The city of Boston last joined two other Massachusetts cities this week in suing the Gaming Commission over its decision in September to award the license for a Boston metro license to Wynn Resorts. Somerville and Revere previously filed lawsuits.
Walsh’s 74-page lawsuit demands the right for the residents of the Charlestown neighborhood to vote on the project and asks a judge to order such an election. It alleges that the commission exceeded its authority in awarding the license and that it violated the state’s open meeting law.
Walsh continues to insist that the city should have been designated a “host community.” He said last week, “With Boston providing the sole access point to the casino site, the vast majority of patrons would be required to drive through Rutherford Avenue and Sullivan Square in Charlestown—an area that already faces severe traffic congestion.”
The lawsuit argues that the commission was required by law to insist that Wynn mitigate traffic impacts, which ought to have re-routed traffic away from this part of Charlestown. “Instead, the commission imposed conditions that will do nothing to prevent the exacerbation of existing congestion by introducing thousands of additional vehicles to the area.”
The commission maintains that it addressed and rejected Walsh’s contentions during its deliberations last year. In May it denied to city’s petition to be designated as a “host city,” a designation that Walsh at the time claimed his city could grasp with or without the commission’s approval. The lawsuit claims that the commission’s vote on the claim was a “mock hearing,” that violated the law.
According to the lawsuit, the commission “manipulated the outcome of the hearing by withholding documents from the City that had direct bearing on Boston’s host community status, advocating on behalf of Wynn, and deliberating and predetermining the outcome outside the public hearing context, in violation of the Open Meeting Law and the Gaming Act.”
According to commission spokesman Elaine Driscoll, “The commission continues to believe that our resolution was appropriate but also fully understand that parties who are disappointed in our decisions may want to test that belief through litigation.”
Walsh supported the proposal for Revere by the Mohegan Sun that would have paid the city $18 million a year, an amount much less than what Wynn proposed to pay. In announcing the lawsuit the mayor said the city has been attempting to reach a “fair agreement” with Wynn without success.
Some see the lawsuit as a high stakes negotiating tactic to get Wynn to offer the city more money than it has so far been willing to do. It has just enough legal irregularities to create some uncertainty about the outcome, they say. Richard McGowan of Boston College, a local gaming expert, told the Boston Herald, “They (the commission) seemingly overlooked who was selling the land in Everett. It could all be aboveboard, but who knows.”
According to the attorney representing the city, Thomas C. Frongillo, “Under the gaming statute, all people with a financial interest in the gaming establishment have to be deemed suitable. They are not. We raised this issue back in May. And the Gaming Commission pretty much tried to sweep it under the rug.”
Despite the lawsuits, Wynn is marching ahead with its $1.6 billion casino resort across the river from Boston. Last week it finalized its purchase of 33-acres formerly occupied by a Monsanto chemical plant along the Mystic River, paying $35 million for the property.
Wynn nor Everett officials mentioned the lawsuit when they celebrated the finalization of the purchase last week.
In an event hosted by Everett Mayor Carlo DeMaria, Wynn Massachusetts CEO Robert DeSalvio declared, “With this land transaction and our arrival into the city of Everett, nothing, nothing gets in our way in terms of bringing this project to fruition.” He declined to answer reporters’ questions on where discussions are between Wynn and the mayor are on the issue of traffic upgrades.
DeMaria called the lawsuits by Somerville Mayor Joseph Curatone and Revere Mayor Dan Rizzo “sour grapes” and added, “I’d like to sit down with them all, resolve their issues. They have the right to litigate it. I thought it was all done once. It was already done through the Gaming Commission.”
The project’s traffic plans, including upgrades to decrease gridlock in Boston have yet to be approved by the Massachusetts Environmental Policy Act. The approval has slipped several months since Wynn predicted it would be completed by September of last year.
The property has been the subject of much controversy once it was discovered that one of its former owners, a convicted felon, had mob connections and allegations were made that he was still associated with the land in some way and might get a material benefit from its sale.
Because of this possibility the final sale price for the land was lowered from $75 million to $35 million, the price the sellers had originally paid for it. The former owners of the property were indicted in October of 2014 with federal prosecutors alleging that they tried to hide the involvement of Charles Lightbody, a felon and known mob figure.
Lightbody remains active in business in the area. Despite being under indictment, Lightbody participated in a bid for King Arthur’s Lounge, a former strip club in Chelsea. Demetrios Vardakostas, who paid $1.35 million, outbid him on the property. The property is near the Mystic River, and the Wynn casino property. Vardakostas says he plans to put a hotel on the property.
No one has alleged that Wynn knew anything about the cover-up, however the lawsuits allege that the Massachusetts Gaming Commission should not have awarded the Boston Metro license because of the allegations.
Wynn responded to the Boston lawsuit by releasing information that the city of Boston refused to take a $1 million check that was intended to help mitigate the impact of the casino resort.
When the $1 million was declined, the money was delivered to the commission, which has put the money in an escrow account for the city. The amount is the first of $56 million that the commission ordered be paid to Boston after Walsh refused to participate in negotiations with Wynn.
Wynn is also required to spend $31 million to help alleviate traffic at Sullivan Square, a bottleneck in Charlestown that the city alleges will be made even worse by the Wynn development.
Walsh’s administration fired back, “The payment Wynn is referencing is a condition of Wynn’s agreement with the Gaming Commission, not with the city. If Wynn were to make a payment related the agreement, it would be made to the Gaming Commission, not to the city of Boston.”
In a related development, the property that the commission passed over to award the Everett license, Suffolk Downs, began moving towards redeveloping the property and is working with both the city of East Boston and Revere.
One of the last acts of outgoing Governor Deval Patrick was to sign a bill passed by the legislature that allows remote horserace betting to continue at Suffolk Downs until March 31, although live racing has stopped. This saves the jobs of some 100 of the track’s employees. It was a compromise over what the Senate had wanted, which was to extend simulcast wagering for another 17 months.
Raynham Park, formerly a greyhound racing park, has been allowed to continue to offer simulcast wagering from other racetracks since 2008, as has Plainridge Racecourse, which also offers live harness racing. In addition, Plainridge is currently being transformed into the Bay State’s first and only slots parlor, which is dubbed Plainridge Park Casino and will have 1,250 slots.
This gives a few months’ time to horsemen who are working with the gaming commission to bring horseracing back to the venerable racetrack. They have asked Suffolk Downs to endorse their proposal to lease the property to keep live racing going at the facility during this year and next. According to Suffolk Downs CEO Chip Tuttle no financially viable plan has been proposed yet.
Anthony Spadea, president of the New England Horsemen’s Benevolent and Protective Association praised the legislature’s action: “The extension of the track’s simulcasting rights, although without live racing, will preserve jobs at Suffolk Downs and maintain the 50-50 simulcasting revenue split between the horsemen and the track.” He noted that the state has 62 thoroughbred breeding farms and that horseracing employs or impacts 1,500 people.
MGM Springfield
MGM Springfield’s environmental impact study last week was given the approval of the Secretary of Energy & Environmental Affairs, meaning that it meets the requirements of the state’s Environmental Policy Act. This clears the way for a groundbreaking early this year with the opening projected for 2017.
MGM continues to make land acquisitions within the city’s downtown area known as the South End to make way for its $800 million casino resort. That includes purchase of an office and retail building and a city landmark, Tony’s Famous Barber Shop. MGM made a total of 18 land buys since its first purchase of the old St. Joseph’s rectory in September 2012. Other purchases have included a former Cadillac dealership, the Springfield Rescue Mission (which is being relocated). Purchase of the Century Investment Company’s 73 State Street building is still being finalized.
Now that land acquisitions are complete MGM Springfield should begin demolition soon on the 14.5-acre site, which is divided into a “Casino Block” and a “Retail Block.”
The Casino Block will include a 177,351 square foot hotel, 126,701 square feet of gaming, retail, food and beverage, a 45,859 square foot convention area and 64,800 square feet of residential development.
The Retail Block will has the goal to “invigorate the surrounding streetscape and create a vibrant urban environment for the city and its residents,” according to the study. It will include 42,854 square feet of retail, a bowling allege, eateries, a cinema and office space.
In a move designed to remove the suggestion of corruption in the dealings between $800 million MGM Springfield and the city, the city council president, Michael Fenton, last week proposed that city elected officials, such as council members and the mayor, be prevented from working for MGM or its affiliated companies for at least five years after they leave office.
The measure would impose a two-year ban on city officials who have “major” policymaking authority from working for MGM. It will be voted on at the January 12 city council meeting.
Fenton, quoted by the Associated Press, said, “I want to take any appearance of unfair play off the table by codifying stringent rules. The casino project comes with unprecedented risks, and we owe it to the public to be as transparent and forthcoming as possible.”
This is the first time such a ban has been adopted in the Bay State, Fenton said.
Southeastern Gaming Zone
The façade of unity in the Mashpee Wampanoag Tribe, which hopes to build a casino in Taunton, in the Southeastern gaming zone, showed signs of cracks last week when an anonymous group of tribal members sent an automated message to tribal members to attend a meeting.
The purpose of the meeting is to discuss tribal finances. Some members are concerned about $474 million in borrowing from the Genting Group the tribe has done during its efforts to qualify to put land into trust in Taunton. They worry that the tribe will be on the hook for the money if the casino is never built.
Tribal Chairman Cedric Cromwell has declined to discuss the finances of the Project First Light, claiming there are proprietary. He asserts that the tribe will not owe Genting any money if a casino is not built.
Nevertheless, some tribal members urge that there be more oversight on the uses of the money. A tribal election for six council seats will be held on February 8.
ATMs at Casinos
The legislature let die a controversial bill that would have allowed more widespread placement of ATMs at the Bay State’s casinos after an 11th hour appeal by the state’s new attorney general.
This leaves intact an existing ban on ATMs at casinos dating back to the 1980s.
The provision was taken out of a banking law reform bill after it sparked considerable debate and accusations that it would encourage irresponsible gaming.
Although they backed down, Senate leaders who had supported the language said nothing prevents federally chartered banks from reaching agreements with the state’s four planned casinos for ATMs. Only state-chartered banks would be affected by the ban.
Senate Minority Leader Bruce Tarr commented, “I think we will have to come back to it. The current inequities for different banks is untenable.”
The jettisoned language had replaced earlier language that had gotten rid of all restrictions on the location of ATMs at casinos with language that restricted them to parts of the gaming property not part of the casino floor.
The lawmakers were influenced by a warning that was issued by Attorney-General elect Maura Healey, who said in a statement, “Efforts to lift the ban on casino floor ATMs should to be carefully considered and openly debated, not rushed through in the waning days of the legislative session. The impact on consumers needs to be considered up front, not punted until after the restrictions are lifted. I urge the legislature and Gaming Commission to tread carefully and promise a full, public hearing in the next session.”
The law that authorized casinos in the Bay State may or may not ban all ATMs. The Gaming Commission has asked the Division of Banks to clarify whether it does. The law states, “No electronic branch (ATM) shall be located upon premises where there occurs legalized gambling, other than a state lottery.”
The gaming expansion law of 2011 may supersede that language however due to provisions that prohibit certain transactions without specifying ATMs. Because of that fact the commission has operated so far under the assumption that ATMs are legal as long as they are located 15 feet or more from the casino floor.
Indian Casino’s Fate
A federal judge this winter could decide the fate of the small Class II casino the Wampanoag Tribe of Gay Head (Aquinnah) wants to open on Martha’s Vineyard.
Federal District Judge Dennis Saylor IV is holding a hearing this month on the tribe’s motion to dismiss the lawsuit filed by Massachusetts, which claims that the tribe does not have a right to operate a casino on the island because it agreed not to in the 1980s.
According to the administration of Deval Patrick the tribe waived its gaming rights after it agreed to a land deal passed by Congress in 1987. Patrick sued the tribe a year ago.
The tribe believes that the Indian Gaming Regulatory Act of 1988 superseded the 1987 law and that it can legally operate a Class II bingo style casino without a compact with the state. It cites an opinion by the National Indian Gaming Commission that the lands can be used for Indian gaming, despite the agreement the tribe signed.
