Northampton mayor asks City Council to approve $22,000 study of casino’s impact on local economy

Last modified: Thursday, December 05, 2013
NORTHAMPTON — With Northampton’s efforts to negotiate a mitigating casino agreement with MGM Resorts International at a near standstill, Mayor David J. Narkewicz is laying the groundwork for a potential petition to the Massachusetts Gaming Commission to have the city designated as a surrounding community should MGM be granted a casino license in Springfield.

The mayor will ask the City Council Thursday night to approve spending $22,000 to hire an independent consulting firm to study potential negative economic impacts of MGM’s proposed $800 million casino on retail, entertainment and service businesses in Northampton.

“I’ve been fairly outspoken and consistent about my concerns about a casino in the region, especially in the same economic market as Northampton,” Narkewicz said. “My reasoning for asking the council to fund an economic impact study is to get clear data on what the potential impacts are.”

The city has hired an attorney who specializes in the casino industry to negotiate a mitigating — also known as a surrounding or neighboring — community agreement with MGM officials, but those off-and-on efforts over the last several months don’t look promising, Narkewicz said.

The city had been in similar negotiations with Mohegan Sun, which had proposed to build a casino in Palmer. Those negotiations ended when Palmer voters rejected the casino plan on Nov. 5. Voters in West Springfield also rejected a casino proposal by Hard Rock Hotel & Casino New England, leaving MGM as the lone remaining company seeking a casino license in western Massachusetts. Springfield voters in July approved MGM’s casino resort complex in the city’s South End.

The deadline to submit final applications to the Gaming Commission is Dec. 31. MGM spokeswoman Carole Brennan said the company is negotiating mitigation agreements with eight communities that could be impacted by the casino project, but they do not include Northampton. Seven of the communities border Springfield — Agawam, Longmeadow, East Longmeadow, Wilbraham, West Springfield, Chicopee and Ludlow. The company is also negotiating with Holyoke, Brennan said.

MGM reached an agreement with Ludlow this week that calls for the company to pay the town $75,000 a year.

Communities that do not have a mitigation agreement in place by the Dec. 31 deadline can petition the Gaming Commission no later than 10 days after final applications are submitted if they believe they should be deemed a surrounding community. Narkewicz said he is preparing to file such a petition and intends to use the data from the independent study should he be called to appear before the commission on the matter.

“I believe we qualify as a surrounding community under the Mass. gaming regulations ... it is my intent to take that step if we are unable to reach an agreement with MGM,” Narkewicz said.

Although Northampton is 16 miles from Springfield, the mayor believes the casino would have a negative impact on his city’s entertainment, dining and retail businesses. In addition to proximity to the casino, the Gaming Commission will also consider economic impacts on surrounding communities as part of its decision-making process in determining which qualify for mitigation funds.

Narkewicz said a few firms have submitted quotes to the city to complete the study, although a specific company would not be selected until the council approves spending the money. All of the firms are able to complete the study before the end of the year.

While the council is being asked to approve the money before the study is completed, Narkewicz said he intends to apply to the Gaming Commission, as spelled out in the state gaming laws, for reimbursement for the study and other legal fees associated with casino negotiations.

Additionally, Narkewicz said he has received financial commitments from the business community to help offset the cost of the study. Groups offering financial support include the downtown Business Improvement District, the Greater Northampton Area Chamber of Commerce and entertainment mogul Eric Suher, who owns Iron Horse Entertainment Group and holds events at several Northampton venues, including the Calvin Theatre, he said.

Narkewicz said his efforts to have Northampton designated as a surrounding community by the Gaming Commission are not “in any way” about Northampton versus Springfield. He spoke with Springfield Mayor Domenic J. Sarno earlier this week about steps Northampton was taking in relation to the casino.

“I need to be an advocate for Northampton and make sure our economic interests are protected,” Narkewicz said.

Meanwhile, the Gaming Commission has scheduled public hearings for MGM on Monday in Boston to release and discuss the results of background checks on the company’s finances and track record. The hearing is scheduled for 9:30 a.m. in Room 151 at the Boston Convention and Exhibition Center, 415 Summer St.