Cover Story

Odds Makers

The Prospects for a Casino in Western Mass.
February 4, 2008 Cover

February 4, 2008 Cover

Many casino proponents say that when it comes to legalized gambling in the Commonwealth, the question isn’t if it will gain the blessing of the Legislature, but when. Some lawmakers may not agree, but there is mounting evidence that the pendulum has swung in support of casinos. While that debate continues, focus turns to the next matter involving this high-stakes issue — where to put them. At the moment, a plan for a hilltop facility in Palmer seems to have considerable momentum.

‘Inevitable’ is one of those words that doesn’t need an accompanying adjective or adverb, but Peter Dragone added one — ‘absolutely’ — just for effect.

He did so when asked about the prospects for legalized gambling in the Bay State, a subject he’s been involved with for roughly three decades, starting with a plan to put a hotel and gaming facility on Mount Greylock in Berkshire County. There have been other initiatives since, ventures that have made Dragone, a Longmeadow resident, real estate appraiser, and consultant on casinos, one of the foremost authorities on that still-controversial subject, and now part of a group trying to place one on a 150-acre parcel it owns just off exit 8 of the Turnpike in Palmer.

Using a tone brimming with confidence, he said he believes that it’s no longer a question of if the legislature will make casino gambling legal, but when — and he thinks the answer is ‘soon,’ perhaps this year. There are many reasons for this, he said, including growing support among state residents for legalized gambling; similar support from institutions like the Boston Globe, which has historically opposed casinos; critical need for new sources of revenues for the state that do not include tax hikes (the governor has actually taken the bold step of including casino revenues in his FY ’09 budget — more on that later); and, perhaps most importantly, the fact that casino gambling is already a fact of life for many living in the Bay State, as evidenced by how many trips they make to Foxwoods, Mohegan Sun, and other Northeast facilities on an annual basis.

Summing things up, Dragone, in a recent interview with BusinessWest, said “there are already casinos in Massachusetts — they just happen to be in Connecticut.

“It’s an industry that’s already here,” he continued. “The problem is, the tax revenue is going elsewhere.”

Changing that equation and developing casinos within the confines of the Commonwealth is a multi-step process that begins with the Legislature, said Dragone, noting that he and many others, while certainly not looking past this hurdle, despite that aforementioned confidence, are already focused on that next step — the matter of where to locate said casinos.

And he’s already rolled the dice in this regard, with a pretty substantial bet.

Indeed, Dragone is lead partner with the Northeast Group, which owns the Palmer property as well as a 35-acre waterfront site in New Bedford also proposed for a casino. The former is considered the casino site with the most momentum at this date and time. It has caught the attention of Mohegan Gambling LLC, operators of Mohegan Sun, who late last month presented preliminary plans for what is being called Mohegan Sun Palmer, a $1 billion entertainment/gaming facility that would feature a 164,000-square-foot casino, a 600-room hotel, 12 restaurants and food venues, and 100,000 square feet of retail space.

Paul Brody, Mohegan Gambling’s vice president of development, gave a lengthy presentation that touched on everything from traffic to table games; employment opportunities (3,000 of them) to the projected impact on area businesses.

Using what’s happened in Connecticut as a predictor of what can happen in Palmer — and with other casinos in the Bay State — Brody said the state can expect good-paying jobs, heavy spending on the part of casinos with locally owned businesses, and a manageable amount of problem gamblers.

All this was outlined in a PowerPoint presentation that noted, among other things, that Connecticut’s two casinos are now among the five largest employers in the state, that last year, the Mohegan tribe provided the state of Connecticut with $223 million in revenue ($4 billion since it opened), and that the planned Palmer casino will create 1,500 construction jobs in addition to the 3,000 permanent jobs, Such numbers will be just part of the equation for making a casino in Palmer a reality. Gov. Deval Patrick’s casino plan calls for three resort-style casinos to be located in a manner that would spread the wealth to all portions of the state, including Western Mass. But, for the purposes of this exercise, the governor is including Worcester County in Western Mass.

The myriad matters impacting the ‘if,’ ‘when,’ ‘how,’ ‘where,’ and other questions concerning casinos has fueled considerable speculation — as well as plenty of work for lobbyists. Bill Cass, with the Boston-based Suffolk Group, is one of them. He told BusinessWest that his assignment is to promote Northeast’s interests, and this includes work to sell the Palmer location as a logical site with benefits for both Western Mass. and the state as a whole.

“I’m confident that if legislation passes, this land would be part of a successful development, due in large part to its attractive location,” he said. “I’m on the Hill to make sure the legislation is fair and that it allows the Northeast Group to compete based on the merits of this site.”

The $64,000 question, however, said Cass, is whether the Legislature will vote on casinos this year or sometime soon and, if so, whether Dragone and others are correct when they use that word ‘inevitable.’

“And if someone tells you with a great degree of certainty that they know what’s going to happen,” he said, “they probably don’t know what’s going to happen, because no one knows.”

Doubling Down

Jeff Ciuffreda has heard the ‘when, not if’ argument with regard to casinos. He puts some stock in it, but certainly isn’t ready to place any odds on whether a casino vote is imminent or how one may wind up.

As vice president of Government Affairs for the Affiliated Chambers of Commerce of Greater Springfield, he keeps his ear to the ground on the matter. He told BusinessWest that casinos have not been a direct subject of most conversations he’s had with legislators, but they have certainly been a background topic and, in many respects, the elephant in the room.

He’s also talked with some developers, whom, he said, are of course interested in coming to the Bay State, but have questions about how many casinos may be developed and what impact these numbers may have on revenues and developers’ ability to recover licensing fees that will run in the hundreds of millions of dollars.

With regard to a vote, he said the outcome will likely be swayed by House and Senate leadership, which still includes proponents and opponents, the latter list including state Rep. Daniel Bosley, a democrat representing the First Berkshire District and current chairman of the Economic Development Committee.

“I think you see a lot of people (legislators) out here who are not really passionate about it one way or the other, and are likely to follow leadership closely,” said Ciuffreda, noting that some in those posts do support gambling, while others don’t, and many are not pleased that the governor went against their wishes and included casino revenues in the budget.

Ciuffreda said there is talk of only a few sites in Western Mass. as potential locations for casinos, and as far as some parcels are concerned, it is simply talk.

Donald Trump is rumored to have some interest in the Holyoke Mall, he said, adding that the facility has been for sale for some time, and that the casino talk is a “stretch” that has probably resulted “from someone putting two and two together,” with regard to location, accessibility, and possible conversion to gaming resort. Meanwhile, Chicopee Mayor Michael Bissonnette is keeping his options open on a 100-acre parcel located between the Turnpike and the end of the runway at Westover Air Reserve Base. That site is landlocked, said Ciuffreda, and has other challenges beyond access, including multiple owners and strong interest from Westover Metropolitan Development Corp.

“From everything I’ve heard thus far,” he said, “Palmer is considered the Western Mass. site.”

The ACCGS has taken no official stance on casinos and probably won’t, at least for the foreseeable future, said Ciuffreda, noting quickly that it has taken part in meetings where questions have been asked about the impact such a facility would have on small businesses, wages, workforce quantity and quality, and other matters.

“There’s still a lot of questions out there, from developers, legislators, and mayors, and a lot of moving parts to this,” he said, adding that when it comes to casinos and their overall impact, “the devil is in the details.”

Some of those details, at least as Mohegan Gambling LLC sees them, were put on the table in Palmer on Jan. 22, when Brody and other representatives of the corporation gave a lengthy presentation before the Palmer Citizen Casino Impact Study Committee.

The well-attended session was significant in that it represented, for the first time in anyone’s knowledge, the first time a casino-development group had actually laid out a plan, with specifics on everything from the number of table games and slot machines (150 and 4,000, respectively) to plans for traffic control, including a flyover that would take vehicles off the Turnpike and directly onto the casino property without clogging local roads.

The package of proposed attractions for the Palmer site — which go well beyond gambling — and the remote location combine to give this plan the look and feel of what is being called the ‘casino in the woods,’ said Dragone, which is emerging as the preferred venue for Massachusetts, especially in the wake of the mostly positive developments in Connecticut and the opposite trend in Atlantic City.

“What occurred there — and a lot of it had to do with the state not doing what it said it was going to do — shaped some opinions about casinos here,” he explained, noting that monies that were supposed to go toward revitalizing Atlantic City went instead to plug budgetary holes elsewhere. “A lot of people saw what was happening — or not happening — in Atlantic City, and envisioned that happening here.”

There have been far fewer problems in Connecticut, he continued, and the familiarity that many Bay State residents have with the casinos there has played a huge role in creating what he called a “sea change” in attitudes about legalized gambling.

“There’s a very positive feeling about the existence of those casinos in the woods,” he explained. “Their impact has been overwhelmingly positive in the state of Connecticut, with regard to everything from jobs to revenue for the state — and this has changed the way many people think about gambling in this state.

“And that’s one of the big reasons why the Palmer location works in the minds and eyes of many decision makers and the people themselves,” he continued. “It embodies the spirit of the ‘casino in the woods.’”

Dicey Situation

There has been interest in the Palmer site as home for a casino for more than a decade now, said Dragone, noting that there have been other plans forwarded that fall into the category of ‘destination’ venue. Bass Pro Shops was interested in the site as a possible location for a large-scale location in the Bay State before it eventually settled on becoming part of a large-scale retail/entertainment complex being created by the Kraft family, owners of the New England Patriots, adjacent to the team’s stadium in Foxboro.

Dragone first toured the Palmer parcel, located on a hill off Route 32, in the mid-’90s, and came away impressed with its potential as a development site for a casino or other venue. He acquired an option on the land in 1996 and, along with several other investors, acquired the property in 2006. (Northeast recently acquired site control of an additional 80 acres adjacent to the proposed site.)

Dragone believes Palmer represents the most logical of the Western Mass. sites for a casino, and perhaps the best option for spreading the gaming wealth to the Pioneer Valley. Peter A. Picknelly, third-generation president of Peter Pan Bus Lines in Springfield, agrees.

A partner in the Northeast Group along with his brother, Paul, he acknowledged that his interest stems in part from the vast potential growth of an already lucrative business taking individuals and groups to and from casinos in the Northeast; he didn’t have a specific number concerning passenger volume to Foxwoods, Mohegan Sun, Turning Stone resort in New York, and other venues, but said it is significant.

But he noted that scores of other businesses across many different sectors would also benefit, and that he is committed to seeing Western Mass. get its slice of any casino pie.

Picknelly told BusinessWest that he and others believe that casinos in the Eastern part of the state would, because of their convenience, draw visitors from that part of the Commonwealth, as well as Rhode Island and Southern New Hampshire. The Palmer facility, meanwhile, would draw residents from the four counties of Western Mass., Northern Conn., Eastern New York, and perhaps from Worcester County.

This traffic pattern holds some theoretical benefits for Springfield and other Pioneer Valley communities, he explained.

“I think restaurants in Springfield will benefit,” he said. “And attractions like the Basketball Hall of Fame will benefit as well. If even a small percentage of those traveling to the casinos get off the highway and visit venues like that, there will be a very real impact.

“I have no doubt that the projects in Palmer and New Bedford will spur economic development and other significant private investments in regions that are currently economically distressed,” he continued, adding that he’s seen it happen in Connecticut, where unemployment rates are so low Peter Pan struggles to find drivers and other employees. “If gaming is legalized, I think Western Mass. ought to be a beneficiary, and I’m convinced that Palmer offers the best site for development.”

Cass, a former legislator with a diverse lobbying portfolio, said he, like Dragone, believes legalized gambling is inevitable in the Bay State, but the ‘when’ part is still a matter of conjecture.

The governor has certainly upped the ante, he said, borrowing a phrase from the industry, by including casino revenues in his budget for the fiscal year that will start on July 1.

“This is a significant development that could play out a number of different ways, and I don’t have a crystal ball,” he said, noting that if the House, which gets the appropriations bill first, takes the casino revenue out of the budget, the Senate could put it back in. The matter would then go to a conference committee, where anything could happen.

Dragone believes the Legislature will legalize gambling, in large part because it can’t afford not to, given the number of players already in business in New York and New England, and the potential for more in the years to come, in the same way that state lotteries have proliferated and enjoyed explosive growth.

“The lottery started in New Hampshire and then spread through New England and westward — it was like a domino effect,” he explained. “And table games and slot machines are following that same path. Today, New Hampshire is making a push to put an installation in Rockingham Park on our northern border; you have a slot casino in Bangor, Maine and other initiatives that will bring it to the south counties of that state; there are casinos and slots on our western frontier, in Saratoga, N.Y., for example, and you have the equivalent of a casino in Newport, R.I., and the world’s two largest gaming reports in Connecticut.

“So there are a number of border wars going on already,” he continued, noting that millions of Masachusetts residents are crossing state lines
o gamble, taking untold revenues with them.

Of Wages and Wagers

Dragone acknowledged that he and his partners have taken a fairly substantial gamble on casinos, and specifically the Palmer site, given the Legislature’s track record on legalized gambling.

But he believes the odds are now heavily stacked in his favor, given not only the growing sentiment in favor of gambling — from the governor to the Globe to state residents — but also the many factors that point toward Palmer as a logical choice for a destination venue.

Time will tell, but in looking at all the cards currently on the table, Dragone thinks he’s made a fairly safe bet.

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

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