MGM sends emissary to Springfield; Florida tribe takes a loss

Undoubtedly realizing that it laid a public-relations egg with its scaled-down redesign of MGM Springfield, parent company MGM HornbuckleResorts International is sending President William Hornbuckle to Springfield to mend fences with Mayor Domenic Sarno. Actually, Sarno has been in MGM’s corner from the get-go. It’s the city council and its constituents that Hornbuckle needs to mollify. (While he’s there, Hornbuckle might ask project president Michael Mathis why costs are “skyrocketing” in an economically depressed area.)

Well, not needs, since the council made a complete hash of its attempt to obtain a referendum on MGM’s proposed changes. It missed the September 29 deadline for filing a ballot question which would have read, “Do you support an amendment to the Host Community Agreement between MGM Springfield and the City of Springfield, previously approved by a referendum vote, which would eliminate the high-rise glass hotel … and which would make other changes to the development site?

MGM at least has a supporter in the Ron Chimellis of the Springfield Republican, who cast aspersions on the council’s motives, calling the attempted referendum “another, last-ditch MGM Springfield detailchance for sore losers to challenge the casino’s arrival. If a question had made the ballot, its dry description of hotel design would not have reflected the true motives behind it. Between the lines would have furtively been the real question: do you trust these casino guys or not?”

Some distrust may be in order, as Mathis continues to be vague about what caused MGM Springfield’s probable cost to escalate to over $900 million, according to Massachusetts Gaming Commission estimates. For at least part of the answer, we have to look to the Wall Street Journal, which reported that the cost of those glass curtain walls of which MGM is so fond has risen 30%

This updated rendering released in September 2015 shows MGM Springfield's scaled back hotel plan, which no longer includes a 25-story glass tower to accompany the 14.5 acre development. MGM Springfield rendering via Masslive.com

over the last year and a half. The initial budget was also predicated on a 2016 opening, so MGM’s postponement to 2018 is proving literally costly. Also, the cost of the housing units — an integral part of the original plan — had ballooned to $800,000 each, too rich for MGM’s blood.  The council can still vote on the changes but the realpolitik is they’re probably stuck with them. It would certainly be a test of MGM’s commitment to Springfield if city officials told them to go back to the original drawing board.

In unrelated “casino stuff,” as Massachusetts Gov. Charlie Baker calls it, Suffolk Downs should be absolved from any involvement with mystery developer Eugene McCain‘s pursuit of suffolk downsa slot-parlor license for Revere, where he’s bought a trailer park as a potential site. Downs CEO Chip Tuttle said, “We have been clear that Suffolk Downs has nothing to do with this ballot question and that we will not support it.” His allies against McCain include Penn National Gaming and Wynn Resorts, both of which have filed legal briefs opposing Attorney General Maura Healey‘s approval of the slot-parlor vote. Put another way, if McCain carves a hole through the 2011 casino-enabling legislation, how many other mice will burrow into the cheese?

* A jurisprudential flip-flop that took planned slot machines away from Creek Entertainment Gretna had less to do with Florida bondiAttorney General Pam Bondi‘s legal brilliance than with the changing makeup of the First District Court of Appeal. One of its members retired, was replaced by a Gov. Rick Scott appointee and — voila! — the Poarch Creek Indians were on the losing end of a 2-1 vote, although they vow to take the matter to the state Supreme Court. The ruling may not be enough to stem a jailbreak of slot machines in the Sunshine State: Five counties are slated to vote on legalizing them.

* Even though Indian Country casinos represent a $29 billion/year industry, Wall Street generally doesn’t like the risk/reward equation. Och-Ziff Capital Management has been getting rich on investment in tribal gaming — albeit at usurious terms for the tribes involved.

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