Oct 18, 2013
05:25 AMThe Connecticut Story
Connecticut Casinos Look to Get In On Massachusetts' Casino Expansion
Located on the 32-acre site of a former Monsanto chemical plant, Wynn Resorts Ltd.’s proposed Massachusetts casino, Wynn Everett, is a $1.2 billion project featuring a 550-room hotel.
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When the Massachusetts State Legislature passed its Gaming Act in 2011, it authorized the Massachusetts Gaming Commission (MGC) to license three regional resort casinos and one statewide slots parlor. Before anyone could say, “And they’re off!” Connecticut superstars Foxwoods Resort Casino in Mashantucket and Mohegan Sun in Uncasville had applied for two of the licenses: Foxwoods in Milford, Mass., 25 miles from Boston (part of Region A), and Mohegan in the western Massachusetts town of Palmer (Region B).
So far, they’ve both submitted the requisite 230-page application to the MGC, along with a signed host-community agreement, and anted up the $400,000 fee. The next challenge they face is winning a referendum vote in these communities: Mohegan’s vote takes place on Nov. 5, and Foxwoods’ on Nov. 19. If they do, the MGC plans to make the call for Regions A and B by the end of April.
Applicants will be evaluated on five criteria, says MGC Director of Communications Elaine Driscoll: “potential for economic development, finance, building and site design, community mitigation and the quality of the general overview, what we call the ‘wow factor.’” Of these, she adds, community mitigation—how applicants have agreed to remunerate the host community on issues such as public safety, traffic and infrastructure concerns—is an element “very important to MGC’s mission.”
The mitigation agreements currently stand as follows: Foxwoods has agreed to pay the town of Milford $33 million for community development up front—which will expand local police, fire and sewer services, and finance a new ladder truck for the Milford Fire Department (at an estimated price of $1 million)—as well as more than $30 million in projected annual payments, including real estate taxes, 2 percent of all gross gaming profits above $500 million, and school-aid contributions. Foxwoods’ development team has agreed that 95 percent of its hires for the 3,000 permanent jobs created by the project should live within a 50-mile radius.
Mohegan Sun’s agreement with the town of Palmer includes $16 million in annual payments for economic development, larger fire and police departments, and publicworks improvements, including 25 percent of the casino’s first $400 million in gaming revenue. This sum would constitute half of the entire 2014 operating budget for Palmer—a town of only 12,500 people—and exceed its annual tax revenue for the year.
Both casinos face stiff competition. Foxwoods is squaring off against Wynn Resorts Ltd.—the company owned by famed Las Vegas casino mogul Steve Wynn—which is proposing a casino in the Region A town of Everett that won 86 percent approval in a June referendum vote. A third bid, for a casino in East Boston, has been proposed by the Massachusetts owners of the Suffolk Downs race track.
Since a bid by Hard Rock Massachusetts to establish a casino in West Springfield was voted down by community referendum in June, Mohegan is now in a mano-a-mano contest with MGM Resorts International’s proposed casino in downtown Springfield. MGM’s urban plan contrasts sharply with Mohegan’s design for Palmer, which is a $1 billion shopping, dining and entertainment complex with 300,000 square feet of retail space, two hotels and a 70,000-square-foot, indoor-outdoor aquatic adventure park. Set on 150 acres amidst wetlands and forest just off the Massachusetts Turnpike, the Mohegan complex will attempt to evoke a hilltop town in Europe.
Foxwoods’ Massachusetts proposal—also boasting a $1 billion price tag—promises nearly 1 million square feet of gaming, retail and resort amenities, plus a 5,400-space parking garage. Whatever the ultimate cost of these projects, there’s little doubt they’ll pay big dividends, if Foxwoods’ and Mohegan’s history in Connecticut is a reliable indicator.
Founded by two of the state’s tribal nations (the Mashantucket Pequot Indians . who opened Foxwoods in 1992; and the Mohegan Indians, who followed suit with the Sun in 1996), over the past 20 years the casinos have contributed billions of dollars to state coffers under an agreement that requires them to file 25 percent of their slot-machine revenue in taxes every year. In 2007, says state Rep. Stephen D. Dargan (D-West Haven)—who, as co-chair of the legislature’s Public Safety and Security Committee is responsible for casino oversight—this sum reached its peak of $430 million. “A good percentage of that went back to our 169 towns, and helped them keep property taxes down,” he says.