The Race to Pick MGM’s Pockets
As the process for awarding the only Western Mass. casino license moves into its final, critical stages, there is an interesting subplot emerging — area communities trying to swing generous deals from the presumptive winner of that contest, MGM Resorts International.
Many communities have already negotiated what are known as ‘surrounding-community mitigation agreements’ with the casino operator, winning both upfront payments and yearly awards, with both averaging something close to $100,000 per community. Holyoke, for example, recently struck an accord that calls for $50,000 upfront and an additional $1.275 million over the next 15 years, or $85,000 annually. Some cities and towns have negotiated more, others less.
Holyoke isn’t an abutter, and isn’t likely to be impacted much by the casino, but these payments essentially amount to compensation for having a casino in the same county, and many other communities have shamefully followed suit. MGM, understandably, has seemed more than willing to strike such deals, on the premise that they are a cost of doing business. Extracting dollars from MGM, or any other business for that matter, however, sets the wrong tone for doing business in the state.
Where things get interesting is with two communities — Longmeadow and Northampton — that are seeking large amounts of cash (or likely will). Longmeadow, one of the most prosperous towns in the Commonwealth, fears its community will be adversely affected by traffic to and from the South End casino, and is seeking $1 million upfront, followed by annual payments of $500,000, along with annual escalators. We hope MGM tells them enough is enough.
What will Longmeadow do with that money ? Widen Route 5? Build a flyover? Put in a monorail? No. It’s probably going to get a new fire truck or new snow-clearing equipment, acquisitions that won’t improve the commute from downtown Springfield. So what’s the point, other than to extort money from MGM, which seems to be the new parlor game?
Northampton, meanwhile, hasn’t specified an amount, but a petition submitted by the community after it failed to reach a settlement with MGM anticipates “grave and substantial impact on finances and local businesses due to the erosion of its status as the sole destination market in the Pioneer Valley.” In other words, officials and business owners in Paradise City fear that individuals and groups will choose the casino and its various attractions rather than their community’s restaurants, clubs, and cultural attractions.
Is this a logical fear? Is someone who frequently attends the Paradise City Arts Festival or the Iron Horse Music Hall going to ditch that in favor of a day at the slots or roulette wheel? Of course not. And if they do, so what? Isn’t that the way free enterprise is supposed to work? Yes, the casino will have shows, but those shows would likely not have come to Northampton.
It’s a ‘let’s get ours’ mentality, and even remote Hampden, three towns away from Springfield, is thinking about seeking some compensation. Who’s next, Goshen? West Brookfield? Why stop there? This sentiment is poisonous to all businesses, especially the ones thinking about locating here.
Indeed, while many are still wary about a casino and its potential impact on Springfield and surrounding communities, they should be more wary of a casino that opens and then struggles — or, far worse, fails.
A Western Mass. casino will face a number of challenges, including a still-tepid economy and intense competition from casinos in this state and others. MGM doesn’t need to be further challenged by unreasonable requests for compensation from area communities, many of which will not be directly impacted by the gaming complex.
Instead of trying to pick MGM’s pockets, area communities should be trying to work with the company to make sure that this nearly $1 billion project is one that starts strong and builds momentum. If that happens, maybe then nearby cities and towns, which will have a better understanding of the casino’s impact, can share in the wealth that resorts like MGM bring.