Thursday, February 06, 2014
One of the biggest business deals in western Massachusetts history is going to the wire. The state Gaming Commission will decide by May 30 whether to allow MGM Resorts to operate a casino in Springfield.
After outlasting competitors for the lone western Massachusetts betting palace, MGM’s brass can surely taste victory. But before their $800 million project gets the green light, after years of study, design, politicking and public relations, they may have to oil a squeaky wheel.
The lubrication of choice? Money — and a considerable sum of it.
Late last month, the commission heard Northampton Mayor David J. Narkewicz claim his city will suffer financially from the advent of gaming 16 miles down Interstate 91. Unlike some cities and towns near Springfield, Northampton wasn’t able to negotiate a voluntary “surrounding community” agreement with MGM for its project in downtown Springfield.
West Springfield got a deal. So did Ludlow, Agawam, Wilbraham, East Longmeadow (but not Longmeadow) and Chicopee.
Northampton was dealt a different card. “Go Fish,” it said.
MGM’s vice president of global gaming development, Michael Mathis, didn’t just say no to Northampton. He seemed, in one remark, to laugh it out of the room. “We also reject out of hand,” he wrote to an attorney representing Northampton, “the notion that a thriving Springfield and a thriving Northampton are mutually exclusive.”
Sometimes a false notion sneaks in. No one has claimed success in one of the cities denies it in the other.
But here in the Valley, the interstate corridor — and soon improved rail service — makes Springfield and Northampton neighbors. Thousands of people commute from one to the other daily. And discretionary dollars spent on entertainment flow north and south.
How many dollars? To bolster its case before the commission, Northampton hired a consultant to calculate how much city restaurants and retailers would forfeit in trade to a new casino.
A report in December estimated that businesses would lose $4.4 million to $8.8 million a year if MGM’s project goes ahead. Northampton employers would trim 90 to 180 jobs as a result of falling revenues and see their yearly earnings decline between $1.6 million and $3.2 million. The study, by Camoin Associates of Saratoga Springs, N.Y., found that Northampton’s municipal revenues would drop between $137,000 and $274,000 a year, due in part to decreases in meals and hotel tax receipts.
The commission was to decide Thursday whether to order MGM to recognize Northampton’s right to compensation. It now says it will rule Feb. 18.
We expect the panel to find that Northampton’s claim holds merit. We then expect MGM to continue to fight it, but only for a while, and without much passion.
Filings with the commission describe the economic impact on Northampton as “grave and substantial.” The impact of Northampton’s claim on MGM is hardly that. As Mathis’ business card reminds everyone, this is a global company with a cash flow rivaling some governments. The company stands ready to pay Springfield $28 million a year.
Ante up, MGM. Show Northampton the respect it has earned as an entertainment destination. Resolve from the start to be a good corporate neighbor to the whole Valley.