MGM casino redesign and final state casino license weighed
Sep. 25, 2015
BOSTON (AP) — Massachusetts gambling regulators expressed concern and frustration Thursday over major revisions MGM has proposed for its $800 million Springfield casino that regulators say took them by surprise.
Also Thursday, the commission declined to issue a blanket commitment to award the state's third and final casino license.
Las Vegas-based casino giant MGM wants to eliminate a 25-story hotel tower and a separate building for residential apartments from the downtown resort casino project, among other changes.
The company still plans to offer a 250-room hotel, but in a six-floor building located where the apartments would have been along Main Street. The apartments are now being considered as a separate project off the 14.5-acre development.
State Gaming Commission member Enrique Zuniga said he's concerned the changes might diminish the appeal of the casino and impact the state's share of casino profits.
"I'm a little troubled by this request," he said at Thursday's hearing near the Springfield casino site. "A significant feature of this project — what you sold this commission, this city and this community — is now no longer there, and I'm worried about it."
MGM Springfield President Michael Mathis said the loss of the soaring glass tower shouldn't impact the casino's bottom line: "The Springfield skyline is littered with high-rises. High-rises aren't what's going to make this work. It's going to be our MGM brand, our player database."
Springfield Mayor Domenic Sarno, who supports the changes, has said the new design should draw more visitors to downtown because it's more focused on pedestrian activity and a better fit with historic Main Street.
Pressed by commission members, Mathis acknowledged Thursday that the changes were prompted by higher-than-expected construction and labor costs. "This is largely a reaction to pricing," he said. "I'm not going to pretend that cost is not the issue. Cost led us to start evaluating the design."
Gaming Commission Chairman Stephen Crosby said he's frustrated the cost inflation problems didn't come to light sooner.
MGM and other licensed casino companies deliver quarterly status reports to the commission, which also has paid staff and consultants monitoring the developments, he and other commission members noted.
"This is a very big issue which caught us by surprise," Crosby said. "Somewhere along the line something happened that we didn't know about until very late in the game."
Meanwhile, commission members said they're still actively reviewing Mass Gaming and Entertainment for the final casino license in Massachusetts. Mass Gaming is the lone applicant for the resort casino license reserved for the southeastern region of the state.
Commission members said they're unwilling to commit to awarding the license for the company's proposed $650 million casino in Brockton.
The comments followed last week's surprise news that the federal government is placing 151 acres into trust for the Mashpee Wampanoag tribe, which wants to build a $500 million casino in Taunton, about 20 miles from Brockton.
Mass Gaming, which has threatened to drop its proposal without a commitment from the state, said it intends to "make a strong case" for why approving its proposal is in the state's best interests.
The Mashpee Wampanoag, which has called on the state to respect the 2013 compact the two sides reached over revenue-sharing if the tribe were to open a resort in Massachusetts, said it believes the commission will eventually decide the opposite: that the tribe should be the only resort casino operator in the southeastern region.