Don’t bet on seeing Don Chiofaro or John Fish out there angrily waving “Casino No!” signs as the campaign to repeal the state’s gambling law hits full swing this fall, though you never know with Don.
But some developers and construction moguls may be tempted to quietly cast a vote for the casino-repeal referendum when they enter the voting booth come November.
The Great Casino Bill was envisioned as a pump-primer in the days after the Great Recession, a way to get money back into the pockets of laid-off construction workers and breathe life into the dormant development industry.
Now three years and countless controversy, foolishness and delays later, Massachusetts is finally ready to license a $1.3 billion-plus Boston-area casino – provided anti-gambling activists don’t manage to kill the whole thing in November.
But the mega casino project – and two others of comparable size planned for other parts of the state – could not come at a worse time for the overheated construction market in Eastern Massachusetts.
Instead of priming the pump, the planned Boston-area mega casino may very well burst it, pushing the already considerable cost of building new offices, apartments and condos even higher.
“I would say it will definitely stress the market,” said David Begelfer, chief executive of NAIOP Massachusetts, which represents developers across the state. “Labor costs are going to go up.”
Pump Priming Gone Awry
If Massachusetts had gotten its act together and licensed casinos back in 2012, the mega projects might have done some good in a still-recovering market.
While a year sounds fast to review and permit major projects, the Empire State is on its way to doing the job in less than that, having just voted last November to legalize Las Vegas-style gambling. But we just don’t move that fast here in the Bay State, the land of endless nitpicking and project reviews, and now we are paying the price.
The Massachusetts Gaming Control Board is on track to pick a winner this September for the Boston-area casino license, with both proposals looking downright massive. Las Vegas casino mogul Steve Wynn wants to build a $1.6 billion gambling palace on the banks of the Mystic River in Everett, while Mohegan Sun has countered with a proposed $1.3 billion casino in Revere.
But times have changed. The casino stimulus, which would have been welcome three years ago, comes as private sector developers struggle in an ever-tighter labor market to drum up the skilled workers needed to get the job done.
Overall, construction prices have been on a tear, rising 15 to 20 percent in the Boston area after hitting bottom in the aftermath of the downturn, notes James Kirby, president of Boston-based Commercial Construction Consulting, which estimates project costs. Prices rose 8 percent last year alone, he said.
“I don’t think we need a primer for the pump right now,” he said.
Let’s not forget, either, that another ill-timed pump-priming project is also slated to get under way in the next couple of years, the $1 billion expansion of the South Boston Convention & Exhibition Center.
“It could raise the cost of everything,” Begelfer said of the pending casino boom.
No Ordinary Mega Projects
Yet the impact may be even great than that. Simply put, these are no ordinary, billion-dollar projects – OK, not that any billion dollar project is “ordinary” – slated to take shape over a couple of phases spread out over several years. Rather, whoever wins the Boston-area casino sweepstakes will be under the gun to get built and get open in one fell swoop, the faster the better, as far as cash-strapped state officials are concerned.
We are talking about a two, maybe three-year build-out that will suck thousands of union hard-hats out of the local economy, all at a time when we are fast closing in on full employment in the trades. The Wynn numbers are particularly astounding. The world’s best-known casino operator boasts that his Everett project will employ 14,300 union hard hats.
Moreover, the Massachusetts casino bill was written with a bid to boosting local employment, so construction managers, no matter how tight the market is, must recruit locally.
By way of comparison, state officials were boasting of the 2,000 construction jobs the Fan Pier development would create as that long-awaited project got underway in 2011. But back then, the construction market needed a boost. Now it just needs some sanity, which an orgy of ill-timed casino construction is unlikely to provide.
Email: sbvanvoorhis@hotmail.com
