Scott Van VoorhisDon’t look now, but the cost of getting a major development project approved in the Bay State just shot up again.

The Las Vegas giants looking to build casinos in the Bay State are giving a whole new meaning to pay to play, a game developers across the our state know only too well.

Basically, the shakedown works like this. Local city, town or activist group says “not over my dead body” to some big project proposal. The developer then either comes back bearing gifts of cash, contributions and other goodies, or calls it a day.

But as Wynn and MGM barrel ahead with proposals to build mega casinos at opposite ends of the state, local officials aren’t even getting a chance to say no.

Instead, the casino giants are simply burying city leaders in Springfield and Everett in piles of cash, including a $1 million “signing bonus” for Springfield, courtesy of MGM.

 

Spending Competitors Under The Table

For MGM and Wynn, it’s a shrewd strategy.

Both big Vegas players are eager to pay what it takes to secure a piece of the lucrative Massachusetts gambling market.

And both are more than happy to spend their competitors under the table to grab it, doling out the kind of largesse that most cash-strapped local officials can only dream of.

MGM recently announced a deal with Springfield officials, under which the casino giant will shell out $25 million a year in local taxes and a mix of annual grants and other payments.

That includes the million-dollar signing bonus, which Springfield will use to help close a budget gap.

Wynn pledged $25 million a year in taxes and other payments as part of a deal for a $1.2 billion casino in Everett.

Oh yes, and a little sweeter as well, an upfront payment of $30 million.

For Wynn and MGM, the deals were crucial – winning over local officials is a requirement laid down by the Massachusetts Gaming Commission in order to compete for one of the state’s casino licenses.

But two Vegas high-rollers have also upped the ante for their competitors as well.

Suffolk Downs, which is fighting it out with Wynn for the Boston-area casino license, will be under pressure now to match or top what Everett is getting.

It’s hard to imagine Suffolk, backed by a high-powered group of New York developers, Boston businessmen and Caesars Entertainment, coming up with anything short of $25 million.

If nothing else, Mayor Thomas M. Menino is not going to let himself be upstaged by Everett’s upstart mayor.

The same goes for Foxwoods, which is pushing a competing proposal for a casino in suburban Milford, and Hard Rock, which is going head to head with MGM for the Western Massachusetts license.

 

A rendering shows Wynn’s plan for the Everett property.Setting A Pricey Precedent

Yet knowing how things work in this state, there may very well be some long-term blowback for other developers with plans for big projects in Massachusetts who may have no connection at all to the casino industry.

After all, such big money mitigation deals were long the province of Boston, where Menino’s City Hall became adept at routinely extracting millions in “community benefits” from developers.

But as Springfield and Everett have shown, others can play this game as well.

Still, it’s hard to root against scrappy, hard-luck cities like Springfield or Everett.

It’s kind of like cheering for the sheriff and dissing Robin Hood.

Springfield officials wisely pitted MGM against Penn National in its own mini-competition, going with the best offer.

The city, which is struggling to come back from a devastating tornado, is looking to leverage all this casino cash to rebuild the hard-hit South End and reinvigorate its downtown.

With its annual payments from MGM, Springfield also plans to hire 15 new police officers, creating a downtown “security district.”

MGM has also agreed to bring in several conventions to Springfield’s Mass Mutual meeting hall, not to mention top entertainment acts.

“It is going fast and furious here,” Kevin Kennedy, Springfield’s chief development officer, told me the other day. “We went back and forth three to four times before we got the final and best offer.”

Everett plans to use its Wynn windfall to build new police and fire stations.

We’ll see whether there is any spillover effect from these deals.

But you can bet city and town officials across the state have dollar signs in their eyes right now.

Casino Money Sweetens Deal For Cash-Starved Towns

by Scott Van Voorhis time to read: 3 min
0