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Town remains proactive with MGM casino mitigation

Date: 5/15/2014

By Chris Maza

LONGMEADOW – While there is a lull in overt activity regarding casino mitigation at the moment, the town administration is internally reviewing the best course of action.

In the wake of its victory over MGM Springfield in arbitration for a surrounding community agreement, Town Manager Stephen Crane said Longmeadow is currently calculating the total cost of consultants and legal fees, which it will submit to MGM for reimbursement. After that, the town will begin formulating a plan for addressing the issues it raised in its arguments for a large mitigation settlement.

“The first thing we have to do is settle up on those [legal] expenses. We hope to get that money as soon as possible. I don’t know if they’re going to fight us over [the amount]; we’ll see,” he said. “The next step – and I’ve had this discussion with the town engineer – is developing a work plan for the improvements we identified for traffic and a financing plan.”

Crane said there were several scenarios that were being considered, including bonding the projects in their totality or financing them periodically as issues are addressed, among others.

Actual work will likely not begin until the Massachusetts Supreme Judicial Court (SJC) makes its ruling as to whether or not to allow a petition submitted by the statewide group Repeal the Casino Deal to put a question on the ballot to void the state’s casino legislation, however, Crane said it was in the town’s best interest to remain proactive.

“If the SJC makes a decision and the question is not on the ballot, we’ll be ready to go,” he said. “Obviously, if [the question] is on the ballot, we’re still on hold until November, but coming up with an action plan now ensures we’re not thinking about it down the line.”

In addition to a plan for construction and financing, Crane said the town was working on developing an effective strategy for monitoring the impacts a casino in the South End of Springfield would have on traffic and public safety.

“Because we went through all of the data analysis [during the surrounding community agreement process] I think we have a pretty good sense of what we want to monitor and how we want to approach determining what impacts are being caused by MGM Springfield and what are considered normal,” he said.

Longmeadow recently executed the surrounding community agreement. The Select Board signed it at its May meeting and Crane said he received a copy signed by representatives of MGM Springfield electronically.

Arbitrators ruled 2-1 in favor of the town’s best and final offer, which requires an $850,000 up front payment and $275,000 in annual mitigation payments over 13 years after the proposed resort casino in the South End of Springfield opens its doors. It also calls for “look-backs” and the option to re-open negotiations.

According to the agreement, the up front payment must be made within 30 days of the award of a gaming license to MGM. The Massachusetts Gaming Commission (MGC) is expected to make a licensing determination on June 13.

During the MGC’s hearing on May 2 regarding the arbitration decision, MGM Springfield’s local legal representative Seth Stratton of Fitzgerald Attorneys at Law told the commission that while the gaming company would honor the arbitrator’s decision, they felt there was a “fundamental inconsistency” in the gaming legislation.

He argued that the agreement should allow MGM to lower its annual mitigation payments if the look backs incorporated within it show that the cost to mitigate negative impacts was less than the amount outlined in the agreement.

“The issue we have had all along is the fundamental inconsistency with fixed payments that are not tied to specific impacts,” he said. “The legislation and agreement allows the establishment of a floor, but gives the town a chance for a windfall.”

Longmeadow’s special counsel Brandon Moss of Murphy, Hesse, Toomey & Lehane, LLP, rejected the notion of a fundamental inconsistency and said Stratton’s argument was MGM’s “attempt to get a third bite at the apple.”
The commission ultimately sided with Longmeadow and rejected the MGM’s objections.

“We were grateful for today’s discussion regarding the arbitrators’ rulings.  Although the awards were not adjusted as we had hoped, we very much appreciated the Massachusetts Gaming Commission’s recognition that certain fees need to be tied to impacts, and these mandated surrounding community agreements qualify for future re-evaluation. The final stages of the licensing process are upon us, and we look forward to the Commission’s June 13 licensing determination,” Michael Mathis, president of MGM Springfield, said.