MGM Resorts International has completed the purchase of two parcels owned by the city of Springfield in the downtown area that will be part of the developer’s 0 million casino resort. The Massachusetts Gaming Commission awarded MGM the license for the Western casino zone in June.
The properties are the historic Springfield State Armory building and the former Zanetti School, both of which were damaged in the freak tornado that wrecked a section of the city in the South End in 2011. MGM paid the city a total of $3.2 million for the properties. It also paid property taxes assessed from when the city first decided to sell the properties to the developer.
The casino resort complex will also include a hotel, retail shopping and an entertainment venue spread out over 14.5 acres.
Although MGM and the city are going through the motions of going forward with the casino, including working on permits and other aspects of the project, the entire enterprise hangs on whether voters decide to repeal the 2011 gaming expansion law.
MGM Springfield spokesman Carole Brennan alluded to the election last when she commented, “While others are trying to stop progress, we continue to take the necessary steps that will ultimately allow us to bring jobs and new economic opportunity to Springfield and the region.” Company officials are meeting with the city’s water and sewer officials, and officials of MassDOT, the state’s Department of Transportation, as well as the planning commission.
The casino construction may be affected by the planned reconstruction of Interstate 91. However MassDOT is working with the developer so that the construction might occur in tandem, to minimize the effects of the two projects on local residents.
MGM officials told the commission that once the vote is decided in November that MGM would be in a position to begin work on the casino immediately.
Under MGM’s host community agreement with Springfield, it will pay the city $15 million upfront and $25 million every year.
Boston Metro Casino Zone
If Steve Wynn wins the license to build a casino resort in Everett, he plans to employ a fleet of custom-built catamarans, each carrying 49 passengers, to ferry patrons from Boston’s seaport and the downtown area to the resort. His company estimates that as much as 6 percent of the casino’s customers might ultimately use the taxi service. Three of the boats would be in service at any one time. They would be enclosed and heated, allowing year-round service.
Wynn proposes to build a $1.6 billion casino resort on the Mystic River.
If his estimates were accurate, that would allow him to decrease the estimates for car trips to the casino. Casino opponents complain that it will complicate an already congested traffic situation in the Charlestown neighborhood of Boston.
Wynn also argues that the shuttle service will provide a pleasant harbor cruise that can be aggressively marketed and will increase tourism traffic in the city.
Unsurprisingly, Wynn’s rival for the license, the Mohegan Sun, which wants to build a casino resort in Revere, is publically challenging his projections, calling them “wildly optimistic.” Jeff Mullen, a former Bay State secretary of transportation, who advises the tribe, commented, “My guess would be that fewer people would use the boats than are projected and that many of those who do will only make a one way trip. The result in both cases is that the amount of traffic on the street ends up being undercounted.”
The Metropolitan Area Planning Council’s transportation director, Eric Bourassa, calls Wynn’s claims, “in the realm of possibility.”
The commission is expected to choose between Wynn’s proposal and that of the Mohegans in September.
In a separate but related action, the Mohegan Sun has ended its 99-year lease of 152 acres in Palmer that, until last November, it hoped to use for a casino resort. The lease is with Northeast Realty.
The tribe’s announcement that it would not use the land for a non-gaming project prompted Northeast to issue the following statement that the action, “confirms Northeast’s position that Mohegan Sun never intended to legitimately pursue non-gaming development.”
The tribe and Northeast are involved in a lawsuit in which the real estate company contends that the tribe didn’t try to win the November election in which the town of Palmer rejected the casino project because it was already in negotiations with Suffolk Downs to switch its efforts to Revere.
Southeastern Casino Zone
In July the Massachusetts Gaming Commission voted to extend the deadline for applying for a casino license for the southeastern zone. An analysis by commissioner Enrique Zuniga showed that the market potential in this area is less than in the other two zones due to demographics and the uncertainty of whether the Mashpee Wampanoag tribe will be able to get permission from the federal government to put land it owns in Taunton into trust, and put a casino there.
According to Zuniga, “This region does have a little bit more of a risk when it comes to investing a large amount of money than the others.”
Repeal the Law
Proponents of the repeal, Question 3, are pointing to the problems that Atlantic City’s casinos are having, including announcement in July by Trump Plaza that it is issuing layoffs and may close operations in September. Reports are that the Revel and Showboat casinos, also in Atlantic City, are threatening to close unless they get buyers.
David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas, interviewed by the Patriot Ledger, said this could be the beginning of a trend. He points to downward revenue trends in Connecticut’s tribal casinos and the closing by Caesars Entertainment of its Tunica casino.
John Ribeiro, chairman of Repeal the Casino Deal commented last week, “I think the story in Atlantic City stands as a warning to Massachusetts voters.” He added, “I think in New Jersey and all the other casino states, the numbers don’t add up and the promises don’t pan out.”
Casino analyst Richard McGowan of Boston College says the situation in New Jersey is different from what the Bay State is trying to achieve. “Massachusetts is a little different. Massachusetts is basically reclaiming revenue from Connecticut and Rhode Island.”
Atlantic City’s problems are not worrying Governor Deval Patrick, who told the Patriot Ledger, “No more than I’m concerned about a shopping mall having a soft market. Markets come and go. They get stronger and they soften. That’s part of the economic cycle. The Gaming Commission has the authority to award fewer than the total number of licenses authorized by the legislation. I believe they’ll take those kinds of considerations into account.”
The 2011 law authorizes three casino resorts and one slots parlor. The slots parlor’s license has to been issued and so has the Western casino zone’s license. The licenses for the southeastern zone and the Boston metro zone have yet to be issued.
The campaign manager for Repeal the Casino Deal, Darek Barcikowski, said last week that his group is expanding its grassroots efforts in the last three months of the campaign.
“For us, this will pretty much be a ground game,” he told the Berkshire Eagle. “We will be on air with advertisements, but we might not be able to compete with the gambling industry.”
The group intends to draw on 200 volunteers, the same people who helped gather the init
ial 68,000 and additional 27,000 needed signatures to put Question 3 on the ballot. They plan to reach out to voters by knocking on doors, making phone calls and through social media. They know they can’t outspend their opponents, so they hope to out-argue them.
One of the volunteers, Lee Cheek, told the Eagle that she is impressed by medical research that concluded, “in brain imaging on cocaine and on the new electronic slot machines, you can’t tell which is on crack and which is in front of a slot machine.”
