Citing “skyrocketing costs,” MGM has submitted a major change to the plans for its MGM Springfield that includes the elimination of the 25-story hotel tower from the casino resort.
There would still be a 250-room hotel, but located in a six-floor building that had originally been planned to house apartments.
Members of the gaming commission expressed obvious frustration over the major revisions. Commissioner Enrique Zuniga said he feared the revisions might harm the casino’s appeal and hurt the bottom line. “I’m a little troubled by this request,” he said. “A significant feature of this project—what you sold this commission, this city and this community—is now no longer there, and I’m worried about it.”
Commission Chairman Crosby declared, “This is a very big issue which caught us by surprise. Somewhere along the line something happened that we didn’t know about until very late in the game.”
MGM Springfield President Michael Mathis defended the proposed changes, saying, “The Springfield skyline is littered with high-rises. High-rises aren’t what’s going to make this work. It’s going to be our MGM brand, our player database.” He added, “These proposed changes leave our original design largely untouched.”
Springfield Mayor Domenic Sarno supports the changes. In a letter of support he said that the proposed “increased walkability” and fit in better with the city’s historic downtown.
The commission has already experienced disappointment by the project when it agreed to allow the developer to delay opening the casino until September 2018, a year after the original opening date.
Taunton Taunts
Suddenly the Mashpee Wampanoag tribe has gone from sitting at the children’s table of gaming to having a dominant position in the southeastern part of Massachusetts. The decision by the Bureau of Indian Affairs to put the tribe’s land in Taunton and the town of Mashpee on Cape Cod into trust has struck the gaming landscape in the Bay State like a thunderbolt.
The action could spell a “death knell” for a proposed commercial casino in Brockton, according to gaming experts familiar with the region.
A total of more than 300 acres are affected (170 acres the town of Mashpee; 151 acres in Taunton.) The tribe was first recognized in 2007 and has been attempting to put land into trust since that time. The tribe is recognized historically as being the tribe that met the Pilgrims when they landed in America in 1620.
Tribal Chairman Cedric Cromwell received a phone call and a letter from BIA director Kevin Washburn informing him of the decision. “We have sovereign land! We have sovereign land! We did it! We have our own universe!” Cromwell told a crowd of Mashpee citizens gathered at the tribal buildings.
Last week he held a press conference to announce that the tribe, based on Cape Cod, but until last week landless, will begin construction of the Project First Light Casino early next year. “We hope to start working on our project by next construction season,” he said, adding, “We’re going to make it happen.”
A tribal spokesman later clarified that Cromwell meant that the tribe would begin site work next spring.
Cromwell issued a statement that said, in part: “We have occupied this land for the past 12,000 years. But, over the past four centuries, much of our ancestral home was taken away from us. Our land-into-trust application did not seek to reclaim the entirety of our ancient homeland, which included the eastern part of Massachusetts from Gloucester Bay all the way to Narragansett.”
That National Indian Gaming Commission must also approve of the financial agreement between the tribe and the Genting Group, the tribe’s partner in the casino.
Project First Light will include a 150,000 square foot casino with 3,000 slot machines, 150 gaming tables and 40 poker tables.
Besides a casino, the tribe also plans to build two hotels and a water park.
Opponents of the land into trust decision have long promised that they would sue to prevent the action, and would seek a preliminary injunction. However, tribal attorney Arlinda Locklear noted that no one opposing putting land into trust has ever been able to obtain such an injunction.
“That’s been tried in past and it’s never succeeded,” she told the Cape Cod Times. In any such lawsuit the federal government would be the defendant. “The risk is low. We feel confident. It’s a well-reasoned record of decision. We feel confident about winning.”
The action by the federal government puts pressure on the Massachusetts Gaming Commission to decide whether it will issue a commercial license for the southeastern gaming zone (Region C) and rob the state of the 17 percent share of revenue that the tribal state gaming compact requires the Mashpees to pay if they have a monopoly on gaming in the region. If a commercial casino is built, that percentage decreases to zero. However, a commercial casino must pay 25 percent of its revenues to the state.
Cromwell called on the commission to “honor, respect and work with” the tribe. The tribe claims that the casino will generate $2.1 billion in economic activity, create 1,000 construction jobs and spend $230 million in construction, while ultimately creating 2,650 permanent casino jobs. Any casino the tribe builds will be regulated by the NIGC rather than the gaming commission.
When the gaming expansion act of 2011 was passed the legislature intended that the tribe should have a license set aside for it—as long as it met several criteria, among them being able to put land into trust. Now that that has happened, the tribe has met all the conditions. However, because of the delays in the fee to trust process, the commission decided to open the region to commercial bids.
Elaine Driscoll, spokesman for the commission, said that the commission would take the federal action into account as it decides whether to issue a license for Region C.
The commission issued this statement: “The decision by the US Department of Interior to approve land into trust is a milestone for the Mashpee Wampanoag Tribe. This determination provides further important information for the decisions the Commission must make in the weeks ahead. The Commission looks forward to continuing the discussion about the path forward.”
There is currently only one commercial bidder for Region C, Mass Gaming & Entertainment, a subsidiary of Rush Street Gaming. George Carney, owner of the Brockton Fairgrounds property where Mass Gaming proposes to build a $650 million casino resort, admitted last week that having competition in Taunton would take some money away, but that they could still be profitable. “With the competition we wouldn’t do as much, but the numbers still justify going forward with it,” he told the Cape Code Times. “We’ve been pushing for license from Day 1 knowing the Indians are out there.”
Rush Street gaming is maintaining its position that the Mashpees will be tied up in litigation for years.
The company issued a statement last week, “While it is likely that the Department of Interior’s decision will be challenged and litigated for years, our proposal will bring needed revenues, jobs and economic development to Brockton and the Commonwealth. We believe the gaming commission should continue with the Region C licensing process.”
At its meeting last week the commission declined to say specifically whether or not it will award a license for Region C in light of the most recent events.
Mass Gaming must submit its final casino proposal by September 30 to the commission, which will make a final decision next year.
“It’s the death knell to the one in Brockton, period,” Richard McGowan, an associate professor at Boston College told the Patriot Ledger.
“If you assume the tribe goes forward with its plans, it doesn’t make sense to issue a commercial license in Region C,” said Clyde Barrow, a casino expert long familiar with the New England market, told the Ledger.
He added, “There’s an inherent natural advantage for a tribal casino versus a commercial casino. That’s tens of millions of dollars per year, they can give to their customers in free slot play, free rooms, free food and free tickets for entertainment. They can make their facility more lavish and attractive. There’s a whole range of benefits.”
Spectrum Gaming, a consultant for the gaming commission, has previously warned that a tribal casino competing against a commercial casino would have “potentially disastrous” effects on state gaming revenue.
“When tribal casinos do not fall under the same regulatory and tax guidelines as commercial casinos, they often have a distinct competitive advantage,” Spectrum wrote.
In preliminary plans already released Mass Gaming plans a 225-room hotel, a 240,000 square foot casino, dining and entertainment center. The developer has committed to paying $3 million in upfront payments to the city and at least $10 million annually or $6.75 million if the Taunton casino is built.
The developer projects that 1,400 construction jobs and 1,500 permanent jobs will result from the casino project.
The Taunton casino would be half an hour from Plainridge Park, the state’s only slots parlor, an hour from the Wynn Everett, two hours from the MGM Springfield, less than an hour from the Twin River Casino and 90 minutes from Connecticut’s two Indian casinos.
Business leaders and political leaders in Taunton reacted positively to the announcement that the casino would be going forward. Taunton’s nickname is “The Silver City,” but residents were reacting more like its name will be changed to “The Gold City.”
Mayor Thomas Hoye declared this week, “Taunton, like many other mid-sized American cities, has suffered from our country’s declining manufacturing economy,” The jobs will benefit those who are “unemployed and underemployed,” said the mayor. The Mashpees have also promised to pay the city $30 million to be used for infrastructure improvements.
David DesRochers, spokesman for Silver City Galleria, which is located about a mile from the casino site, told the Taunton Gazette: “We are excited to welcome the Wampanoag Tribe Casino to Taunton and believe that there will be great synergy between the casino and the mall. He added, “Gaming and shopping are both leisure activities and they mix well.”
Kerrie Babin, president of the Taunton Area Chamber of Commerce, said, “Typically, when you look at your casino, most of their shops are higher-end,” adding, “If you are having a destination resort and attract families, a lot of them aren’t going to shop there. So, they are going to need a place to shop.”
Babin said the Chamber is not for or against gaming, but is for the creation of jobs. “Taunton and the SouthCoast region need job creation. That’s where our focus is,” he said.
Dan DaRosa, owner of B&D Construction, commented, “For me, it’s great news, to know that we spent all that money to relocate. And it’ll pay off. … I didn’t look at it as a gamble. We were always searching for a higher profile area to be in. It’s a good deal for them and me.” He added, “I just think the biggest news is that it’ll be great for Taunton. It’s an economic stimulus that will be great for our area. I’m so excited for Taunton.”
The city has waited four years—since it struck a deal with the tribe—to hear the news.
Wynn Everett
Superior Court Judge Janet Sanders, the judge in the case of several lawsuit against the Massachusetts Gaming Commission filed by several cities, including Boston, challenging the decision that awarded a casino license to the Wynn Everett proposal last week heard arguments as the state sought to have the case thrown out. The verbal arguments lasted for two and a half hours.
Boston, Revere, Somerville, and the Mohegan Sun all claim that the commission’s decision awarding the license to the $1.7 billion project was corrupt and flawed. The commission seeks to have the cases thrown out on the basis that the statute that gave the commission authority to award the licenses isn’t subject to court review—something applicants were aware of when they applied.
An attorney for the Mohegans said they are not challenging the result, but the actual process. According to Kenneth Leonetti, “We had the right to expect a fair process. The whole process violated the statute.”
The state contends that Boston lacks “legal standing” in the case because the casino will be built in Everett, which isn’t part of the city. The city argues that the casino impacts it because the main road leading to casino runs through Boston. “It’s the only way in and the only way out,” Boston’s attorney argued. “You don’t have a gaming establishment without a way in.”
In a separate development, the group that led last year’s unsuccessful attempt to repeal the state’s gaming expansion act plans to hold an anti-gambling protest on September 27 at the site of the Plainridge Park Casino.
The group calls the protest “Freedom Play.” It is part of the observance of the National Day of Action Against Predatory Gambling.
