MGM Springfield Employs Local Businesses to Help Build Casino
Work in Progress
With construction on the MGM Springfield casino underway, plenty of local businesses — 40 to 50 over the next six to nine months — will have worked on the project in its first phase. But that’s just the beginning, say city and regional business leaders, who say MGM has forged a number of strategic partnerships to ensure that even more area companies — those in construction, but also providers of myriad other services — benefit from this $900 million effort.
Construction is moving forward on the 14.5-acre MGM Springfield site between Union and State streets and Columbus Avenue and Main Street.
About 70% of the footprint for the garage, casino, hotel, and outdoor space has been cleared, and about 45 local and non-regional companies have been employed during the process.
Work to compact the ground and get it ready for the garage, which will be the first structure built, is taking place now. Demolition is also still occurring in the area where the casino and hotel will be built, and on April 19 the First Spiritualist Church was moved 600 feet from its former home on 33-37 Bliss St. in preparation for placing it on a new foundation.
Brian Packer, MGM’s vice president of construction, told BusinessWest that one building and the rear portion of the State Armory still need to be knocked down. In addition, the rear of two structures, 73 State St. and the Union Chandler Hotel, whose historic front facades will be preserved, also still need to be demolished once the facades are secured and braced.
“We are encouraged by the tremendous progress MGM Springfield has made over the last several months. As we begin the next phase of construction, our outreach efforts will focus on electrical, mechanical, and drywall,” he said. “We anticipate announcing dates for information sessions soon for union companies interested in these jobs. MGM Springfield continues to support the involvement of local businesses — and minority-, woman-, and veteran-owned businesses — and we encourage these companies to participate in the process.”
Eric Nelson, vice president and project executive for Tishman Construction Corp., the general contractor overseeing the MGM build, said a concerted effort has been made to hire as many local subcontractors as possible in keeping with the project labor agreement, and they will continue to hire firms over the next 12 months.
“A significant amount of the work has gone to firms in Springfield and the surrounding communities,” he said.
Local businesses benefiting from the trickle-down effect include American Environmental Inc., a minority-owned Holyoke business which did a significant amount of abatement and some demolition; Ultimate Abatement, a woman-owned firm in Springfield, which received a large contract to do abatement on the former YWCA building; Gagliarducci Construction Inc., which handled site work; and New England Blue Print Paper in Springfield, which has contributed printing and copying services.
Within the next six to nine months, Packer said, 40 to 50 local companies will have worked on the project, and the majority are in Springfield.
Gerry Gagliarducci, owner of Gagliarducci Construction Inc., said he has had a crew on site since last year. The company has done exploratory work for underground utilities, screened excavated materials for reuse on the site, and, most recently, conducted preparations needed to move the church.
“We’ve enjoyed our relationship with MGM and Tishman Construction. This project is a big boost to the local economy and carries down to all areas of business, including fuel for vehicles, lunches, and major expenditures,” he noted, adding that workers with good-paying jobs may buy new automobiles or make other major purchases.
Work for local firms has come about in part because MGM has been reaching out to the business community for several years to initiate strategic partnerships and discussions. They also participate in events such as the annual Western Mass. Business Expo, staged by BusinessWest, and have held informational sessions for contractors, which will continue before substantial work comes up for bid.
Local providers have also benefited. They include Caring Health in Springfield, which won the bid for the drug-testing portion of the contract and has tested every construction employee on the site, as well as Arrow Security Co. Inc., which has provided security services for the property since the construction began.
“The project has definitely been beneficial to us,” said Arrow CEO John DeBarge. “Prior to the recession, 10% of our business was new construction. It went to 0%, and MGM is the first substantial project we’ve obtained, which helps our business and our employees. We’ve hired a number of new employees who are Springfield residents.”
At this point, the abatement and demolition is almost complete, site work is starting, and construction of the framework is expected to begin in the fall.
Jeffrey Ciuffreda, president of the Springfield Regional Chamber, said his organization has an excellent relationship with MGM, and is working closely with the company to make sure local businesses benefit not only during the building process, but once the casino is operational.
He noted that MGM’s agreement with the city of Springfield includes spending $50 million annually on local goods and services after it opens, but said the word ‘local’ is relative, and includes Hampden, Hampshire, Franklin, and Berkshire counties.
So far, MGM has carried out its end of the contract and joined with the Springfield Regional Chamber to host two supplier and vendor fairs attended by its former vice president of global procurement, who came from Las Vegas to highlight opportunities for local businesses and provide strategies and insights for doing business with the casino. A vendor fair was also staged in Holyoke in conjunction with the Greater Holyoke Chamber of Commerce.
Businesses doing construction work have to be unionized, but suppliers and service providers do not when the project opens. However, they do have to be registered with the Mass. Gaming Commission.
Click HERE to download a chart of the region’s General Contractors
Companies hired so far tout the benefits of the project to the regional economy. They include American Environmental Inc., which has done a significant amount of work on the project. It won the first abatement contract, has been working for MGM since last March, and since that time has been awarded a half-dozen additional abatement contracts and an equal number of structural take-down contracts that have included demolishing the former YWCA on Howard Street, which dated back to the 1900s and most recently housed the Western Massachusetts Alcohol Treatment Center; the former St. Joseph Rectory on Howard Street; and the Springfield Rescue Mission on Bliss Street, which relocated to the former Orr Cadillac building on Mill Street, which the casino resort provided in exchange for the mission’s former property.
“It’s been a wonderful foundation project for the entire calendar year,” said Tom MacQueen, American Environmental’s general manager, adding that area employees appreciate having steady work close to home and MGM has done a great job identifying qualified, local contractors.
In addition, American Environmental has been introduced to new contractors on the site and made arrangements to work with them in the future, which is an extra benefit of working on the project.
T&M Equipment Corp. in Springfield is another local company benefiting from the ripple effect. The union-affiliated contractor was hired to do excavation work for the garage and hotel and has been on site for about a month.
“This is great for local companies, and we are excited to work with MGM and be part of history in Springfield,” said Project Manager Taylor Wright. “This site is really large and will not only bring more work to area companies, but will allow more people to be employed from local unions.”
MGM is working to increase union construction workforce opportunities, and has convened a Community Partners Network, which has grown from nine to 21 members. The network holds biweekly meetings to identify ways to recruit diverse populations that meet union requirements and are ready to join a union or a union joint apprenticeship and training committee, and also recruit people who may not meet union requirements and need supportive services and soft-skills training.
MGM has also met with a number of trade unions to share construction timelines, potential partnerships, and other issues pertinent to hiring. They include the Carpenters Union #108; the Painters & Allied Traders Council #35; Ironworkers Local #7; and a bevy of other groups. In addition, a construction diversity task force has been formed.
Outreach continues, and MGM Springfield and Tishman are exploring the possibility of developing an ongoing partnership with Putnam Vocational Academy students interested in joining unions and working on the Springfield job site.
The Springfield Regional Chamber created a list of members for MGM that could do construction-related work, and goals have been established by the Mass. Gaming Commission for doing business with certified minority-, woman-, and veteran-owned companies.
Ciuffreda has also told MGM about local companies that manufacture windows and other supplies that will be needed during construction, and said officials have expressed real interest in them.
“The door was open early on, and although we can’t offer our members any guarantees, as the construction unfolds we will make sure that MGM’s list continues to be updated,” he told BusinessWest, adding that MGM has divided chamber members into categories and given the list to contractors, who are encouraged to use local suppliers.
“We’ve told our members that MGM is a world-class organization and is big on quality, quantity, and cost,” Ciuffreda noted, adding that some local firms may be too small to be competitive in terms of pricing or unable to produce the large number of items needed.
However, the chamber has filed a grant request with the Gaming Commission that would allow it to provide technical assistance to businesses. Funds will be targeted toward minority-, woman-, and veteran-owned firms that wish to do business with the casino.
MGM’s future needs will be seemingly endless, and goods and services needed will range from security to special hardware, signage, exterminators, alcoholic beverages — the casino has already agreed to work with local craft-beer producers — to food, which Ciuffreda said could be supplied by farmers in the Pioneer Valley. Other non-gaming vendors will include linen suppliers, garbage handlers, and limousine service companies. However, the majority of those firms won’t be hired for more than a year from now, when advertisements and meetings will provide interested businesses with the information they need.
“We are on track for the September 2018 opening and are excited to share in the economic growth,” said Seth Stratton, vice president and general counsel for MGM Springfield. “The silver lining is that there is still plenty of time for businesses to ramp up or start with us, and as we get closer to the opening, we will step up our own processes and procedures to formally do outreach with the business community so we can spend the amount of money we have agreed to in our contract.”
Ciuffreda said MGM will do well because it is a behemoth with an established history, but its future success will be measured by the impact it has on local companies. At this point, MGM is doing everything it promised, he noted, but the chamber will continue its quest to make sure its members benefit from the spinoff.
For example, the chamber has a 100-page document listing items that MGM Detroit purchases, and Ciuffreda intends to sit down with officials and find out what is procured from national companies and what could be supplied locally to fulfill the $50 million annual agreement as things move forward.
“We won’t leave any rocks unturned,” he told BusinessWest. “The trickle-down effect is not only going to happen, it’s happening right now and will continue to grow.”