The land transfer of 115 acres in East Taunton that will make the 0 million Mashpee Wampanoag Project First Light resort casino possible was finalized last week .5 million, paid to several property owners.
The Taunton Development Corp., a non-profit, sold 53 acres of undeveloped industrial park land for $5.64 million. The Maggiore Cos owned fifty acres, purchased for $19.2 million.
In September the Bureau of Indian Affairs informed the tribe that it would be putting 151 acres in East Taunton into trust, making it available for a casino.
The tribe has held an option on the lands for several years, so the sales purchase was not unexpected. The tribe says it expects to begin construction next spring. It claims that it will create 2,500 jobs and has committed to paying the city of Taunton $8 million annually.
Meanwhile, Mass Gaming and Entertainment, which hopes to be awarded a license to operate a $677 million casino on the Brockton Fairgrounds, argues that Massachusetts Gaming Commission would be making “a big gamble” if it doesn’t award the license because of the tribe’s casino.
It warns that the tribe’s casino will be tied up in litigation for years and may never open. At the same time it argues that both casinos can co-exist to the benefit of the state, in spite of the fact that if the Brockton casino is allowed to build that the tribe won’t owe the state any money on its profits.
Appearing before the commission last week Neil Bluhm, chairman of Rush Street Gaming, whose affiliate is Mass Gaming and Entertainment, declared, “You are taking a big risk that you’ll never have a tribal casino, and you will have crushed Brockton that needs this desperately,”
“Frankly,” he added, “I don’t think you have much to lose by issuing this casino to Brockton, because you’re helping Brockton, you’re going to make more, you’re going to create more jobs. And if this tribal casino, if it’s ultimately determined that they can open, it’s going to be successful.”
The commission is expected to decide in March whether to issue a commercial license, and the tribal casino is definitely a factor in that decision. It has already awarded licenses to a slots parlor in Plainville; and in the Western part of the state to the MGM Springfield, and to the Boston metro area (the Wynn Everett). The southeastern zone is the final zone awaiting a decision by the commission.
When the legislature passed the gaming expansion act of 2011, the Mashpee tribe was given a preference, as long as it met certain criteria, the final one being to put land into trust. That final leg took so long to achieve that the commission went ahead and opened the region to commercial bids.
Even though the BIA has made its decision, that ruling is widely expected to be challenged in federal court due to the fact that it seems to violate the U.S. Supreme Court’s 2009 Carcieri v. Salazar ruling that says that tribes recognized after 1934 cannot put land into trust.
During Bluhm’s presentation, an attorney for his company who specializes in Indian law, David Tennant, called the BIA’s decision “seriously flawed.” He noted that several tribes have so far unsuccessfully petitioned Congress to amend the law to “fix” Carcieri.
Tennant predicted that the tribe’s financing would melt away once the court challenge is issued. The casino company says it is meeting with several groups planning on filing such lawsuits.
Said Tennant, “These are serious problems from the lending side.” He told the commission, “In our experience, we are not aware of any tribal casino that, in the face of a pending Carcieri lawsuit, actually went forward with shovels in the ground to actually continue with their project. The capital, the investment, and the financial support dried up, and it prevents that kind of continued development in the face of such significant legal questions.”
A skeptical Commission Chairman Stephen Crosby noted that the tribe’s financial partner is the Genting Group, one of the largest casino companies in the world.
Bluhm replied, “We are not questioning Genting’s resources. The question is, would a sound businessman want to risk that kind of money in light of the potential reversal of this case? You might say, initially I will, but once you get down to it, would you really do it?” The tribe would still need a lender, said Bluhm, who questioned whether a lender would make such a risky move.
The Brockton proponents assert that their casino will attract 4 million visitors each year and rake in over $2 billion in revenues within five years of opening its doors and pay $500 million in state taxes. It would pay $10 million in taxes annually to the city of Brockton.
Mass Gaming and Entertainment is the sole remaining applicant for the southeastern license. It proposes a red brick complex harkening to “conservative New England architecture,” with a 92,000 square foot casino floor housing 2,100 slot machines, 124 gaming tables and a poker room. It boasts a 250-room hotel, 3,000 SF of dining, some retail and a 25,000 SF convention space.
The project would take about 30 months to build. The company has committed to $9 million in road and infrastructure improvements.
Mashpee spokesman Sean Gonsalves, who spoke after Bluhm, called his contentions “dubious claims,” and pointed out that the commission had previously heard claims that the Mashpees’ land would never be put into trust. He added, “Since the Carcieri decision in 2009, there hasn’t been a single successful lawsuit to stop land in trust from going forward. Our focus continues to be on moving forward with Project First Light in Taunton.”
MGM Springfield
The gaming commission November 19 will hear details from MGM Springfield about its proposed 14 percent downsizing of the $800 million Springfield casino, including replacing its 25-story hotel with a six-story hotel, but with the same number of rooms. The hotel is being moved to a new location within the resort’s footprint. Housing is being moved off the casino campus offsite and the parking structure is going to lose 387 parking spots. The footprint will shrink from 15.6 acres to 14.
During a hearing that focused exclusively on the project’s environmental impact, MGM’s traffic engineer last week told the panel that the design changes will result in about 1,100 few car trips per day, an 8 percent drop. Any changes in a project trigger’s another environmental review to see if a complete new study is required.
This prompted Chairman Crosby to ask, “Which is the chicken and which is the egg? Did the expected reduced use drive a reduction in space or does your voluntary decision to reduce space have the consequences of reducing use?”
The attorney for MGM, Jed Nosal, said the commission would get a comprehensive explanation for all the changes at the November 19 meeting.
Crosby said he is especially interested in hearing about the “back of the house” deletions that have been proposed. “It’s funny to me that you can just willy-nilly drop 25 percent in your back of house space,” said the chairman. “Either somebody was sloppy in building the plans to begin with, which I doubt…or something’s given up.”
MGM say it hopes that the changes won’t require another environmental review by the state. Margaret Briggs of MGM’s environmental consultant Epsilon Associates, told the commission, “The project actually is slightly reduced in scale, and the impacts are reduced in scale, All the mitigation measures that were promised in the final environmental impact report are still agreed to.”
Besides appearing before the commission, MGM has also submitted a new site plan to the Springfield Office of Planning and Development and a hearing is planned on those changes.
Although Springfield city leaders have indicated shock over MGM’s proposed changes, industry experts say that such changes happen more often than the industry would like to admit.
In Maryland, for example, the Sands Casino Resort was forced by the economy to delay building a hotel just a short time after being granted a license to build a casino resort, including a golf course.
Shortly after the state legalized gaming in 2012 three casinos reduced the number of slot machines and added more tables, which gave a headache to lawmakers, although the state’s gaming control commission approved it.
The Republican quoted Joseph Weinert, executive vice president of Spectrum Gaming Group as saying, “There’s often a lag between when a casino company unveils its plans and then when it gets to the time it actually puts a shovel in the ground.” He added, “A lot of conditions can change between that.”
Besides the commitment MGM owes to Springfield, he said, the company has a duty to its shareholders to get the best possible return.
When Pennsylvania was awarded a casino license and then saw the economy lurch downward, it delayed completing construction on its Pittsburgh casino until it acquired new investors, he noted.
Foxwoods obtained a license for a Philadelphia casino then had to scale back. That didn’t satisfy the Pennsylvania Gaming Control Board, which revoked its license and gave it to another company. Foxwoods is appealing.
According to Richard McGowan, a professor at the Carroll School of Management at Boston College whose specialty is gaming, hotels frequently fall victim to casinos that find that they are in a more competitive market than they originally believed. He told the Republican, “They realize they will be strictly a regional casino, not a destination.”
MGM, he says, has realized that the competitive market has changed since its license was granted, with more competition in Connecticut and even within Massachusetts itself in the offing.
State Senator Stan Rosenberg, president of the Massachusetts Senate, who helped pass the gaming expansion act, says he learned through his own research that frequently casino developers obtain licenses and then either don’t build the promised casino at all or drastically revise the plans. He says he and other lawmakers built safeguards into the law to keep that from happening.
One such safeguard is that the Massachusetts Gaming Commission must approve of any such changes and that a casino developer must put a large amount of money into escrow that is held until construction is completed. The commission also has the ability to impose a fine of as much as $50 million and revoke the license entirely if it determines it has acted in bad faith.
Rosenberg told the Republican, “It doesn’t mean there can never be any change, but the Gaming Commission has responsibility and has the authority to ensure that the project doesn’t become a shadow of itself.”
Whether the city council and the gaming commission agree that MGM has compelling reasons for making the change will be the question, since their assent is required.
Springfield Mayor Domenic Sarno gave strong indications that he still supports the casino when he asked three long serving members of the Historical Commission who had opposed the casino to resign. He sent letters to Chairman Ralph Slate, member Robert McCarroll and Marjorie Guess asking for their resignations and thanking themselves for their service.
This prompted one of the ousted commissioners to quip: “I guess I forgot the classic lesson about casinos. The house always wins.”
A spokesman for the casino blandly said that the changes in the commission’s makeup were part of several changes to city commissions and had nothing to do with the casino.
The Historical Commission and MGM wrangled over several issues having to do with the demolition of historic structures that are within the area the casino will be built. The final approval of the casino design was made on a 3 to 2 vote. Slate, McCarroll and Guess were the most critical of the need to tear down several historic properties, with Slate and McCarroll the two who voted against approval.
Despite the fact that it won’t open until 2018, the MGM Springfield has put up three billboards in the city along Interstate 91 to announce its progress.
The billboards announced that the casino is “moving forward,” “building excitement” and “working hard.” According to MGM Springfield President Mike Mathis, interviewed by 22 News, “The billboards are our way of letting people know that MGM is working diligently toward a 2018 opening, notwithstanding our recent challenges.”
A spokesman added, “As we ramp up our on-site efforts, we want to help people understand there is a good deal of work going on now that can’t be seen yet from the street. We have an ambitious end-of-year calendar that kick offs with public presentations and announcements next week.”
The billboards come in the wake of criticism the company has gotten for closing its community services office in the downtown area, although MGM says it plans to reopen the office elsewhere in the city.
Wynn Everett
Wynn Resorts, which is working to build a $1.7 billion casino resort in Everett, across the Mystic River from Boston, has so far awarded more than $3 million contracts towards veteran-owned businesses, exceeding the $500,000 goal that it agreed to.
Wynn Everett President Robert DeSalvio announced the figure on Veterans Day:
“It’s fitting during Veteran’s Day week to recognize the veteran-owned companies that we are partnering with at Wynn Everett,” he said in a statement.
Illegal Slots?
At least one member of the Massachusetts Gaming Commission, Enrique Zuniga, believes that the video poker machines that many VFW and American Legion posts are illegal. The machines are used to raise funds for the posts.
Zuniga expressed that opinion last week in a Committee on Economic Development and Emerging Technologies hearing. “The question is, who is going to enforce that?” He noted that the commission hasn’t taken a formal vote yet on the machines.
The committee meeting was held on a bill by Thomas J. Calter that would allow veterans posts to have as many as ten of the machines.
Since the Plainridge Park Casino opened in Plainville earlier this year some police have started to shut down the machines. They are considered legal if they are marked as being for entertainment only, and the posts collect a fee for playing them. Winners get cash. Some posts take in thousands of dollars from the machines. The funds they collect used for needy veterans and to fund charitable activities, even post-sponsored sports teams.
