Northampton mayor pledges to 'redouble' economic development following unfavorable gaming commission ruling

Last modified: Thursday, February 27, 2014
NORTHAMPTON — Mayor David J. Narkewicz said the city plans to move forward and “redouble” its efforts to strengthen Northampton’s local economy after the Massachusetts Gaming Commission’s decision Tuesday not to grant the city financial relief from MGM Resorts International.

Northampton had sought designation as a “surrounding community” before the commission in response to MGM’s plans to build an $800 million casino campus 20 miles away in downtown Springfield. The five-member commission on Tuesday unanimously denied the city’s and the town of Hampden’s petitions, though Longmeadow was granted surrounding community status. The commission’s decisions are final and cannot be appealed under the state’s gaming law.

Narkewicz, who said he was surprised and disappointed with the decision, last month pleaded the city’s case in Boston for mitigating the economic impact a casino in Springfield would have on his city. In his petition, he also sought to recover from MGM approximately $42,500 in consulting and legal costs the city spent to examine the issue, which the commission also denied Tuesday.

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“Northampton is trying to protect its local economy and what we’ve created here with our businesses and restaurants and entertainment,” Narkewicz said shortly after the commission’s ruling, which was streamed live over the Internet. “We’re going up against one of the largest entertainment companies on the planet.”

“I believe we had a valid argument,” he added. “They’ve ruled and we’ll have to accept their ruling.”

The casino developer had already struck financial agreements with six surrounding communities in Hampden County, but declined to designate Northampton as a surrounding community. In a formal petition to the city, attorney Jeffrey I. Fialky, who was representing Northampton, wrote: “The future of Northampton’s economic fabric is at risk given the economic and fiscal impact it will endure as a result of the MGM development.”

The city commissioned an economic impact study by Camoin Associates of Saratoga, N.Y., which found that Northampton businesses stand to lose $4.4 million to $8.8 million if MGM builds its casino complex in Springfield. The study also found that Northampton employers would cut 90 to 180 jobs and lose $1.6 million to $3.2 million in annual earnings.

MGM disagreed with the city’s position, arguing that Springfield is not close enough to Northampton for the proposed casino complex to hurt it economically.

MGM on Tuesday issued a statement from Michael Mathis, incoming president of MGM Springfield, regarding the commission’s rulings, saying it was pleased the panel agreed with its assessments regarding Northampton and Hampden.

“We have dedicated considerable time and resources to understanding the region and how MGM Springfield fits into it,” the statement read. “We strongly believe that all of western Massachusetts will benefit from a rejuvenated Springfield and we look forward to that reality.”

While some gaming commissioners agreed that Northampton was close enough geographically to Springfield to be considered for potential negative impacts, they placed a particular emphasis on Northampton’s study by Camoin Associates. The commission, which had its own team of consultants examine the issues, was largely critical of the report because it did not examine the potential positive impacts a casino could have on Northampton.

“It’s disappointing this study only addresses what the negative impacts would be,” said commissioner Bruce Stebbins, who is a former Springfield city councilor.

Said commissioner James F. McHugh, “I don’t see the case made for Northampton’s claim that it’s going to be adversely affected by the operation of a casino.”

McHugh also said Northampton’s analysis did not account for area communities recapturing dollars from residents and tourists at a Springfield casino who would otherwise be spending money at gambling and entertainment facilities in places like Rhode Island and Connecticut. Narkewicz said the so-called “repatriation” of those dollars to benefit Massachusetts lacks solid evidence.

“Casino revenue is already a shrunken pie and this idea that they’re going to repatriate these dollars ... I don’t know if there’s convincing evidence to show that’s going to happen,” he said.

Narkewicz said that while he respects the commission’s ruling, he was surprised it put so much emphasis on the city not addressing the potential positive impacts MGM’s casino development could bring to Northampton.

“I think what was surprising to me was that this is a process by which petitioners were required to demonstrate some significant negative impacts on their community, and I believe we did that,” Narkewicz said.

Conversely, MGM’s did not address the potential negative impacts its proposed development will have on Northampton in the petition process.

“One of our fundamental assertions to the commission was, how can there be only positive impacts and no negative impacts?” Narkewicz said. “The commission seems to be saying that in the weighing of the two, the positives outweigh the negatives.”

“I’m dubious of that conclusion,” the mayor added. “Nobody has yet to show to me what the overwhelming positives are in Massachusetts, frankly.”

Dan Crowley can be reached at dcrowley@gazettenet.com.