Last Massachusetts License Up for Grabs

The final gaming license in Massachusetts is at stake, and the competition is heating up, with New Bedford taking the lead role, where a proposed casino would have a view of the harbor (l.). Meanwhile, MGM has encountered another historic hurdle in Springfield, and ethics rules are shaking out for elected officials.

KG Urban last week formally asked the city of New Bedford to schedule a June 23 host community election to let residents vote yea or nay on the New York-based developer’s proposal for a 0 million casino along the waterfront of the historic whaling town.

That approval is required before the developer can proceed to Phase two of the approval process, submitting a detailed plan for the casino resort. KG has already reached its host city agreement with New Bedford, which they signed on March 19.

The gaming commission has twice pushed back the deadline for submitting a Phase 2 plan. Most recently commissioners postponed the May 26 deadline to at least July 10 and possibly longer.

KG is still under the gun, however, because it has a May 4 deadline to demonstrate that it has financial backing for its proposal.

Both Mayor Jon Mitchell and the city council have expressed strong support for the project. Mitchell has promised to make every effort to inform the public about the details of what he calls “a very strong host community agreement that has key local protections for the downtown and waterfront as well as benefits to residents and businesses.” The city has committed to holding multiple town meetings to address residents’ concerns and answer questions.

Andrew Stern, managing director of KG Urban, told South Coast Today, “We are all on same side at this point. We’re united in making this happen, the mayor in particular.”

City officials claim that the project will generate more than 2,000 building jobs and nearly 4,000 permanent positions.

Those figures don’t impress the Rev. David Lima of Inter-Church Council of Greater New Bedford, who told the Standard-Times that the proposed casino would be “devastating,” for the town. He believes it will create crime and negatively impact quality of life.

A local elementary school teacher quoted by the Standard-Times agrees, “This is home to me,” she told a reporter. “I don’t want a casino to take away from downtown or from this area.”

Some suggest that the New Bedford casino has the edge among the three casinos that have been proposed for the Southeastern zone (Region C), at least aesthetically. Jack Spillane of South Coast Today wrote last week, “With picture windows overlooking the scallop boats and tugs coming and going, it would be visually breathtaking in a way other Massachusetts casinos won’t.

He added, “A towering harborside hotel view of the wonder-of-the-world hurricane barrier and cargo ships coming and going to the nearby port terminal would provide a sense of place that a former fairgrounds with a highway landscape or an out-of-the-way old factory city in the sleepy Connecticut River valley would find hard to compete with.”

Building at the historic whaling town of New Bedford would involve renovating historic buildings as well as cleaning up the 27-acre former NStar power plant site.

Because fishing is a shrinking industry in the area, many local residents feel that a casino is just the thing to make up for the job losses.

He was referring to the rival proposals, one for the Brockton fairgrounds and the other for Somerset, proposed by the Crossroads Massachusetts/Somerset group. The developer has so far revealed few details of its proposal.

Despite the lack of news regarding the Somerset proposal, that town’s Board of Selectmen Chairman Donald Setters said last week that he’s confident a deal can be made in time to meet the commission’s requirements. “I’m more optimistic that the applicants are going to bring forth a proposal,” he told the Fall River Herald Times. “We have been assured they expect the application deadline to be met by May 4, and the applicant will meet all of the requirements of the Mass. Gaming Commission.”

This is election time, and Setters has been a very loud exponent of a casino in Somerset as he faces the voters in three weeks. He added, “The applicants are taking their time putting together the best possible applicant group with all supporting documentation.” Sellers said he is angling for a more lucrative host community agreement than either Brockton (at $10 million annually) or New Bedford, at $12.5 million a year, will receive.

In Brockton, Mass Gaming and Entertainment has completed its Phase 1 requirements for its proposed $650 million project that would share the property with the existing state fairgrounds. A host community election is scheduled for May 12.

Recently the Massachusetts Gaming Commission has been getting some not so subtle pressure from interests outside of the Southeastern gaming zone not to issue a license for that region. The Boston Globe published an editorial calling for the commission to stop at the two licenses it has already issued.

MGM Springfield Historical Building Problem

MGM Springfield has encountered another obstacle along the way of opening its casino resort in the South End of the third largest city in Massachusetts: The state Historical Commission has asked the developer to study the feasibility of saving the rear section of the old State Armory from being razed. MGM already plans to preserve the front part of the building.

Until the issue is resolved MGM cannot move forward with its $800 million casino resort on 14.5 acres.

Most of other issues on historical preservation have been resolved. The State Armory is the only part of MGM’s historic mitigation plan that the commission wants to get a do-over. That plan was recently approved by the Springfield Historical Commission, although by a divided board.

The rear section of the armory was partially damaged several years ago by the freak tornado that ravaged the South End of Springfield.

Although the commission is an advisory body, its opinion may carry some weight with the Massachusetts Gaming Commission, which has final authority over what MGM is required to do.

A spokesman for the historical commission said the two parties hope to have a final resolution within two or three weeks. There has been some discussion about MGM providing funding for a historical preservation fund for Springfield.

MGM’s efforts earned a letter of support from Mayor Domenic Sarno, who wrote last week, “As recognized by the Massachusetts Gaming Commission (“MGM”), the Project demonstrates MGM Springfield ‘s strong commitment to the history of Springfield and promises to maintain a commitment to Massachusetts’ historic themes of innovation, inclusion and community in its development.”

Meantime the city of Springfield has moved its Department of Health and Human Services office to make way for the demolition of the office and the casino. The relocation means that the city will pay a higher lease for office space, $177,000 a year, instead of $139,305.

MGM says that it is keeping its commitment to reach out and employ a large percentage of its workforce from minorities. It claims that almost one third of its contracts have been to minority-owned businesses. Nevertheless it is being hit with a lawsuit by minority business owners who claim they are being discriminated against.

The company also claims that it has hired about half of its workforce from the surrounding Prince George’s County. Critics say they are less interested in seeing claims than they are in examining the company’s books so they can see for themselves.

The lawsuit was brought by the Maryland Business Clergy Partnership, which claims that one company awarded a contract misrepresented itself as a minority business.

MGM denies it, and last week declared, “The allegations in this complaint are absolutely baseless, and we will vigorously defend against this lawsuit.”

It claims that 31 percent of its construction budget of $64.5 million went to minority owned business last year.

Although it has not yet been cleared to begin construction, MGM said last week that it is nevertheless trying to live up to its host community agreement with the city. The city and MGM held a large ceremonial groundbreaking in March. No actual construction has happened yet.

However, MGM delivered a 50-age compliance report on April 1, as required by the agreement. The report highlights such things as the above-noted commitment to hire minority companies, as well as detailing the more than 200 businesses that have signed up to be potential vendors.

Besides recruiting local residents internships and management training, the company has purchased $30 million in real estate and paid the city $1 million so far.

Despite delays, MGM still plans to open in 2017, with 3,000 slots, 75 tables, a 250-room hotel, eateries, offices, residences a bowling alley and a cinema.

Ban on Gambling by Officials

Meanwhile the Massachusetts Gaming Commission is mulling a proposal that would prevent elected officials of cities such as Springfield, Everett, and Plainville from playing at their local casinos, although not from physically being there.

The purpose of the ban would be to prevent elected officials from getting quid pro quos from casino operators.

The town moderator in Plainville, Luke P. Travis, is offended that he is considered potentially corrupt, and last week wrote the commission to express his ire. He said such a rule might prevent some people from accepting appointments to positions such as his, where he is paid $25 a meeting to run the town meeting, and performs his duties three times a year.

He wrote, “Such a rule is overreaching and seems to smack of a violation of constitutional rights as a citizen.”

His letter was read at the most recent commission hearing, and Chairman Stephen P. Crosby asked staff to ask other local officials for their opinions before the panel votes on the proposed rule.

Plainville Park Casino, the first casino to commence operations in the Bay State, will open its doors on June 24. It is the state’s only slots parlor, and will have 1,250 machines, which it will share with an existing harness racing facility.

Coincidentally the commission received revised plans for the $225 million Plainville casino from Penn National Gaming, the operator. The plans highlight a larger meeting room and a smaller food court, while giving more details on a stage and dance floor.