After months of talking, KG Urban Enterprises has reached a host community agreement with the mayor of New Bedford for a casino resort managed by Foxwoods on the waterfront of the historic whaling town.
Under the terms of the agreement, the New York-based developer will pay an upfront payment of $4.5 million to the city, with $12.5 million annually once the casino begins operation.
In addition, KG agrees to do an environmental cleanup of the site of a former NStar power plant and to build a conference center and harbor walk.
Andy Stern, principal of KG Urban, hailed the agreement. “We have an operator in Foxwoods with an unrivaled knowledge of the New England market, a robust host agreement with the City, and a stunning site and plan allowing for direct pedestrian access between the waterfront and New Bedford’s historic downtown.”
New Bedford Mayor Jon Mitchell was expected to attend this week’s meeting of the Massachusetts Gaming Commission to discuss the proposal.
The KG—New Bedford proposal is competing with proposals for the Brockton fairgrounds by Mass Gaming & Entertainment as well as the town of Somerset by Somerset on the Move, which now has a new name: Crossroads Massachusetts LLC, indicating its new association with Crossroads LLC.
Somerset just added two other players: Jim Karam, a real estate developer and a businessman considered one of the most well-connected Greater Fall River persons and Scott Butera, former chief executive officer of Foxwoods Resort Casino from 2011-2014.
The partners have to 100 acres of land owned by the city near Interstate 195 and near deep-water ports on the Taunton River.
The addition of so many new principals prompted Crossroads to ask for more time from the commission. That also means that the $350 million proposal for a casino previously announced will probably also be reworked.
The commission had set a March 16 deadline for initial applications. New Bedford and KG requested a 45-day extension to finish negotiations and Somerset asked for 21 days. The commission was scheduled to rule on their requests this week.
The commission also ruled that the $650 million Mass Gaming proposal for Brockton was “substantially complete,” and had provided all of the information required of it. A host community agreement election has been scheduled for May 12. If the residents of Brockton approve of the agreement, the proposal will go forward.
Now that the three applicants have passed the first phase hurdle, Phase 2 applications are due May 26. At that time applicants will need to go into details about their proposals.
The commission has said that it hopes to award a license this fall.
Waiting in the wings is the Mashpee Wampanoag tribe, which wants to build a $500 million casino resort in Taunton. It will be able to go forward with its bid for the southeastern license if the federal government agrees to put the Taunton land into trust.
Once that happens it plans to begin work on its First Light Resort and Casino.
In 2012 the Assistant Secretary of the Interior sent a letter to the tribe advising it that its trust application would be finalized in early 2013. The last action by the Bureau of Indian Affairs was the release of the draft environmental impact statement last September.
Most observers believe that the main complication to a decision is the 2009 Carcieri v. Salazar decision by the U.S. Supreme Court that said that tribes recognized after 1934 can’t put land into trust. The tribe was recognized in 2007.
In a related but separate development the House passed a provision to the state budget that would raise the threshold from $600 to $1,200 when a gambler must stop playing while the casino takes down tax information and subtract withholding.
Now the provision goes to the Senate.
Bay State Governor Charlie Baker said last week he is ambivalent about whether the threshold is changed or not changed. “I don’t have strong feelings one way or another about the $600 or the $1,200,” he said.
The federal government currently requires slot machines to stop at $1,200 to allow the tax information to be taken.
Casino companies preparing to operate in the state have testified frequently that keeping the $600 barrier could create problems and make it harder to attract players from out of state.
The gaming commission has recommended changing the requirement.
Meanwhile the state treasurer, Deborah Goldberg criticized Brown’s budget cutting pen, claiming that his cuts to her budget would hurt lottery profits.
Goldberg declared that the cuts, called 9C cuts, “have already hurt Lottery profits, in effect hurting unrestricted local aid to our cities and towns.”
The cuts will force the Lottery to get rid of plans to deploy new machines and games that were expected to increase revenue. If the cuts are implemented, the Lottery profits will decline by $12.4 million this year, she said.
“If you don’t come up with new games, you don’t bump up the revenue,” she told lawmakers.
