Story unfolds at dizzying speed in Holyoke and Springfield

Date: 12/5/2012

By G. Michael Dobbs

news@thereminder.com

As the barkers in the stands of baseball stadiums used to say, "You can't tell a player without a program." Western Massachusetts residents following the ever-unfolding casino development drama needed a program last week to keep up with the events.

Holyoke Mayor Alex Morse is in, Ameristar is out and other events happened in-between.

The following is a day-by-day chronology of what happened last week in both Holyoke and Springfield. One should keep in mind that the clock is ticking for all potential developers. Any developer must pay the state $400,000 by Jan. 15, 2013 in order to be considered for a license. If a developer doesn't pony up the fee for state vetting, that company is out of the running.

In Springfield, only one developer has paid the $400,000 to date and that is MGM Grand Resorts, which plans to build a casino/retail/residential complex in the South End neighborhood of the city.

Nov. 24: Because both newspapers had been promised exclusive interviews — a breach of journalistic etiquette — about Morse's decision, the Boston Globe and The Republican broke an embargo and published their stories on Morse's turnaround, despite Morse's intent the news would be announced on Nov. 26 coinciding with the press conference.

Paper City Development LLC, the company that had sought a casino at Wyckoff Country Club and had partnered with Hard Rock International, responded as soon as its principals heard the news. Managing Partner Joseph Lashinger sent out a release on Nov. 24.

"We are just learning of Holyoke Mayor Morse's new position on a destination resort casino development for the Paper City. We respected his opposition when we last met in February. We respect his decision to change his opinion now, perhaps after weighing the tax revenue and real jobs that a significant gaming development can bring to Holyoke," Lashinger wrote. "When we met, we presented him with a world-renowned entertainment leader; Hard Rock International, and a complete and comprehensive plan for a destination resort casino with a major hotel. We presented him also with civil engineering and two traffic plans: one for immediate access and exit to Interstate 91 and the other to alleviate the traffic issues that already exist on [Route] 141 everyday without a casino at either Wyckoff Country Club or Mountain Park."

Nov. 26: Morse's announcement angers many people who crowd in and around his office at City Hall shouting "liar" during the press conference.

At Sheriff Michael Ashe's annual picnic this summer, I asked Morse if any developers had approached him since his last meeting with Paper City. He said no.

It's little wonder that Morse's announcement and his revelation that he has been meeting privately since September with businessman Eric Suher was met with anger from a key part of his base of support — the anti-casino group in Holyoke.

At the press conference, in answering a question from this reporter, Morse said city officials would now work on the process to determine which companies will get on the ballot, a process that would take "weeks." Morse also was not specific about any fee that the city would impose — as Springfield as done — and said that also would be decided in the next few weeks.

It should be noted that Morse is not alone as a mayor who changed his mind. For years, Springfield Mayor Domenic Sarno stated he was opposed to expanded gaming in his city and preferred "the casino in the woods" model. The difference between Morse and Sarno is that Morse made it a campaign issue, while Sarno never did.

Nov. 28: Weeks turned into days as only two days later, Morse sent three developers documents detailing the application process. Paper City Development, Suher and Charles Petitti of the Holyoke Non-Profit Casino received letters that told them although they have until Dec. 7 to file necessary documents, they were required to give the city of Holyoke a $25,000 "grant" by Nov. 30 in order to move forward.

According to the documents, the following schedule has been established:

"Dec. 5 and 6: Initial meeting with staff from the Office of Planning & Economic Development, in order for staff to respond to any technical questions you may have relative to the process outlined in this letter.

"Dec. 20 to 21: Deadline for submission of project concept and presentation by Gaming License Resort (GLR) applicants to the Community Committee.

"Jan. 3 to 4 [2013]: Presentation of draft Memorandum of Understanding (MOU), which will describe the next steps, being the host agreement negotiation phase, responsibilities of the parties and necessary fees to cover costs of the city moving forward.

"Jan. 10 [2013]: Determination by mayor if one or more project(s) meet(s) the initial threshold set by the criteria set out above, and designated to enter into an MOU, in conjunction with the Phase I application in order to negotiate a host agreement."

Morse's criteria for a GLR included that it will "not [be] a convenience gambling location, but rather a regional tourist resort with gaming as one of its many amenities;" that it will engage local ownership to invest in downtown Holyoke; that it must address impacts of crime and addiction; that it will "provide meaningful entertainment and recreation options other than gambling, and shall support local and regional entertainment options;" that it "shall not detrimentally impact local neighborhood traffic and shall fully mitigate any remaining such traffic;" that it has green construction; that it will train and use a local workforce; and "during construction and operation, the project shall maximize filling jobs with local residents, ethnic minorities, women and veterans, shall provide for labor harmony and shall commit to the payment of prevailing wages," among other requirements.

Wondering how Morse and his team managed to create the application process in two days, I sent him the following message via Facebook: "On Monday, you said in your press conference it would take 'weeks' for city officials to determinate casino selection process in the city. You also could not say if there would be a fee paid to Holyoke by developers. These were questions I asked. Earlier this afternoon I received a press release detailing the first step of the process and that there would be a $25,000 fee paid to the city as part of the initial application. Could you please explain to me why this information, which I'm sure you knew would be released today, couldn't be shared at the press conference? I'm also curious why the $25,000 is being called a grant rather than a fee. Thank you."

Morse's reply, "We developed this after Monday's press conference. We've been working quickly, I assure you."

Morse also traveled that day with other city officials to attend a City2City presentation in Bethlehem, Pa. to examine how a casino there has affected that region.

Also on Nov. 28, I asked Ameristar officials if that company intended to pay the $400,000 to the state for its Springfield location on Page Boulevard. Rumors were swirling around the city the location was being considered for a big box store development, possibly including Target.

The response I received was that I would be told next week.

Nov. 29: Holyoke City Councilor and State Representative-elect Aaron Vega told Reminder Publications that as a "whole body," Morse did not approach the City Council about his decision. Vega noted the state legislation created a limited role for the council.

Nov. 30: Ameristar pulled the plug on Springfield and released the following statement: "Ameristar Casinos Inc. announced today it has decided to terminate its efforts to seek a casino license in Western Massachusetts. Although the company believes it had the superior proposal for a casino in Western Massachusetts, the company concluded that there is not a sufficient likelihood that the basis upon which it could be awarded the license to develop and operate a casino in Springfield is favorable enough to warrant its further pursuit. Specifically, the local selection process, various project requirements and associated costs led to the decision to reserve Ameristar's resources for the company's growth and diversification for other more attractive opportunities.

"Ameristar has not made a determination at this time concerning plans for marketing the 40-acre site it owns on Page Boulevard in Springfield. Ameristar believes this is the single largest commercially developable site in the city of Springfield. The site's size, location and ease of access to major highways make it attractive for a variety of large-scale developments in addition to a casino.

"'This was a difficult decision that will unfortunately result in us not being able to bring a world-class casino entertainment facility to Western Massachusetts. However, I am extremely proud of the efforts of our team members who aggressively pursued this project. We are grateful for the hundreds of meaningful relationships we have built in the Pioneer Valley and the Commonwealth and for the widespread community support we received over the last year while introducing New Englanders to our Company,' said Gordon Kanofsky, Ameristar's Chief Executive Officer.

"Ameristar will continue its disciplined pursuit of acquisition and development opportunities to grow and diversify the Company that meet its risk and return on investment criteria. Ameristar seeks to maximize long-term shareholder value through the efficient operation of its properties and a balanced approach to debt repayment, dividends, share repurchases and the strategic pursuit of growth opportunities," the statement concluded.

Although Ameristar was the first company to express interest in Springfield and the only company to have actually purchased property here, the location did not meet the preference stated by Springfield Chief Development Officer Kevin Kennedy to Reminder Publications in January: downtown.

Springfield Mayor Domenic Sarno reacted by stating, "Obviously the city is very disappointed in Ameristar's decision to withdraw from the competition to locate a world class resort casino in Springfield. Ameristar made a strong proposal for an exciting project that would have given our voters a clear choice as to the type of location that would best serve the city. Nonetheless, I am confident that the proposals of MGM and Penn Gaming will create a robust competition resulting in a project that will not only revitalize Springfield, create thousands of good paying jobs for our residents, and significant opportunities for our business community with sustainable economic benefits for our great city, but also for Western Massachusetts, and the state. We wish Ameristar the best as they continue their business and pursue other opportunities."

Also on Nov. 30, Paper City Development announced it had fulfilled the first step required by Morse and had transferred its $25,000 "gift" to the city.

Lashinger said, "We are committed to Holyoke. Though we officially received these requirements less than 24 hours ago by Federal Express, we have already wired the $25,000 and our letter of intent to the appropriate parties as instructed."

Lashinger also announced his group had retained the law firm of Blank Rome to represent the company in negotiations.

Suher also paid his $25,000, but Petitti did not.

Dec. 2: Morse wrote on Facebook that he would seek to make the Holyoke casino a regional economic development issue. He said, "I will be sending every area mayor, including Mayor Sarno in Springfield, an invitation for a seat at the table — mayors themselves or their respective directors of planning/development. This is not a city-specific decision and we will be moving forward in that vain."

This regional approach was addressed in a Facebook posting by Chicopee Mayor Michael Bissonnette on Nov. 29. Bissonnette wrote, "Having worked with the mayors of Allentown and Bethlehem [Pa.], I have enormous respect for what they have accomplished by viewing casino potential as a regional asset to be shaped and shared by all the parties who have a stake in the successful development of such a job-creating enterprise. Banding together to make sure the Pioneer Valley is the true beneficiary of that success while understanding that there will need to be substantial mitigation of the downside of traffic like that of the Big E on a daily basis is what we need to strive for that is true no matter which community hosts the casino."