Springfield Officials Not Happy With MGM

Alarmed by first the elimination of a 25-story hotel and then a downsizing of the entire project by 14 percent, Springfield, Massachusetts Mayor Domenic Sarno (l.) last week demanded to talk to top executive of MGM Resorts, which is planning an $800 casino resort in the city.

Angry officials of Springfield, Massachusetts have summoned the top officials of MGM Resorts to explain their design changes for the casino planned for the city’s downtown South End. One city official has said MGM’s credibility with the city, “is at an all-time low.”

Meanwhile the city’s planning department told MGM that its site application is “incomplete” and asked for more information.

Mayor Domenic Sarno, who remains a supporter of the casino, although a less unabashed supporter than before, asked MGM’s C.E.O., President Jim Murren, MGM Springfield President Mike Mathis and MGM President Bill Hornbuckle to come to Springfield for a meeting with him and the city council.

The “invitation” to the meeting was short-notice and Murren said so, but added, “Regardless, because of my enormous respect for you and your office, and my personal affection for you, I will be there with you that afternoon. I hope that my presence will help prove to you and your colleagues how important the MGM Springfield project is to our company.”

Any changes to the project must be approved by the mayor and the council, and, ultimately by the Massachusetts Gaming Commission.

Without consulting the council MGM had, through a filing with the Massachusetts Department of Energy and Environmental Affairs, disclosed that it planned to reduce the square footage of the casino resort by 14 percent. This combined with the previous announcement that MGM planned to replace the 25-story hotel tower with a much lower profile six-story hotel sparked loud protests from the city.

However, according to Governor Charlie Baker the city’s leaders are still positive about the project. Last week he told 22News, “Generally speaking, everybody else is still pretty bullish on the project.”

That doesn’t mean there aren’t significant doubts on the part of the city government and city residents. The Republican declared in an editorial this week: “When MGM International declared its plans for a Springfield casino, complete with entertainment and retail complex, it promised its commitment to be a good partner to the community.” It added, “For the first time, that commitment is being questioned not just by skeptics of the entire project, but by those who stood by MGM and took its officials at their word.”

The 14 percent downsizing includes a reduction of retail, dining and entertainment, although the gaming floor space will only be reduced by 500 square feet.

The imbroglio comes when city officials and their challengers are in the midst of an election campaign. At a campaign forum last week four incumbents used the opportunity to bash MGM. One incumbent, Kateri Walsh, claimed that the resort’s “wow factor” had been eliminated with the dropping of the hotel tower and that she was “disturbed” by that. She claimed that MGM had embarrassed Sarno.

“I am concerned we are not going to get a first-rate casino for the city of Springfield,” she said. “I do not want to end up with a box that is not going to have the draw and excitement (MGM) promised.”

One candidate compared the change to being promised “a Mercedes” and given a “Chevy.”

Another said that he didn’t trust MGM and said perhaps it was time for the city to consider “an exit strategy.”

Challengers to the incumbents used the opportunity to say that perhaps council members hadn’t don’t enough due diligence on the project to begin with.

Several city council members held a news conference last week at City Hall when the changes to the MGM Springfield became known. At that conference City Council President Mike Fenton said he wouldn’t support any changes that weren’t better than what they were originally promised.

Councilor Bud Williams declared, They say one thing to your face when they meet you, and then they go and do something else.” He added, “Their credibility, in my estimation, is at an all-time low.” Later he said, “They’re playing games with us, they think we’re a small-town operation.”

Williams last week called for a temporary halt in permits issued for the project. In a letter to the council president he wrote, “I am respectfully asking that you make a formal request to stop all permits from being given to MGM until the City Council has officially voted on a site approval with the proposed changes. MGM has already taken out 62 plus permits.”

While criticizing MGM for its lack of communication, councilors also conceded that they are committed to the jobs and economic uplift the project will make to give up on it at this point. It is, after all, the largest development being contemplated for the city.

MGM President Mike Mathis told 22News last week that the expense of the project will still be about $800 million.

Council member Clodo Concepcion noted that MGM has said that the number of jobs won’t be affected by the changes. “You’ve got to know before you talk,” he said.

MGM’s Murren sent a letter of apology about the “miscommunication” to the council and mayor last week. He wrote: “I regret and apologize to you, personally, that our desire to aggressively advance permitting and construction of the project has recently frustrated our ability to work more collaboratively with your team,” adding, “As we continue to move forward with our necessary approvals, we commit to doing a better job, including providing comprehensive responses to the questions your team raised in the City’s October 22 letter.”

Regarding the city’s Office of Planning and Economic Development’s rejection of MGM’s plans, Chief Development Officer Kevin Kennedy said blandly, There is nothing dramatic about that. It is just that we need more information.” He added, “I am pretty patient about getting this. Projects of this size don’t happen overnight.”

However in a different context Kennedy noted that once a formal presentation of the changes begins that the changes would be subjected to an explanation of how each one complies with MGM’s obligations under the host community agreement.

The Massachusetts Gaming Commission was due to consider MGM’s changes at its October 29 meeting. Council President Fenton has said he plans to ask the panel to meet with the council and residents to discuss questions and concerns.

Southeastern Casino Zone

The public in Taunton will be able to review $8 million in planned improvements to traffic and infrastructure that will result from the Mashpee Wampanoag Tribe’s $500 million Project First Light casino resort at a forum planned for November 16 at a local school.

Previously the tribe announced about $30 million in highway and road improvements that will begin in 2016. The tribe has also committed to providing $15 million in special revenue bonds that could be used to fund any capital improvements the city chooses. The tribe plans to open the casino in 2018. Studies have projected that the casino will add more than 20,000 trips per day.

The casino resort is planned for 150,000 square feet, three hotels with 900 rooms, several retail outlets, restaurants, and a water park and events center. It would employ about 2,500 people.

The improvements were agreed to in the 2012 host community agreement that the tribe signed with the city in 2012. Under the tribal state gaming compact the tribe will pay 17 percent of revenues—unless the Massachusetts Gaming Commission decides to allow a commercial casino in Region C, in which case the tribe would pay nothing.

The commission is currently entertaining one commercial proposal for the southeastern zone: the Brockton Fairgrounds.

Recently the federal government put 151 acres in Taunton into trust for the tribe. Additionally, the Mashpees plan to buy another 114 acres from private parties that would not be part of the reservation, but would be used for ancillary parts of the resort that would not be related directly to gaming.