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Select Board sends counterproposal to MGM

Date: 12/26/2013

By Chris Maza

LONGMEADOW – On Dec. 19, the Select Board voted to approve a counterproposal to MGM Springfield, however, it appears the two sides remain far apart in their attempt to work out a surrounding community agreement.

On Dec. 22, MGM Vice President of Global Gaming Development Michael Mathis informed Town Manager Stephen Crane that MGM would not accept the counterproposal.

The town’s counteroffer called for $950,000 in up front payments for infrastructure improvements and up to $100,000 in payments to offset the legal and consulting costs accrued during the process.

It also requests $500,000 in annual payments with a 2.5 percent annual increase and periodic “look back” studies, and the opportunity for Longmeadow to reopen negotiations with the gaming company should it expand its development in Springfield.

The monetary demands in Longmeadow’s counterproposal far outweigh those of other towns that have signed agreements to this point – “three to four times that agreed to by any other abutting community,” according to Mathis. Wilbraham and East Longmeadow both signed agreements that would garner the towns a total of $1.5 million in mitigation payments over a 15-year period with one- and five-year look backs.

While the agreements with Western Massachusetts communities have included annual payments in the hundreds of thousands of dollars, Malden agreed with Wynn Resorts on an agreement that would pay the town $1 million up front and annual payments starting at $1 million and increasing to $1.2 million by year six. After year six, payments increase annually by 2.5 percent.

Crane said those agreements were not considered when creating the town’s counterproposal.

“Certainly we are aware of other agreements around MGM Springfield and other casinos in other parts of the state, however, our focus has been on the unique impacts a Springfield casino would have on our community,” he said. “We certainly have respect for the other communities who through their approach are confident that those agreements are going to fit their needs and protect their communities. We in Longmeadow are trying to do the same thing.”

Mathis, however, said “as far apart as both parties are on dollars, we are even farther apart conceptually” in his letter of response to the counterproposal, adding that the offer made by the Select Board was “inconsistent with the law” and that the “look back” approach was the preferred method of mitigation because “it was precisely this kind of arbitrary ‘bid low/ask high’ process we were trying to avoid with the look back structure.”

He continued, “As you are well aware, the applicable law provides that a gaming operator is only responsible for mitigating significant actual known net impacts, and to be clear, we have no data, nor have we been provided with any data that would indicate Longmeadow will suffer such impacts from our project. Notwithstanding this, instead of asking the abutting communities such as Longmeadow to accept that at face value, we offered the look back approach, in addition to guaranteed minimum annual payments, which we are confident, more than complies with the law's requirements.”

Crane said the town was following the process that MGM had initially laid out for developing surrounding community agreement proposals earlier this year.

“Our position has been constant,” he said. “In the summer MGM made it clear they wanted to approach the agreements based on data and facts. They endorsed the peer review of their traffic study by the PVPC (Pioneer Valley Planning Commission) and we agreed and have participated fully in that study and initiated some studies of our own.”

Crane went on to say that process was just recently completed when the PVPC’s traffic consultant, Greenman-Pedersen Inc. (GPI), presented its findings on Dec. 10 and the narrative with recommendations for communities was not received until last week.

“We believed that report sets forth pretty clearly what a look back does not necessarily work as a primary source of mitigation. The GPI report also makes recommendations on what needs to be mitigated up front,” he said. “That information, along with the studies we conducted, were used to formulate our offer.”

According to GPI’s MGM Regional Traffic Impact Review memo, “Based on GPI’s sensitivity analysis approximately 53 new vehicle trips are expected to utilize local roadways in town during the Friday evening commuting peak hour. In addition however, Longmeadow is uniquely impacted by longstanding bottlenecks along I-91 around the Longmeadow curve (the interchange of Route 5/I-91). MGM is projected to generate an additional 286 peak hour vehicle trips along this stretch of highway during the Friday evening commuting hour, an already congested period.”

Mathis also asserted that the $500,000 in annual mitigation requested in the counterproposal was twice the amount the town’s legal counsel originally recommended; however, Crane called that “speculation based on reporting.”

“The counteroffer that was approved was the recommendation of our attorney,” Crane said. “Any discussion about what was reported during discussions of earlier draft proposals is really immaterial.”

MGM’s gaming license application, which is required to included surrounding community agreements, is due to the Massachusetts Gaming Commission by Dec. 31. If Longmeadow does not agree and become designated a surrounding community by that time, the town would have until Jan. 10, 2014 to petition the commission for that designation.

The determination on that designation would take place later that month and if it is received, the town would have 30 days to negotiate an agreement, starting on Feb. 7, 2014 and ending on March 10, 2014, at which time arbitration proceedings would begin.