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Town, MGM head to arbitration after failing to reach agreement

Date: 3/27/2014

By Chris Maza

LONGMEADOW – Despite having an additional month in which to negotiate, MGM Springfield and the town of Longmeadow failed to come to a consensus on acceptable terms for a surrounding community agreement.

Because of this failure, the two sides will now go to arbitration to determine a proper mitigation settlement for adverse effects of a casino in Springfield’s South End neighborhood on the town.

“We have been consistent in our approach of seeking an agreement based on knowable and predictable factors in order to protect the town of Longmeadow and its residents,” Town Manager Stephen Crane told Reminder Publications. “We continued negotiations with MGM, but ultimately determined that we could not accept what they were offering because it would not adequately protect the town.”

Longmeadow was one of two communities along with West Springfield that were granted surrounding community status by the Massachusetts Gaming Commission (MGC) on Feb. 18, allowing an additional 30 days to reach an agreement. West Springfield was also unable to come to terms with MGM.

“We have had a series of meetings with both Longmeadow and West Springfield. With six surrounding community agreements signed we were hopeful that we could finalize the remaining two within the allotted time frame. Despite the best efforts of all parties we have not been able to reach that point,” Carole Brennan, MGM Springfield spokesman, said. “The [Massachusetts] Gaming Law is a well thought out piece of legislation that planned for such a situation. We now look forward to an arbiter’s resolution, so we can move on in the licensing process.”

Crane said he would not discuss the details of any offers during negotiations.

However, at a March 3 Select Board meeting, Chair Marie Angelides reported to the board that in its latest offer, MGM proposed an agreement that would address only the intersections of Route 5 and Forest Glen Road and Route 5 and Converse Street, which were identified in the MGC’s hearing as needing improvement to keep services level. There would be a cap on reimbursement of repairs as well as legal and consulting fees of $700,000. There would also be a one-year “look back.”

Prior to the surrounding community hearing before the MGC, MGM offered Longmeadow $50,000 to offset legal and consultant fees, plus an annual $75,000 annual mitigation payment.

The town countered with a request for $950,000 in up-front payments for infrastructure improvements; up to $100,000 in payments to offset the legal and consulting costs; $500,000 in annual payments with a 2.5 percent annual increase and periodic “look back” studies; and the opportunity for Longmeadow to re-open negotiations with the gaming company should it expand its development in Springfield.

The town and MGM are in the process of selecting an arbitrator to hear the case with a deadline of March 27. Crane explained that the two sides were allowed the opportunity to agree upon an arbitrator, but if they cannot, each side would name their choice and the two arbitrators would select a third, creating a panel that would hear the case. If a neutral third arbitrator cannot be identified, the MGC would select one.

Once an arbitrator is chosen, the hearing process will proceed through April 16, at which time an arbitration report will be filed with the MGC and distributed to the towns outlining the specific terms of the surrounding community agreement determined by the arbitrator or panel.

Based on those specifications, the two sides must then sign a surrounding community agreement by April 24. If an agreement isn’t signed, the MGC will determine that the arbitrator’s report is the agreement and both sides would have to adhere to it.

The MGC’s goal, according to its timeline, is to award the gaming licenses for resort casinos by May 30.