Four Developers Remain Standing in Massachusetts

Four casino developers filed applications for licenses to the Massachusetts Gaming Commissions by the December 31 deadline. That is far fewer than were expected when the process began. MGM’s project in Springfield (l.) is the only one with a virtual guarantee to win a license.

Four Developers Remain Standing in Massachusetts

When the New Year dawned, four casino developers had submitted applications for licenses to the Massachusetts Gaming Commission, perhaps a third of the number that was anticipated, although many more than that began the process nearly two years ago.

One developer remains on the field in the Western Massachusetts gaming zone: MGM Resorts, which wants to build an $800 million casino resort in Springfield. Voters in two other towns turned proposals. Springfield voters said yes.

In the Boston Metro zone, Wynn Resorts proposal for a $1.3 billion resort in Everett and the Suffolk Downs/Mohegan Sun $1.3 billion proposal for 42 acres in Revere remain in the game.

Now follows a public review process that the commission anticipates will conclude in May with the awarding of licenses. After an initial review of the applications, the commission will invite public comments on its website and at least two public hearings.

The applicants will give 90-minute presentations at a January 22 hearing.

The commission will focus on five areas: including an overview, finances, how each casino would affect the local economy, construction and design and mitigation.

In the Southeastern gaming zone, the Mashpee Wampanoag tribe’s application is still in play, strengthened by the Bureau of Indian Affairs inaction on the tribe’s compact with the state at the end of the 45 day review period, which has the effect of approval. The tribe wants to build in Taunton, where voters have approved it. KG Urban has applied to build in New Bedford, along the waterfront. The process for the southeastern zone is following a different schedule from the other two zones.

Boston Metro

The two remaining competitors for the Boston metro license, the Suffolk Downs/Mohegan Sun and their proposal for Revere and Steve Wynn’s proposal for Everett, have each reached agreements to work with local builders unions.

The Mohegan Sun announced last week that it had signed agreements with the Metropolitan Boston Building Trades Council and the New England Regional Council of Carpenters.

Mark Erlich, executive secretary-treasurer of the carpenters union, said in a statement, “With the unemployment rate of skilled trades still high, families are struggling and a potential project of this size is critical to getting people back to work.”

The Sun has also moved to allow its permanent employees in Massachusetts to form a union—if a casino were to be authorized—through a memorandum of understanding with a number of unions that obligate it to support such efforts. As many as 2,500 permanent jobs would be created if the casino with 4,000 slot machines and 100 gaming tables is built.

Mitchell Etess, chief executive officer for the Mohegan Tribal Gaming Authority, hailed the deals: “A Mohegan Sun resort casino in Revere will bring thousands of good union jobs and a boost in economic development and tourism to the area.”

The unions in question are the International Brotherhood of Electrical Workers Local 103, Teamsters Local 25, United Automobile Workers and Laborers Local 22.

The people of Revere will vote a second time on a casino at Suffolk Downs February 25. The first time they voted, in November, they approved of the casino concept for both Revere and East Boston by 60 percent. Because East Boston did not approve of the project, Suffolk Downs revised the project to be located at Revere only and brought on board the Mohegan tribe as owner/operator, with Suffolk Downs relegated to the role of landlord. This revised project required another vote of the host community agreement, the gaming commission ruled.

Union support is seen as a needed element in getting voters to turn out.

However voters may also be influenced by what appears to be the most generous host community agreement so far in the Bay State, which begins by paying the city $35 million up front, adds $45 million in infrastructure improvements and commits to giving a hiring preference to local residents in building the casino and in permanent jobs.

Last week a strong and vocal supporter of a Revere casino, Rep. Kathi-Anne Reinstein, a member of the House leadership, announced her resignation effective this month. She will accept a position in the private sector. Reinstein has been the assistant majority leader of the House.

Wynn Resorts announced its own union deal last week, a preliminary agreement with the Building and Construction Trades Council of the Metropolitan District and the New England Council of Carpenters.  “If we were to receive the license, we would partner with labor unions to forge mutually beneficial agreements akin to those we enjoy with our unions in Las Vegas,” said a statement from Wynn.

Critics of the Wynn proposal who have been reading its license 236-page application, which is now available online, say it is short on details of how it would clean up the hazardous materials in the 34-acre former Monsanto chemical plant site where it hopes to build.

Wynn’s attorney told the gaming commission last year that a $10 million escrow account by the seller will cover costs of the environmental cleanup. No public money will be required.

Some environmental experts believe that the cleanup could delay the project, perhaps for several years.

Western Zone

MGM’s Resorts has already won its vote in Springfield, but it continues to roll out goodies for the city, which will, of course, influence how the commission looks at its proposal. In addition to committing to $25 million in annual payments to the city and paying for improvements to parks, the developer has promised to sponsor and advertise several entertainment events every year at concert venues in the city.

The state’s casino law requires that each developer negotiate mitigation deals with “surrounding” communities. So far MGM has agreed to pay $100,000 apiece to the towns of Agawam, Chicopee, East Longmeadow, Ludlow and Wilbraham.

It declined to designate Longmeadow or West Springfield as such, which has prompted both to petition the commission to require that MGM treat with them.

Longmeadow claims that its town will suffer considerable traffic issues and had asked for $1 million up front.

Longmeadow town manager Stephen Crane, quoted by WNPR, said, “My number one goal and the number one goal of the selectboard is to protect the interests of the residents on things that are within our control. It is in within our control to negotiate a surrounding community agreement. The decision on whether MGM gets a license to open a casino in Springfield is not within our control, it is up to the commission.”

Northhampton, which is 16 miles from Springfield, is also planning to petition the commission to be designated as a “surrounding community.”

Some business owners in Northhampton say they worry that the casino could harm their town’s position as a tourist destination, offering dining, boutique shops  that often doubles its population on weekends.

An executive for MGM, Mike Mathis, said this week that his company does not believe that Northhampton qualifies as a surrounding community, but that the company does, “view them as an important entertainment and tourism partner for the region. We intend to continue to meet with the mayor’s office and the town’s business leaders to best leverage both the Northampton and MGM Springfield brands to draw new tourists from outside of the area into Western Massachusetts.”

If the commission designates any of these towns as “surrounding communities,” the developer and the town will have 30 days to negotiate an agreement or the commission can force them into arbitration.

Slot Parlor

The Board of Selectmen of Easton last week voted to approve a surround community agreement with Raynham Park LLC in which the developer would pay the city $362,500 annually if it wins the slots parlor license. The developer also committed to buying a new police cruiser and favor locals in hiring and purchasing.

The last minute deal means that the city and racetrack will not be forced into arbitration by the gaming commission. The town initially requested $1 million a year.

Repeal the Law

Hanging over the heads of all of the casinos that may be approved this year is the initiative that would undo the 2011 law authorizing them. It has been given a place in the November ballot, although that could still be scotched if the state’s supreme court rules that it is unconstitutional, as State Attorney General Martha Coakley asserts.

Under state law, the legislature has the option of acting on the measure before the vote. It is seen as unlikely that lawmakers would repeal the law since the licensing process is so far along.

The ultimate fate of the initiative is not so clear, given the mixed signals that voters gave casino proposals in the Bay State in 2013. As several political observers have noted, voters support the idea of casinos generally, but don’t necessarily support them in their own town. Governor Deval Patrick typifies this attitude. While a strong supporter of the gaming expansion law, he told reporters recently that he would vote against a casino for his own city, in the Berkshires. The level of support seems to break down to favoring casinos in urban areas with economic problems and opposing them in towns with higher incomes.

Helping the anti-casino forces is the increasingly muddy approval process that is further complicated by the fact that a disgruntled former applicant, Caesars Entertainment, has sued Massachusetts Gaming Commission Chairman Stephen Crosby, alleging favoritism for its erstwhile rival, Steve Wynn. Caesars spent $100 million on its proposal before dropping out after its ethical suitability was challenged.

Former Bay State Governor Michael Dukakis seemed to speak for many in the state when he commented recently, “Watching the way this is playing out, for those of us who opposed the casino legislation in the first place, just reinforces our concerns.”

Former state attorney general Scott Harshbarger, who is assisting the anti-gaming effort, said last week, “This is a mess, and it’s going to get worse, not better.”

Are casino developers worried about this effort?  Chip Tuttle, chief executive officer of Suffolk Downs, and no stranger to odds making, when asked about the initiative, commented, “I’m worried about a meteor hitting, too. But there’s not much I can do about it.”