 90 percent of its workforce from local communities.

Penn’s rivals for the single slots parlor license include Raynham Park and the Cordish Cos. in Leominister.

Commission Chairman’s Lawsuit

In a separate but related development commission Chairman Stephen Crosby asked for more time to respond to a lawsuit filed in federal court against him by former casino license applicant Caesars Entertainment Inc.

The gaming giant claims that Crosby gave undue attention to the application of Wynn Resorts because a former business associate of his has a financial interest in the proposal. Crosby asked to have until February 14 to respond due to the complexity of the case.