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The Casino Era

As August 24 Looms, MGM Enters a Frenzied Home Stretch

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Alex Dixon stands just outside the entrance to the hotel at MGM Springfield
The Casino Era

The Final Countdown

Alex Dixon stands just outside the entrance to the hotel at MGM Springfield

Alex Dixon stands just outside the entrance to the hotel at MGM Springfield, which is nearly ready for prime time and the Aug. 24 opening.

The almost decade-long process of opening the state’s first resort casino is entering its final days. There is a beehive of activity in Springfield’s South End, and that represents only what people can actually see. The process of not only opening the facility on schedule, but “making this place special,” as General Manager Alex Dixon described it, is humbling and exhilarating at the same time.

12,704.

That’s how many “discrete tasks” Alex Dixon said he and the ever-growing team at MGM Springfield must complete before the $950 million facility can open its doors to the public at 11 a.m. on Aug. 24.

12,704!

Not ‘more than 12,000.’ Not ‘12,700 or so.’

12,704. And you thought you had a lot of lines on your ‘to-do’ list.

“And those are just the things we thought about as we put together our critical paths,” said Dixon, general manager of MGM Springfield, who managed to find a few moments to speak with BusinessWest late last month (and he had to work hard at it). He couldn’t say how many of those tasks he and his team had drawn a proverbial line through, but he hinted strongly that, while considerable progress has been made, there were still quite a few (thousand) to go.

The giant MGM Springfield sign above the massive parking garage

The giant MGM Springfield sign above the massive parking garage is the latest addition to the Springfield skyline.

But he also spoke with the utmost confidence about getting it all done, primarily because of the team that’s been put in place.

“When you think about the breakdown of those numbers, it’s a lot,” he said, putting heavy emphasis on that last word, not that he really needed to. “But we’ve got a great project-management process, we’ve done this before in other jurisdictions, we have a lot of people who are seasoned and know what they’re doing, and we have a very experienced and highly trained management team.”

As for those discrete tasks, they cover 45 different “work streams,” as Dixon called them, and 431 key milestones, many, if not most of them, already met. And they come in every size and shape, from having permits in place for each of the restaurants to meeting the required numbers for each of dozens of categories within the MGM Springfield workforce; from the thousands of items on the construction checklist to making sure the warehouse in Chicopee is stocked with everything it needs to be stocked with.

Overall, Dixon described the process of opening MGM on time — meaning with those 12,704 tasks completed and all licenses and permits and employees in place — as humbling, but also exciting and exhilarating. But he kept stressing that opening the doors on schedule is just one part of the story — and one part of the challenge.

Indeed, he said he’s not losing sleep worrying about getting everything done by Aug. 24. But what does keep him at night — sort of, but not really — are the other two main categories for all those discreet tasks: ‘the things that will make this a great customer experience’ and ‘how do we make this special?’

“We’ll open our doors at 11 o’clock on August 24 — that was never a question,” he explained. “We’re in ‘how do we make this place special?’ mode. We’re going to open, but we’re also going to have a great customer experience. The things that keep me up at night are making sure that we deliver on the promise of a phenomenal entertainment.

“You want to be unique, you want to stand out; I want to compete, and I want to win,” he went on, referring to the considerable competition MGM Springfield will face. “And our team does, too; that’s what motivates me, and it’s what motivates all of us.”

For this issue, one of the last in the pre-MGM era, BusinessWest talked with Dixon about the daunting process of opening the doors, and also about what will happen in Springfield on Aug. 24 and the days to follow.

He couldn’t — or at least he didn’t want to — make projections on how many people will come through the doors on opening day. But he expected the facility to reach full capacity (10,000 people in the casino) and for Springfield to see a day probably unlike any other in its history.

“There has been a tremendous amount of pent-up demand for some time now,” he said, referring to the almost-decade-long task of getting the state’s first resort casino up and running. “We are preparing to make sure that we can do our best to help satiate that demand on opening day.”

Task Masters

As he talked with BusinessWest about these final few days until opening, but also the long, character-building process of getting to this point, Dixon said MGM Springfield has essentially evolved from a startup company with a handful of employees (granted, one with a billion-dollar construction project unfolding around them) into one of the region’s largest employers.

The metamorphosis has come slowly and greatly accelerated over the past several months, to the point where it’s much harder for him to keep track of additions to the staff and putting names with faces. But the culture that was created when the company was a handful of people working on the ninth floor of Monarch Place, and later MGM’s headquarters on State Street, still prevails today.

“You walk through the hall, you meet a new face, and they may not know who you are,” he noted. “So the small things you did at the very beginning to build a great culture with that small group are important; we’re doing our best to make sure we have the right structures and processes in place to ensure that this culture emanates to the 3,000 we’ll be welcoming over the next few weeks.”

Together, this growing team is drawing lines through items on the ‘discrete tasks’ list, dozens, if not hundreds a day, said Dixon, adding, again, that the process of doing so is as exhilarating as it is daunting.

When asked what a typical day is like, he gave the expected answer — there is no such thing, or words to that effect.

But he said there are some common denominators, such as the starting time — 6 a.m. — with a daily briefing from MGM on news stories that impact the company and individual properties across the country.

MGM has made great progress toward completing the 12,704 (and counting)

Alex Dixon says MGM has made great progress toward completing the 12,704 (and counting) tasks needed to get the casino and the rest of the complex open by Aug. 24.

“And as you can imagine, as of late, we’re driving a lot of news, especially with the properties in Las Vegas,” he told BusinessWest. “That’s always a great wake-up call; you read the news locally, but also read the news that’s impacting the business.”

From there, he’s often off to a meeting with one of the many groups he’s involved with within the community, such as the Greater Springfield Convention & Visitors Bureau’s executive committee breakfast session he attended the day he spoke with BusinessWest. He prefers to keep such community work in the morning so as to free up the remaining hours for his day job — or his long-day job, the way things are going.

When he talked with BusinessWest, Dixon referenced hour-long meetings with members of the executive team to address what he called ‘mission-critical items.’ Then, they were meeting three times a week. Soon (if not already), there will be a session a day.

“These are things we need to execute on,” he explained. “And it requires some degree of acceleration or just an intense level of focus to get us over the hump.”

Labor of Love

As an example, he mentioned “fallout” in a particular job category, a situation where the company is struggling to make hires. In such an instance, and there have been some, the team will work closely with the human-resources director and the leader of the department in question to ramp up efforts to address the situation.

Hiring is obviously one huge component of the process of getting things ready for Aug. 24, said Dixon, adding that 3,000 people have to be brought on board across several dozen different positions. But to get to 3,000, MGM actually needs to have a higher number of people in position to be hired, he explained.

“Once you make a job offer, there will be some people who just don’t show up,” he noted, adding that this is a hospitality-industry-wide issue, not something unique to MGM Springfield. “Just because you offer someone a job, they don’t really work until they show up that first day and get into their position.

“That’s the case across the board in many of our front-line positions,” he went on. “So what we’ve done, in some cases, is over-hire to account for some of that attrition, be it in security, beverage servers, or table-games dealers.”

But hiring covers only a portion of those 12,704 discrete tasks, said Dixon, who said they cover three basic “journeys,” as he called them — ‘customer,’ ‘employee,’ and ‘supplier’ — with the ultimate objective of earning an operating certificate from the Mass. Gaming Commission.

To get that certificate, MGM Springfield has a long list of things it has to satisfy in order to show that it is ready to welcome customers safely and appropriately — and also account for the revenue it is expected to generate for the state.

“This is a big business for the Commonwealth,” he explained. “Our regulators are on-site, and we have to satisfy a laundry list of things in order to prove we’re worthy of that operating certificate.”

He offered some examples:

• The casino must make sure the slot machines are “talking” to the central system monitored by the Gaming Commission to ensure the integrity of the games;

• All of the cameras must be approved by the commission to ensure that the operation has the appropriate oversight of the games and other areas within the complex;

• The commission also must approve the internal controls that MGM Springfield operates against so that the operation can be held accountable;

• The commission also makes sure the operation has all the needed licenses from local agencies, for everything from pouring alcohol to serving food; and

• The security plan must be approved to ensure the operation is adequately securing the facility as well as the Commonwealth’s assets.

It’s Getting Real

As opening day draws closer, the team at MGM will take the process of being ready to a different, higher level, said Dixon, referring to what he called ‘play days’ and other types of dress rehearsals for the real thing.

And these auditions will set the stage for what are known as ‘test nights’ (that will be publically announced), during which the operation’s performance will ultimately determine whether the state grants that coveted operating license.

“At those activities, we have to simulate what it is like to operate with real money and be able to perform these functions,” Dixon explained. “The Gaming Commission is assessing our ability to execute those functions in a controlled environment. That’s the big, substantive, last step before we are issued that operating certificate.”

As for what he’s seeing in Springfield now, as opposed to when he arrived 18 months ago, and what he expects to see after the casino opens, Dixon said there has been a metamorphosis there as well, especially when it comes to perceived attitudes about the casino.

“It’s been fascinating to see how things have shifted, from doubt in some cases — ‘is this really going to happen?’ — to ambivalence in other cases, to quietly watching, to trepidation, to what you see now, which is excitement.

“Whether you see people buying their tickets to see Stevie Wonder [who will appear at the MassMutual Center on Sept. 1] to people coaching up a son, daughter, niece, or nephew for an interview, or hearing the excitement of someone getting their first job or getting back into the workforce … it’s fascinating to see the progression.”

Meanwhile, he said that one doesn’t have to wait til Aug. 24 to witness the impact MGM Springfield is already having in Springfield’s downtown.

“If you walk along Main Street around noon, you see the streets teeming with people,” he noted. “They’re well-dressed, new haircuts, looking good, sharp — and friendly. You see the impact of 3,000 people, and we haven’t even onboarded everyone. You see the streets come alive with energy.

“Downtown has been defined by the absence of people after hours,” he went on. “Now, we’ll be defined by the presence of people; and this will be people from Springfield, but also surrounding communities, and people who haven’t been to Springfield in a while. I just can’t wait for people who will walk into our facility and walk into downtown Springfield and have this immense level of pride, not just in MGM, but in the city and the region.”

On Aug. 24, there will be a parade down Main Street an hour or so before the facility officially opens at 11 a.m., he said, adding that it will involve employees, dignitaries, and some entertainers from within the MGM family.

After that? He said National Harbor, the $1.5 billion casino in Maryland that MGM opened roughly 18 months ago, reached full capacity within hours of opening. And MGM is preparing for just such a contingency.

“Knock on wood, we can only hope we’ve got more demand than what we’re able to accommodate in the building,” he said, echoing a belief certainly shared by the city, the region, and the Gaming Commission.

Playing the Numbers

Getting back to his sleeping patterns as Aug. 24 draws closer, Dixon said there are obviously days when he rests better than others.

“The hours are getting shorter,” he said, adding, again, that the ever-growing team working draw lines through those 12,704 discrete tasks are working simultaneously on hundreds on individual assignments, but also the very big picture.

“It’s truly amazing; it takes every individual person on this team to take care of their silo, but also keep their head above water enough to look horizontally and make sure we’re coming together in a cohesive manner.”

It all about the journey, or journeys, Dixon said, adding that the plural is most definitely needed, as they work as a unit toward a common goal — not just opening the doors on time, but making the place special.

And that’s why this process is as exhilarating as it is daunting.

George O’Brien can be reached at [email protected]

Let’s Make a Deal

By
Sections The Casino Era
Local Enterprises Look to Do Business with MGM Springfield

Joe Frigo’s family has done business in the South End of Springfield for 65 years.

“We’ve seen a lot of good and a lot of bad, and the South End is in a bit of a lull right now,” said Frigo, owner of Frigo’s Foods, a restaurant and catering business.

That said, “I’m fully in support of MGM,” he told BusinessWest. “For the last 10 or 15 years, everyone has been saying, ‘we need some type of influx.’ We’re not going to get any type of industry down here at this point, so everyone is leaning toward entertainment, and it’s now in our lap. If we don’t take advantage, it’s going to be a big mistake.”

Frigo is one of a number of South End business owners who welcome MGM Resorts International’s plan to build an $800 million casino in their neighborhood — not just because of the expected street improvements and foot traffic, but because MGM offers an uncommon business opportunity.

“They have made a proposal to us, though nothing is written in stone,” Frigo said. “They did extend an invitation for us to open up a shop within the casino, and still have a store in the South End. Hopefully, we land the deal and make it happen.”

MGM’s host-community agreement with Springfield calls for, among many other concessions, a commitment to spend $50 million per year with local and regional vendors. “That represents about 50% of what we would spend annually,” said Mike Mathis, president and CEO of MGM Springfield.

Some business partnerships are national by nature, he noted. “We have our Coke and Pepsi deals; that’s something we can’t source locally.” But for providers of many other types of goods and services, the casino giant typically makes an effort to strike partnerships in its host communities. “That’s just good business.”

Local vendors run the gamut from food providers to accounting, legal, and engineering services; from office and industrial equipment to building maintenance and facilities; from cleaning to groundskeeping. “We do some of these things in house, but a lot of it is outsourced,” Mathis said. “In each of those categories, there are a host of line items.”

Frigo isn’t the only one who sees growth potential in this local commitment. Brent Bertelli, owner of Langones Florist, also welcomes the MGM development.

“There are opportunities for many businesses thinking outside the box,” he said. “If I were selected as a vendor, naturally, with the size of their resort, it would be a benefit to my bottom line and help me hire more local people, because I’d need extra staff.”

Game Changer

Bertelli said a casino will provide an economic and confidence lift for the entire downtown area. “It’s going to bring a cleaner image back to the South End, and some diversified retail. And, of course, it will lead more people to my front doors; that’s just common sense.

“I have heard they’re really open to using a diverse collection of local business, whether it be a florist or a tuxedo-rental place in the area or a few of the local restaurants,” he added. “But even if I wasn’t a vendor, I’d still get a boost from it, absolutely.”

Jeffrey Cuiffreda, president of the Affiliated Chambers of Commerce of Greater Springfield (ACCGS), has been busy preparing chamber members to interact with casino decision makers.

“We’ve been working with MGM. We worked with all three applicants, actually, but more closely with MGM because they seemed, quite frankly, more outgoing with some of these things,” he said, noting that, in addition to the $50 million commitment, the casino has determined to use the chamber as a vehicle to reach out to businesses.

The ACCGS surveyed its members recently to gauge interest, and about 70 companies responded. “Without a whole lot of information, they were interested in pursuing those options — which range, literally, from sharpening knives to producing the meats and vegetables and the linen services. Conservatively speaking, there are about 60 different categories of goods and services.”

Mathis noted, however, that many local vendors will have to engage in capacity-building efforts to do business with MGM.

“As part of that, we’ve reached out to the Affiliated Chambers and the local chambers, and we’ve reached out regionally to the four counties, working with different organizations to assess the market.

“In addition, we’ll bring our procurement department out from Las Vegas and walk [businesses] through the different products and services we need, get them enrolled in the system, get them pre-qualified,” he added. “We want to make sure they understand we’re a Fortune 500 company with different requirements, compounded by the fact that we’re in a heavily regulated industry.”

Indeed, Cuiffreda said, doing business in the gaming industry requires clearing a number of hurdles, and part of his goal in sitting on a state advisory board is to try to minimize the hoops vendors will need to jump through. “The state came out with some draft regulations for procurement, and the chamber commented heavily on that,” he said, noting that some of the requirements are so onerous that many small businesses might not bother to apply.

“MGM is looking for quantity, quality, and price,” he said. “But the state is going to be looking for an awful lot of financial data and information that, quite frankly, could turn some vendors away. We’re hopeful that, when the final regulations come out, they turn out to be more user-friendly.

“We’re a relatively small-market city, and they are obviously a massive business that’s going to require large quantities of goods and services,” Cuiffreda went on. “Our concern is that they do not overlook the smaller businesses here.”

Ramping Up

Among the small businesses that intrigue MGM are local agricultural enterprises.

“On the food side, we’re really taking advantage of the farm-to-table movement, and we’ve reached out to different vendors in the region, particularly in the Berkshires, for some of the great things they’re doing with local food processing. That’s one area we’re really excited about,” Mathis said.

Cuiffreda said the chamber has already begun connecting companies of all kinds with programs to help them ramp up to do business with MGM.

“We do have concerns that some small businesses out there may not be ready right now — they have a product, but may need some capacity building, may need help with accounting or backroom work or whatever, and they need to comply with some of these regulations.

“The chamber is looking at that as well,” he continued. “If [MGM] needs 10,000 widgets, and someone has a capacity of only 8,000 or 9,000 now, we don’t want to see that contract go elsewhere. We want to work with those businesses. The chamber has some technical assistance programs in place, and we’re doing all we can to help these small businesses that might be a little too small, to get them to where they can get these contracts.”

He doesn’t think 70 is the ceiling on how many local businesses are interested in being MGM vendors, however. “I think a lot more are interested, but it seems to have taken a back burner right now. When it becomes more real and the license is awarded, a lot of people will jump off the sidelines and get involved. But we want to get them involved early.”

Mathis noted that companies that strive to build capacity and meet MGM and state requirements will be better off for the experience no matter how much business they do with the casino. “If you can meet our requirements, you’ll be well-positioned to meet the requirements of other blue-chip companies.”

Frigo is among those who expect to be in that position. “I’ve been to markets in other states that have riverfronts or a Faneuil Hall or market areas, where a well-established business opens in a high-traffic spot with signage saying, ‘visit our main location,’ or ‘this is a flavor of what we have; if you like it, visit our original store,’”  he said.

“I think it’s a way to expand my name to thousands of people coming through the casino every day, and we think that’s a positive thing all around,” Frigo added. “And it’s not just food; if you make pencils or linens, they want to do business with you. If you’ve got the right product and want to do business with MGM, they want to do business with you.”

Joseph Bednar can be reached at [email protected]

Piece of the Pie

By
Sections The Casino Era
Region’s Tradespeople Anticipate Casino Construction Opportunities

Jason Garand

Jason Garand says MGM has a track record of using local labor for its projects, and he expects Springfield to be no exception.

With a membership of 950 carpenters who work in Western Mass., the New England Regional Council of Carpenters Local 108, has, in many ways, its finger on the pulse of the region, said Jason Garand, business manager.

“We do almost all the big work — I would say 99% of the biggest work,” he told BusinessWest. “And this one is going to be the biggest of all.”

He refers, of course, to a plan by MGM Resorts International to develop an $800 million casino in Springfield’s South End, which is awaiting final approval by the Mass. Gaming Commission — and which, if it moves forward, promises to put thousands of the area’s construction tradespeople to work.

“MGM has been, from the beginning, very forthright and open about how they plan to build this,” Garand said. “They have a track record of construction in other states, and in Las Vegas and Atlantic City, where they are committed to all the right things. And not only are they committed, but they’ve done so in writing, with the host-community agreement.”

That agreement, hammered out with Springfield municipal leaders last year, calls for the construction phase of the casino project to incorporate mostly local labor, potentially to the tune of 2,000 construction jobs, followed by 3,000 permanent jobs in the casino once it opens.

“Springfield —  and Holyoke, too —  have higher unemployment than other cities in the state,” Garand said, “so we want to create those jobs right here.”

Jeffrey Ciuffreda, president of the Affiliated Chambers of Commerce of Greater Springfield, praised the way MGM has reached out to the area’s unions, and suggested the project might incorporate a handful of large contractors from the eastern part of the state, but will source most of the subcontracted work locally.

The end result will be an uncommon style of casino, one that will face outward onto the streets of the South End, allowing tourists to enjoy its shops and restaurants without having to navigate through the gaming area or hotel. This design will encourage local business growth (see story, page 19), and link visitors to other Springfield attractions, including the MassMutual Center, Springfield Museums, and Symphony Hall.

“Their model is really unique,” Garand said. “And, if this model works, Springfield will be the first of many projects in the country with this new casino style. For example, they’re not building a convention center of their own; they’re tying it into the MassMutual Center.”

From the start, he said, local labor leaders, contractors, and tradespeople hope that community outreach begins with the construction phase. So far, they like what they’re hearing.

From the Ground Up

The level of expectation varies, however, between individual businesses and niches. For instance, landscape-architecture opportunities might be limited in an urban casino, said Stephen Roberts, president of Stephen A. Roberts Landscape Architecture & Construction in Springfield.

“There might be some exterior construction in regard to pavers and maybe water features, but I don’t see there being a lot of green space available to create pocket parks,” he said. “From the plans I’ve seen, there’s not a whole lot of landscaping — it’s mostly a kind of urban cityscape.”

He said landscape architects, perhaps more than any construction trade, are hurt by the Springfield project’s status as the last proposal standing for the Western Mass. license.

“If there were a casino like the one proposed in Palmer, on a large, open area of land, you’d see better opportunities for landscape architects, for planning, different plantings, and landscape features,” he added. “In Springfield, space is tight; the buildings will take up 90% of the site. I don’t see there being some huge, open landscaping there. I don’t see this as a huge opportunity, but I might be wrong.”

Still, opportunities abound across the construction trades when one considers the sheer scope of the MGM development.

“From the perspective of local contractors, it’s a little problematic,” Garand said. “Even large companies like O’Connell and Fontaine could never do a single project at $400 million, never mind $800 million. This is a monster.”

He said what Baystate Medical Center did recently, with its $250 million ‘Hospital of the Future’ expansion, is a good example for MGM to follow. Even though the main contractor for the 640,000-square-foot project was from the Boston area, Baystate crafted a project labor agreement with local unions to ensure that much of the work would be performed by local talent.

As a result, of some 300 workers on site daily at the project, which wrapped up two years ago, about 70% of them were based in Springfield or the Pioneer Valley. “We’ve been able to keep these jobs,” Stanley Hunter, Baystate’s project executive at the time, told BusinessWest back then. “Especially in these times, we know there’s an interest in keeping work local in such an important project for the area.”

That certainly hasn’t changed with the MGM development.

“There is a fear out there, because contractors here are smaller, that they would come in with basically big contractors from Boston or Eastern Mass., set up, then leave, without much in value locally,” Garand said. “MGM has said, ‘absolutely not; we are going to make sure we get as many contractors from the 413 area code as possible. We are maybe going to chop up some of the contracts, break them up so it’s feasible.’”

That means that, while no company is going to take on an entire $800 million project, a $5 million hotel wing or $50 million in electrical or plumbing work are big prizes in themselves, and there should be plenty of such opportunity to go around.

Holding Pattern

Not only is MGM committing to some 2,000 construction jobs, it will strive to ensure that 35% of those go to Springfield residents, and that no more than 10% of the workforce is made up of people who live outside the Greater Springfield area. In addition, it has set goals of hiring 15.3% minorities, 6.9% women, and 8% veterans on the construction phase.

These goals have produced anticipation in the local construction industry, but the project has also hindered companies in a significant way — by putting many Springfield landlords in a holding pattern.

“So far it’s hurt us,” said Peter Allum, president of McCormick-Allum Co., a Springfield-based HVAC firm. “There are projects that haven’t happened because of what might happen.”

That’s because many downtown Springfield property owners are in a kind of holding pattern, waiting for the casino to become official before making any moves involving their buildings.

“In several cases, landlords have not renovated their buildings because they’re taking a wait-and-see attitude,” said Allum, who recently saw two potential projects downtown pushed to the back burner. “One is a four-story building that needs a new heating system. Depending on the casino outcome, [the owner] might move out. Whether he renovates the space or moves out depends on what happens.”

Still, Garand believes the project is an overall benefit to the region, and his union has already begun to partner with MGM on job fairs and is promoting its apprenticeship program for teens at area vocational schools, so they can find work opportunities right after graduation.

“When Baystate did its $250 million expansion, they had a firm commitment to use a certain percentage of local labor, and they exceeded that number by almost 50%,” Ciuffreda said. “It’s clear from the finished project that the quality of local workmanship is high. I think MGM knows that was the last big building project done in the area, and my sense is, they’re committed to local labor.”

Joseph Bednar can be reached at [email protected]

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