SPRINGFIELD — After a long and arduous competition, Mayor Domenic Sarno chose an $800 million casino plan from MGM Resorts International Tuesday as the city’s candidate for the Western Massachusetts casino license, eliminating a rival proposal from Penn National Gaming.
The mayor’s decision ended months of public lobbying and intense advertising by the gambling giants and came after a long period of parallel negotiations with the two companies.
“We had a unique opportunity to apply leverage and pressure to strike the best deal for Springfield,” Sarno said, speaking to reporters at City Hall.
As part of the deal, the company’s annual payments to the financially struggling city, including taxes and other payments, are expected to top $25 million, if the project is built.
The MGM project, if endorsed by voters in a referendum, will compete with proposals by Mohegan Sun in Palmer and Hard Rock International, for West Springfield. The state gambling commission has the final say over which company will get the state license; that decision is expected by February.
MGM overcame an initial hurdle in a community that has fielded interest from at least four gambling companies.
“Quite simply, we’re ecstatic,” MGM president Bill Hornbuckle said in a conference call with reporters. He said Sarno called him early Tuesday morning with news that MGM had won the city’s competition.
Hornbuckle said the MGM project, planned for a tornado-damaged area in the city’s South End, offered the best package of economic development and jobs to the city.
Having lost out in Springfield, Penn National could become a wildcard in the state’s fledgling gambling industry. A top executive of the wealthy casino operator insisted Tuesday that it was too soon to say whether Penn would emerge in another Massachusetts community, but acknowledged that the company could have interest in Southeastern Massachusetts, which only recently was opened to commercial casino developers.
“That may be something we want to take a look at just to understand a little bit more the nuances of that competition,” Eric Schippers, a Penn senior vice president, said in an interview.
The MGM-Penn battle in Springfield, the only community that had more than one potential applicant, provided a preview of the larger competition among casino companies that will play out later this year.
The 2011 state gambling law authorized three resort casino licenses, no more than one in each of three regions of the state, and a license for one slot parlor, which can be built anywhere. In addition to the competition in Western Massachusetts, three companies are pursuing the Greater Boston casino license, and four are chasing development rights for the slot parlor. The commission voted April 18 to lift a freeze on commercial casino development in Southeastern Massachusetts, which had been established to allow the Mashpee Wampanoag time to make progress on a tribal casino in the region. The tribe continues to pursue a tribal casino in Taunton, though skeptics say they may never overcome legal obstacles. The gambling commission will lay out a schedule in May for accepting bids in the southeast.
MGM’s offer to Springfield was comparable to Penn’s, city officials said. But MGM’s proposal won points for its open and “permeable” design, which would allow pedestrians to pass through the property to visit restaurants, shops, and entertainment without needing to go through the gambling room. Sarno’s administration was also impressed by MGM’s access to top entertainment acts and its commitment to bring them to Springfield venues, including the underused MassMutual Center auditorium.
MGM has pledged to build a 125,000-square-foot casino with at least 3,000 slot machines and 75 game tables, a 250-room upscale hotel, meeting and convention space, retail shops, 54 market-rate apartments, a cinema, bowling alley, restaurants, an outdoor plaza, and parking for at least 3,600 cars.
Sarno hopes to schedule a mid-July public referendum.
“This is our moment,” he said. “This is our time. We need to rally behind this game-changing development. MGM has assured me they will make this the marquee project in an urban setting in America.”
Michael Kogut — chairman of Citizens Against Casino Gaming, a group resisting the proposal — said that “the game-changing element is just bringing further woes to an already decaying urban center. A gaming center is not going to lift the spirits, the pockets, or the economy of the city of Springfield.”
Kogut said opponents will push to delay the casino referendum until after the summer vacation season, to provide more time for public debate.
If MGM wins the license, the company has committed to finishing the project within 33 months, though Hornbuckle said it could be built more quickly, perhaps in as few as 26 months. If the commission awards development rights in early 2014, MGM would expect to open the resort in 2016.
In addition to MGM and Penn, Springfield fielded serious interest from at least two other companies. Ameristar bought land for a gambling resort, but abandoned the project when it seemed clear Sarno preferred a downtown location. Hard Rock also pursued a site in downtown Springfield, before making a proposal at the Big E fairgrounds.