The Massachusetts Secretary of Energy and Environmental Affairs Matt Beaton last week hit the brakes suddenly on the Wynn Everett casino project when he ruled that the project “does not adequately and properly comply” with the state’s environmental laws. He declined to issue a permit that the .7 billion casino project needs to proceed to build along the Mystic River in Everett.
Wynn’s project includes a 629-room tower hotel on 34 acres.
The Massachusetts Environmental Policy Act (MEPA) requires that the 33-acre project’s traffic and transportation impacts would need to be addressed under a separate review, said the secretary. In a key decision, Beaton ruled that the land transfer of 1.75 acres in March between the Massachusetts Bay Transportation Authority and Wynn for $6 million before that environmental review was complete was also a violation.
He suggested putting the land into escrow until the final review is complete or reversing the land transfer all together.
Wynn had hoped to be able to begin soil preparation on the highly polluted site this summer. The land provides a vital access link to the site, important because it is outside of the jurisdiction of the city of Boston, which has opposed the project from the beginning, is suing to try to stop it, and is expected to do anything it can to delay it.
The city of Revere, which was the site of a rival casino proposal by Suffolk Downs and the Mohegan Sun, has called on an investigation of the MBTA land purchase.
Revere Mayor Daniel Rizzo hailed Beaton’s ruling: “It’s a refreshing change from what until now, has appeared to be an assault by the commonwealth and its agencies on the cities of Revere, Boston and Somerville,” Rizzo said in a statement. “I and others have been asking questions about the Illegal land transfer since last year. Despite our pointing out to the T on multiple occasions the severe problems with the deal including the lack of public review, violations of the T’s own procurement requirements, and the lack of compliance with MEPA, the T and Wynn went ahead with the sale anyway.” Rizzo called the sale, “part of a blatant pattern of behavior that has plagued Wynn’s project from the start.”
He added, “The law is the law, and what’s right is right, and I think this sale needs to be reversed. It’s about time where somebody looks at this process where Wynn has run roughshod over everybody. It’s outrageous.”
Wynn Everett President Robert DeSalvio responded to Beaton’s ruling by promising to “expeditiously respond to Secretary Beaton’s comments.” He noted that on the great majority of conditions that the secretary had found the project suitable. He added, “We’re pleased that after thousands of pages of analysis and years of review, the Secretary has generally endorsed all of our mitigation plans.”
In addition to requiring another environmental review, Beaton is requiring that the Department of Transportation integrate the plans for upgrading state roads that will serve the casino with plans of the city of Boston for upgrading Sullivan Square in Charlestown, which is expected to be impacted severely by casino traffic.
That impact is one of the reasons Boston has cited in its legal challenge to the Wynn license. In a letter regarding the impact Sullivan Square, Boston officials wrote that the city intended to “exercise its sovereign rights to prevent its streets from being used in a manner that is incompatible with … the safety of its residents.”
Beaton referred to Boston’s concerns in his requirement that the Wynn project’s roadwork must integrate with work Boston is doing.
Beaton stated that he does not believe that his requirements will kill the project, although it will very likely delay construction. However, in his letter the secretary indicated that he thought the previous administration had improperly rushed the approval process. “It is regrettable that this conveyance occurred without due public process or any inclusion of provisions to ensure consistency with the MEPA regulations’ requirements,” Beaton wrote.
Because of this improper procedure, Beaton noted that Transportation Secretary Stephanie Pollack has adopted new procedures to make sure that a similar land transfer subject to MEPA approval doesn’t happen in the future.
State’s Final Casino
The city of Brockton, Massachusetts last week gave a first look at the casino resort that Rush Street Gaming proposes to build at the Brockton Fairgrounds, in the Bay State’s Southeastern gaming zone.
Mayor Bill Carpenter of Brockton, Massachusetts last week unveiled the first public viewing of the artist’s drawings of the $650 million casino resort that Rush Street Gaming wants to build on the Brockton Fairgrounds.
The city is one of three bidders for the state’s southeastern zone (aka Region C) license. The others are New Bedford and Somerset.
The plans, drawn by Klai Juba Wald Architects include a seven-story hotel, an events center, eateries and 3,000 parking spaces. The concept, which some compared to a school campus and others to a shopping mall, includes New England style gabled roofs and brick veneers. It will, opponents note, be across the street from a high school.
The combined hotel and casino could create as many as 1,500 jobs, with local residents given a hiring preference, according to city officials.
The agreement with the city also calls for the casino to pay Brockton $10 million annually. This could backfill the city’s budget, which has been cut in recent years.
City voters will decide whether the proposal can go forward at the host community election scheduled for May 12.
Church leaders in the city are leading the opposition. They are focusing on the casino’s location near a high school and to recovery high school for teen drug addicts.
KG Urban Enterprises, which hopes to build along the waterfront in New Bedford on 27 acres, hopes to schedule a host community election in May or June. But first it must secure an equity partner to help fund the project before the May 4 deadline for submitting a full project proposal.
In the host community agreement New Bedford would be paid $12.5 million annually, which could increase after five years of operation. New Bedford residents will be hired whenever possible and local contractors must be used for 20 percent of construction.
The town of Somerset and Crossroads Massachusetts are continuing to work on the details of their host community agreement. Crossroads seeks to build on 100 acres near Interstate 195.
Meantime the Mashpee Wampanoag tribe insists that it is still in the game for the southeastern license and that its application to the Bureau of Indian Affairs to put land into trust in Taunton is still very much alive and could be acted upon soon.
This, despite the decision last week by the Massachusetts Gaming Commission not to delay acting on commercial casino applications because of the uncertain nature of the tribe’s application. According to a spokesman for the commission, the panel relied on the most recent data from the BIA about the tribe’s prospects before reaching its decision.
The commission hired the consulting firm of Michael & Carroll to evaluate the chances that the Mashpees might eventually put land into trust. Guy Michael of the firm updated the commission on problems that continue to face the tribe’s application. The largest of these being the 2009 U.S. Supreme Court Carcieri v. Salazar decision in which the court ruled that tribes recognized by the federal government after 1934 can’t put land into trust. The Mashpees were recognized in 2007, but assert that they have actually had a relationship with the federal government and before that the British crown, going back before the American Revolution.
Michael told the commission, “Waiting for that resolution would probably be to the detriment of all parties involved.”
Commission Chairman Stephen Crosby said he spoke to Kevin Washburn, head of the Bureau of Indian Affairs, who told him that the Mashpee application remains a high priority, but couldn’t say when a decision would be issued.
The most recent action by the BIA was to issue the final environmental impact statement for the project in September of 2014.
The tribe proposes to put a $500 million casino resort on the land that it purchased several years ago in the city.
Mashpee attorney Arlinda Locklear, who is in charge of the tribe’s application effort, told the Enterprise “We’re on track to succeed and succeed sooner rather than later,” adding, “It is under active review and we feel good about prospects in the near future.”
The tribe was not asked to give input at the meeting where the commission decided to move forward with the licensing process.
Neil Bluhm, principal of Rush Street Gaming, whose subsidiary Mass. Gaming & Entertainment wants to build in Brockton, last week wrote to the commission that his company is committed to competing in the Bay State marketplace whether or not the tribal casino is built.
“Based on our analysis and real world experience, if we are selected, we are committed to investing a significant amount of our own capital because we believe that we will be able to operate a successful project even with tribal gaming in Taunton,” he wrote. Bluhm noted that under the tribal-state gaming compact with the Mashpees that the tribe pays no money to the state if there is competition in Region C. “…Our projections show that the commonwealth still receives more tax revenue under the Taunton-plus-Brockton scenario than under the Taunton-only scenario,” he wrote.
MGM Springfield
The Springfield Historical Commission last week voted final approval to the various mitigations that MGM Springfield will make to historic buildings that it is removing or altering in the process of building its $800 million casino resort.
The vote was non unanimous, however, with one commissioner voicing his disappointment with MGM. Commissioner Robert McCarroll commented, “I just can’t sign off on the demolition of a historical building for the cul-de-sac issues.”
The commission and MGM had many discussions over the months about the façade of the old YWCA building, how to preserve large sections of the old State Armory, and how to replicate old ornamental porticoes elsewhere in the casino. The cul-de-sac the commissioner referred to was the reason that MGM gave for having to completely tear down one building. The cul-de-sac, said MGM, is required by law to accommodate emergency vehicles.
MGM recently held a groundbreaking ceremony at the old Zanetti School. It hopes to begin work soon on the 14.5-acre project in Springfield’s South End.
MGM is not finished with history just yet. Now it must appear before the Massachusetts Historic Commission. The Gaming Commission, however, has the final say in all such issues.
AG Wants More Regulations
Meanwhile Bay State Attorney General Maura Healey, a frequent critic of gaming, last week called on the state Gaming Commission to create new regulations designed to fight money laundering and other criminal activities.
In a letter written last month the AG suggested that the commission require period reports from casinos about large cash transactions and suspicious activities.
“Such regulations should deter would-be money launderers, and identify those engaged in other criminal enterprises, such as drug traffickers, human traffickers, loan sharks and organized crime,” Healey wrote.
Commission Chairman Stephen Crosby said that the panel would discuss the attorney general’s letter and added, “Obviously, everyone is opposed to money laundering and human trafficking. The question is, What’s the most effective way to make sure that these things are minimized? … We don’t want to blow it out of proportion, but you do want to think aggressively and creatively about how you make sure these things don’t become problematic in our state.”
The American Gaming Association also did not consider Healey’s comments helpful. It issued a response that said, in part, “The American Gaming Association recently met with AG Healey’s office and, among other key information, provided the AGA’s Best Practices for Anti-Money Laundering Compliance, a comprehensive document that guides the industry’s compliance efforts. These Best Practices were developed in coordination with the federal government. While we were hopeful that we were making progress in building a constructive relationship, today’s public comments confirm a deep and disappointing bias against the casino gaming industry.”
Winnings Threshold Raised
Following the recommendations of the Gaming Commission the legislature recently approved of a law that raises the winnings amount required to stop playing and fill out an IRS form from $600 to $1,200. This brings state law in line with federal law. Governor Charlie Baker signed the bill into law.
The bill, said a lawmaker, “put us on an even playing field with other states.” Casino operators had said that many players would stay away if required to fill out a form every time they passed the $600 limit. Most other states have a $1,200 limit.
A spokesman for MGM Springfield, Carole Brennan, commented, “This will allow Massachusetts gaming operators to compete in a growing market and fully capture the economic benefits of the industry for the Commonwealth.”
Ironically, the Obama administration is proposing lowering the IRS threshold to $600, an opinion vigorously opposed by the U.S. gaming industry.
