Making MGM Springfield happen; Dinner with Isaacs

MGM Springfield is shaping up as the most architecturally interesting casino project not only in Massachusetts but the nation as a whole, a charming mix of the new and the old. The company had been planning a few nods to Springfield‘s past, preserving the front section of the local armory (the Massachusetts Gaming Commission would like to see the whole building saved). In a similar compromise, MGM intended to keep the facade of the United Electric Co. building, but has been persuaded to recreate its beautifully designed lobby elsewhere on the property. (Currently it’s where the elevator bay would be.) In a more incongruous development, the exquisite First Spiritualist Church will be preserved and moved elsewhere on the MGM campus — though it’s hard to figure what a casino company will do with a church.

Preservationists would like to see the terra cotta facade of the Edisonia MGM Springfield paintingTheatre, home to one of America’s first cinemas, kept. They’re also trying to persuade the casino giant to not tear down the Union House hotel but restore it to that use. Considering that the building is so old it hosted President James K. Polk, this may be wishful thinking, although two facades will be retained. MGM has, however, reversed field and agreed to incorporate the facade of the State Building. Said project designer Steve Newbold, “The strategy here is seeing what we can do with the facade. Structurally it is in pretty good shape. What we’re looking to do is take the first bay of the building and build the hotel behind it. We believe we’ll be able to keep the facade and use the windows to look into the food court. It all seems doable.”

MGM Springfield detailAs for the Edisonia, Newbold is less compromise-prone: “What we’d like to do is take the same rhythm of the building, and replicate it with the residential building there. To take the spacing, scale and rhythm of it and incorporate it into the new building.” The MGC would like to see the facades of the Turnverein building and the Western Massachusetts Correctional Alcohol Center saved, too, but MGM isn’t giving ground. (Why, with the megaresorts’ economic prospects getting top marks from MGC Chairman Stephen Crosby?)

MGC member James McHugh, sounding like Jim Murren himself, studied the design and concluded, “Rather than being a singular, large scale, MGM Springfield 3internally focused container, MGM Springfield – especially on the site’s Main Street side – can be credited for being an assemblage of smaller elements, each with its own entrance and character, with transparent street fronts through which pedestrians can view the project’s internal activities.” He also noted that casino-hotel was modeled after MGM Grand Detroit … high praise indeed.

Complaints were few, such as an insufficiency of parking, lack of energy-efficient slot machines and not enough clean-energy technology. The company got high marks for dotting its i’s and crossing its t’s in the zoning/permitting department. The MGC voted unanimously to approve MGM, pending the acceptance of certain conditions.

MGM, understandably, doesn’t want to pay its $85 million license fee while the future of casino gambling in Massachusetts is still hanging fire in the courts and at the ballot box. For that reasonable reason, the MGC will hold off the actual license award until the matter has been fully litigated.

(Money quote: “The project is ambitious, innovative, and exciting, in the context of a city shrewdly and comprehensively attempting to renew its economic, social, and cultural health.” — Crosby)

Guess who’s coming to dinner? In the case of J.P. Morgan analysts, it was brand-new Scientific Games CEO Gavin Isaacs. He said he’s going GavinIsaacsto spend the next three months developing a new strategy for the company. Isaacs chalked up his early return to the industry to being let out of his SHFL Entertainment non-compete agreement and wanting to work.

While one person of course cannot be a panacea for tough industry fundamentals,” wrote Brian Mullan, “and the stock will ultimately trade where the numbers dictate, we do believe the creditability provided by the change will prove to be important …  Isaacs acknowledged the current challenges facing the industry but also expressed confidence that SGMS can improve the positioning of its gaming segment even in the face of those challenges.”

One of those challenges is a replacement cycle that’s 48% below last year’s levels. However, a spate of lottery contracts are coming up for renewal and Scientific will be keeping a close eye on that. At present, it’s bidding on the Turkish National Lottery, with a view to be a ticket and equipment supplier, not an equity partner.

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