Officials from MGM Resorts Thursday sought to persuade at times skeptical Massachusetts casino industry regulators that proposed design changes to the company’s Springfield casino project would be an improvement and not a downsizing.
MGM Springfield President Mike Mathis said the proposed changes that scrap plans for a 25-story glass façade hotel tower were driven by “skyrocketing” estimates of construction costs. Addressing a meeting of the Massachusetts Gaming Commission, he insisted the core elements of the casino project remain unchanged including a commitment to spend at least $800 million to build it, hire at least 2,000 construction workers, and make annual payments to Springfield totaling $24 million.
" The project that we promised is the project that we will deliver," Mathis said.
Mathis said eliminating the 250-room hotel tower in favor of a six-story 250-room hotel spread along a block of Main Street will reduce the construction costs, but will not adversely impact the marketing of the casino or make it less attractive to so-called “higher roller” gamblers.
" The way I think about is: no one can see the tower from Hartford," said Mathis.
Commissioner Enrique Zuniga questioned whether the resort casino, without the glitzy high rise hotel, could deliver the gambling revenues promised to the state.
" I want other opinions, but a significant feature of this project that you sold to this commission, the city, and the community is no longer, and I am worried a little bit," said Zunica.
The Springfield casino, which has been billed as the largest economic development project in western Massachusetts in a half-century, has already been delayed a year because of the reconstruction of Interstate 91, which runs directly in front of the casino site. Mathis said the redesign would not cause further delays.
When the Springfield casino is scheduled to open in September 2018 it will likely face competition from new casinos in New York, and possibly Connecticut. Gaming Commission Chairman Stephen Crosby pointedly asked Mathis to address “scuttlebutt” that MGM plans to downsize, or abandon the Springfield project completely.
" Where is MGM and MGM corporate on its commitment to the Springfield project," Crosby asked?
" Fully committed," Mathis replied.
Crosby said the commission has no timetable for making a decision on the proposed changes to the MGM project.
MGM’s new design proposals appeared suddenly. There was no mention of any possible design changes when MGM asked the gaming commission in July to approve a new construction schedule. During lengthy negotiations about the project with the Massachusetts Historical Commission that concluded just last month, MGM was reportedly adamant about building a high rise hotel.
Springfield Chief Development Officer Kevin Kennedy said MGM briefed Mayor Domenic Sarno and other city officials about the proposed changes just 10 days ago.
" From the information we've seen so far, it seems like something we can work with, but we need more in depth discussions with MGM, the gaming commission and our consultants," said Kennedy.
Because the development agreement between MGM and the city, known as a host community agreement, specifies the project include a glass façade hotel tower, the agreement will have to be amended and approved by the city council.
Springfield City Council President Mike Fenton who said he was stunned by the news about the casino redesign has scheduled a special council meeting for Tuesday, Sept. 29th to discuss the proposed changes.
" There is no objective reason for the city to permit them ( MGM) to substantially walk back on their commitments just because they now think it is too expensive," said Fenton.
Springfield voters ratified the host community agreement with MGM in a referendum on July 16, 2013. If the city council votes to amend the agreement, it would not trigger another voter referendum, according to City Solicitor Ed Pikula.
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