Longmeadow, Northampton and Hampden have all petitioned the Massachusetts Gaming Commission for surrounding community designation after their respective talks with MGM fell short of securing a deal.
BOSTON — As MGM Resorts International moves into the final stages of licensing for its proposed $800 million casino in downtown Springfield, three towns and cities in the region made their pitch Tuesday for surrounding community status to receive money to mitigate potential affects from such a project.
A decision on who gets the designation isn't expected for a few weeks, but each petitioning community on Tuesday made lengthy pitches.
Officials representing Northampton, a city approximately 20 miles north of Springfield, reiterated their fears that a rejuvenated downtown Springfield with the MGM project at its core would negatively impact its thriving economy of independently owned businesses.
"Unfortunately the clear, albeit unintended consequence of Springfield's gain will be Northampton's loss. For years, Northampton has been the sole destination in the Pioneer Valley," said Jeffrey Fialky, an attorney representing Northampton. "Whether by design or by effect, the (Springfield development) will compete with Northampton. Its substantial patronage will indeed be cannibalized."
Conversely, MGM has argued that its Springfield project would benefit Northampton, as out-of-town travelers would likely pass through to check out a city with a reputation of being one of the last with such a thriving downtown full of restaurants and entertainment options. Fialky said that in Northampton's view, the argument is one of convenience as MGM has denied the city's requests to be designated a surrounding community.
Mayor David Narkewicz is seen in downtown Northampton earlier this year. Northampton is seeking "surrounding community" status to offset what it claims will be a negative impact from the MGM casino in Springfield.John Suchocki / The Republican file
Northampton Mayor David Narkewicz said that if there are expected benefits to be had, then there are detriments also associated with the project.
"We believe as an established regional destination, that we will be impacted by this $800 million entertainment facility," he said.
Camoin Associates, the firm hired by Northampton to analyze the potential impact of MGM's Springfield project on the Hampshire County city, said that of the 500,000 annual visitors to the city, a majority are from within a 25-mile driving radius. They expect the casino to cut into the region's discretionary income, resulting in a decrease in business for the city.
When asked by the commission if the expected influx of new tourists to the area would indeed benefit Northampton's businesses, the firm's vice president, R. Michael N'dolo, said gains would not be enough to offset losses, which he expects would result in job losses, businesses closing and a significant drop in hospitality taxes collected.
MGM argued that in its view, Northampton is seeking to have the commission enact "a form of economic protectionism."
11.06.2013 | SPRINGFIELD -- Michael Mathis, vice president of global gaming development for MGM's hospitality division, was named the president of the MGM Springfield project on Jan. 23, 2014 taking over local operations should the company be awarded the sole Western Massachusetts casino license. (Republican Photo by Mark M. Murray)
Michael Mathis, the incoming president of the MGM Springfield project, said the company has issues with the Camoin report and simply doesn't believe Northampton's assertion that the negative effects would be to the level they are warning of. Additionally, he touted the economic benefits expected to come from the new jobs the casino will create, and how that money would still flow to Northampton, based on its unique offerings, as it does today.
As the town of Hampden was cued up to make its presentation, Gaming Commission member Bruce Stebbins, a former Springfield city councilor, recused himself, citing previous dealings with both Hampden and Longmeadow.
Hampden Board of Selectman Chairman John Flynn said that as the MGM project expects a third of its business to come from Connecticut, he is concerned that a bulk of that would come through the town, which borders Connecticut, into East Longmeadow and on to Springfield.
MGM officials said that most of the Connecticut traffic would come by Interstate 91 right to the casino project, with a small portion coming from the Monson and Stafford, Conn., areas, considering the limited population of those towns.
An artist's rendering released by MGM Resorts International depicting the $800 million resort casino complex they are aiming to build in the South End of Springfield.
Longmeadow officials' request to receive $1 million up front from MGM to be followed by annual payments of $500,000, with a 2.5 percent annual increase, was wholly rejected by the entertainment company.
Mathis, in a letter previously sent to the Longmeadow Select Board, pointed out that their request was significantly higher than what all other communities had asked for, and he declined to sign a deal.
At the meeting on Tuesday, Longmeadow officials argued that already congested traffic in the wealthy suburb would only get worse with a casino in the city next door.
Brandon Moss, special counsel to the town, said 30 percent of anticipated MGM revenues coming from Connecticut residents would arrive via Interstate 91 and potentially Route 5, entitling that community to money to deal with potential problems along the stretch those highways.
Moss said that Longmeadow (Route 5) and Converse streets, central thoroughfares in the town that frequently back up significantly during peak travel hours, also are reason for concern.
"If there's even a modestly higher demand than forecast, that's going to cause some problems," Moss said, explaining that the town is concerned that without mitigation funds, it won't be able to pay for improvements to infrastructure. "What Longmeadow is seeking here is reasonable."
MGM didn't necessarily argue with Longmeadow's desire to be a surrounding community, but rather took issue with just what exactly its officials had asked for.
Seth Stratton, a Longmeadow-based attorney representing MGM, said that he is a town resident and appreciates the efforts the town is making.
"The town does have traffic issues and they are preexisting. What they are seeking is to have MGM solve its traffic issues," he said. "Traffic will go through Longmeadow, but the percentage is not significant."
MGM officials said since a majority of Connecticut patrons would arrive by I-91, which the Massachusetts Department of Transportation, not the town of Longmeadow, maintains, the mitigation funds the community should get are much less than what they are asking for.
In conclusion, MGM said that it has studied traffic in Longmeadow and it doesn't anticipate any perceivable impact.
Gaming Commission Chairman Steve Crosby said that if municipalities aren't granted surrounding community status, they can still wait to apply for a portion of money to be made available as part of a community mitigation fund which is to be established by the legislation.
That fund, he explained, would make $15 million to $20 million available to communities down the line to address potential impacts from the casino that couldn't be anticipated ahead of its licensing.
Newly elected West Springfield Mayor Ed Sullivan has been negotiating with MGM officials since he took office in January. Although MGM has designated the city a surrounding community, the specific details of an agreement for mitigation funds are still being hashed out. (Don Treeger/The Republican)
MGM has designated West Springfield as a surrounding community, although a specific agreement is still being hashed out between MGM and the town's newly elected Mayor Ed Sullivan.
Relative to the MGM casino application, the Majestic Theater and the Eastern States Exposition, both of West Springfield, argued in front of the Gaming Commission on Tuesday that they should be classified as impacted live entertainment venues based on the casino operator's entertainment pitch to the city.
Under a marketing arrangement cemented in the host community agreement between Springfield and MGM, the casino company agreed to leverage its standing with entertainment promoters and entertainers themselves to underwrite, co-promote, book and schedule at least four shows each at the MassMutual Center, Symphony Hall and CityStage annually following the opening of the casino.
Danny Eaton, president of the 229-seat Majestic Theater, said that he is concerned that additional offerings by Springfield venues, teaming up with MGM, would devastate his theater. He cited a non-scientific survey of patrons to his theater which concluded that they said it was likely they would frequent such venues, indicating there would be some type of impact.
"For 18 years we've competed fairly, and I think successfully," Eaton said. "We never heard from anyone at MGM until we filed this petition. We do want MGM to succeed. We just don't want them to succeed at our expense."
MGM officials said they don't believe the Majestic Theater should qualify for the status it's seeking because it is too small and typically books local productions and talent, whereas the 400-seat CityStage books regional and national shows. Mathis said that as far as entertainment is concerned, they are more interested in booking shows at Springfield venues that would draw people from outside the market.
Furthermore, Mathis said, MGM would be happy to coordinate calenders to ensure they don't compete with the local theater, and would promote the venue to their employees as a source of local entertainment.
09.10.2013 | WEST SPRINGFIELD -- Tim Maland, president of Hard Rock Hotel and Casino New England, left, greets Eugene Cassidy of the Eastern States Exposition after Cassidy addressed the crowd at the Dante Club in West Springfield following the vote that defeated the proposal to develop a casino at The Big E. (Republican Staff Photo by Dave Roback)
The Eastern States Exposition lost a bid in September to bring a Hard Rock casino to its property in West Side. Its officials previously stated and Tuesday maintained that their concern is that a Springfield casino would eat at the popularity of The Big E fair, which lasts for 17 days at the end of each summer.
The non-profit's CEO, Eugene Cassidy, read a prepared statement to the commission that recounted its storied history and his fears that MGM's entertainment pitch would impact its ability to draw top-notch acts like Brad Paisley and Beyonce, which are "critical to The Big E's existence."
Cassidy also expressed concern that MGM would hold conventions and trade shows, like the ones it discussed booking at the MassMutual Center last week, which would cut into its business.
MGM contended that the protections afforded by the state's designation as an impacted live entertainment venue don't apply to the possibility of MGM snagging some of its trade show business. The company also argued that its live entertainment offerings at Springfield venues wouldn't impact The Big E to the degree Cassidy is concerned it will.
Mathis noted that in 2013, The Big E had record attendance and it was the same calendar year MGM brought Pitbull, the Professional Bull Riders and Boys II Men to Springfield.
"The concept that they can do well, and we can do well, is not mutually exclusive," Mathis said, adding that MGM is willing to negotiate some type of marketing agreement with the Eastern States Exposition going forward.
MGM has successfully negotiated surrounding community mitigation agreements with Ludlow, Agawam, Wilbraham, East Longmeadow and Chicopee. The agreements with Agawam and Chicopee call for each municipality to receive $125,000 up front with annual payments of $150,000. Ludlow, East Longmeadow and Wilbraham are set to receive $50,000 up front with annual payments of $100,000.
In addition to the jobs promised to Holyoke residents in that city's surrounding community agreement, it will receive $50,000 up front and approximately $85,000 annually from MGM.
As with the surrounding community petitions, the Gaming Commission is expected to issue decisions on impacted entertainment venue status claims in the coming weeks.
The towns and cities petitioning Wynn Resorts and Mohegan Sun for surrounding community status in regards to the respective proposals for the greater Boston area casino license begin Tuesday afternoon and conclude on Wednesday.