• News

    MGM Springfield prepares to distribute nearly $2M in initial payments to ‘surrounding communities’ of $800M urban casino

    December 3, 2014

    As MGM Resorts Internationalworks to obtain all the necessary permitsto begin breaking ground in early 2015 for its $800 million Springfield casino, the company is also preparing to shell out nearly $2 million to eight Western Massachusetts communities on Friday, Dec. 5.

    The surrounding community agreements, as required by the 2011 Expanded Gaming Act, called upon MGM to work with communities which sought that status to determine a payment schedule to offset any potential negative impacts its massive Springfield project could have on a neighboring town or city. In the end, eight communities landed that designation, and there is a wide disparity between just how much money each is getting.

    MGM plans to quietly make initial payments totally $1,965,000 Friday without any fanfare. 
    While each surrounding community agreement has its own clauses and stipulations, each breaks the money down in terms of an upfront payment and annual payments.

    As for the host city, MGM on Nov. 20 paid Springfield $1 million to establish an unrestricted community development grant and an additional $150,000 to establish an MGM pavilion at Franconia Golf Course. Additionally, MGM is slated to make upfront payments to the city over the course of the years leading to the 2017 grand opening totaling around $14 million.

    Longmeadow, a wealthy suburb directly to the south of Springfield, is set to receive the most assistance from MGM of any surrounding community, as the initial payment alone is $850,000, and that doesn’t include the mandatory reimbursement for costs incurred by the town in hiring consultants for studies on how a nearby MGM casino could affect its residents.

    The initial payment is earmarked “specifically to address traffic and roadway infrastructure impacts that have been studied and determined by the Community, an independent peer review undertaken by the Pioneer Valley Planning Commission, and the Commission’s independent consultants,” the town’s agreement with MGM states. After the casino opens, Longmeadow’s deal with MGM states that within 90 days, the first annual payment of $275,000 is due.

    West Springfield, which sits just west over the Connecticut River, is set to receive $665,000 for the initial steps in the reconstruction of Memorial Avenue, which leads to Springfield’s downtown via the Memorial Bridge. Memorial Avenue, despite being the central right of way for the annual Big E fair at the Eastern States Exposition, is in horrible condition. A ride on the road in a car can be likened to hitting a wood-framed rollercoaster, but with MGM’s contribution, that could change.

    West Side is also set to receive annual payments of $375,000 with additional stipends for look-back studies to ensure the community isn’t incurring unforeseen negative impacts from the casino that it isn’t equipped to handle.

    The other irregular surrounding community agreement is between MGM and the city of Holyoke, thanks to the diligence of Mayor Alex Morse. Despite having his own temporary change of heart on casino gaming, Morse spent time working with MGM officials to make his pitch that despite the fact that Holyoke and Springfield don’t share a border, his municipality is a surrounding community.

    Holyoke’s initial payment is $50,000 which can be used for any purpose relating to the casino or a study of a particular aspect of the casino’s impact on the city, according to the document. It’s annual payments are also on an irregular schedule. In the first year after opening, Holyoke is supposed to get $85,000. In year two, the number climbs to $135,000. Then years three through five it dips to $85,000, only to climb to $160,000 for year six. Years seven through 12 Holyoke gets $85,000 and years 13-15, it gets $43,334.

    Additionally, Morse negotiated a clause in the contract that doesn’t just ensure that the annual payments can be spent any way the city sees fit, but encourages MGM to give city residents a boost through employment.

    While both the Longmeadow and West Springfield agreements were set by arbitrators, MGM successfully negotiated surrounding community mitigation agreements with Holyoke and five other communities.

    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.

    Several nearby communities, such as South Hadley, Belchertown and Granby, declined to attempt to get in on the action. Northampton and Hampden were denied bids to be designated surrounding communities.

    Officials from Hampden had voiced concerns about increased traffic coming through its town from Connecticut to the casino. MGM officials argued that most of the Connecticut traffic would access the casino via Interstate 91, with a small portion coming from the Monson and Stafford, Conn., areas. In the end, the Massachusetts Gaming Commission sided with MGM.

    Northampton Mayor David Narkewicz’s primary concern was about how an MGM-infused downtown Springfield entertainment scene would impact the businesses in his city, which is situated about 20 miles north of the casino. But when the commission ruled, it was member James McHugh who said, “I don’t see the case made for Northampton’s claim that it would be negatively impacted by the casino.”

    MGM Resorts International was awarded the sole Western Massachusetts casino license for its $800 million Springfield casino which it hopes to open in 2017. Wynn Resorts won the Eastern Massachusetts license for its $1.6 billion Everett project on the Mystic River and Penn National Gaming’s $225 million Massachusetts slots parlor is already under construction at the Plainridge Race Track in Plainville.

    The commission recently agreed to extend its deadline for applying for a license in Region C, the southeastern part of the state, until the end of January.


    press release contact
    AGA Press

    5183687050