The city of Springfield, Massachusetts has deemed “complete” the revised site plan application for the 0 million MGM Springfield casino. Next step is a public hearing and city council vote, which must occur within 45 days.
It has been a month since the city bounced back MGM’s earlier site plan as “incomplete.” At this point the city may add amendments and conditions to the revised and downsized plan, which MGM submitted two months. Included in the 10 percent downsizing is the elimination of the 25-story hotel, replaced by a six-story hotel outside of the resort’s 14.5 acre footprint, but with the same number of rooms: 250.
MGM insists that none of the reductions will affect amenities that customers see. They insist that all of the eliminations are to the “back of the house” operations.
Despite the downsizing, rising building costs have kicked up the final cost of the project from $800 million to $950 million, according to MGM’s President William Hornbuckle, who revealed this information at a forum last week where he explained the reasoning behind the downsizing to city officials.
“The reality is that this project will exceed $950 million. I wish it didn’t. I wish we could do it for less. But we can’t. We made commitments to this community we are going to honor,” he said.
Hornbuckle disparaged an earlier report that the reduction was 14 percent, saying it was actually more like 10 percent. The only exception, he said, is the bowling alley, which will be 10 lanes, not 15.
The changes must receive city and mayoral approval before they can go forward.
Meanwhile, delays in the MGM Grand as well as in the southeastern casino zone and the fact that four years after the legislature approved of the gaming expansion act only Plainridge Park slots parlor has opened has driven down public confidence in the gaming industry in the Bay State.
The Western New England University Polling Institute survey reported last week that 51 percent of those polled support the state’s plans for casinos, compared to 59 percent in the spring of 2014. This is the lowest support for gaming since the university began polling for it in 2009.
At the same time, opposition to casinos has increased from just over 33 percent in 2014 to 41 percent.
Tim Vercellotti, director of the polling institute, commented, “As state and local governments and developers wrestle with the details of establishing the casinos, residents may be developing some reservations about the projects.”
The poll also indicated support for state regulation of fantasy sports games, with 42 percent in favor of regulation and 27 percent opposed. The Massachusetts Gaming Commission has scheduled hearings on the issue for December 10.
And the Plainridge Park casino itself has provided bad news, with the casino recording three months of declining revenue in a row. In October the casino brought in $12.9 million in gross revenues, compared to $12.6 million in September. This is actually a decline due to October having 31 days compared to September’s 30 days. The two months before had also recorded declines.
The casino’s revenues at the end of its first year are projected to be $176 million, compared to the $200 million the state had predicted.
The only casino in Massachusetts opened with $389 per machine revenue in July and now rakes in $277.
That number is expected to decline when the MGM Springfield and Wynn Everett open in 2018.
One theory for the current decline in revenues is the number of home games of the New England Patriots. That’s the explanation Plainridge Park Casino officials gave the Massachusetts Gaming Commission at last week’s meeting. Gillette Stadium is located five miles from the casino.
General Manager Lance George said the casino is in discussions with the team to join forces on promotional schemes to appeal to football fans.
