Under a new casino agreement announced Thursday, Mohegan Sun would become not only the biggest taxpayer in Palmer but would pay more to the town than all other taxpayers combined.
As part of the deal, Mohegan Sun has agreed to give the town $2.94 million upfront and then annual payments of about $16 million, a sum larger than the town’s current local tax levy of about $15.5 million, according to town budget figures.
“Anything that doubles your tax base is good for the community,” Town Councilor Paul Burns said.
The agreement, coming after eight months of negotiations, allows the gambling giant to move ahead to a local vote, the next step in its four-year pursuit of a casino license in Western Massachusetts.
“We have a very, very comprehensive agreement and one that is transformative for the Town of Palmer in terms of the revenue that’s guaranteed, in terms of the infrastructure improvements that are coming with it, and the job opportunities for this town,” Mitchell Etess, chief executive of the Mohegan Tribal Gaming Authority, said Thursday.
Town officials plan to use the additional money to address the possible effects of a resort casino by beefing up police, fire, and ambulance services as well as expanding the public works department and hiring town inspectors.
“Obviously, there would be more money available for the schools,” said Town Manager Charlie Blanchard. “At the same time, it appears there would be plenty of opportunity for us to reduce the burden on the residential taxpayer, as well.”
Jennifer Baruffaldi, a spokeswoman for the pro-casino group Citizens for Jobs and Growth in Palmer, said that she is looking forward to a property tax break after 18 years as a homeowner. “I’ve seen my taxes go up and up,” she said.
But opponents warned the deal was a fantasy that’s unlikely to come true.
“Whatever they promise Palmer, it will change,” said Emma Ladd Shepherd, an activist with the group Quaboag Valley Against Casinos. “There’s not a casino in the country that has kept its promises.”
Another opponent, Charlotte Burns, copresident of the anti-casino group, said the quiet character of the town is worth more than what Mohegan Sun is offering.
“You’re talking about completely destroying a beautiful rural area,” she said.
“Would the people of Weston, Massachusetts, want to destroy their quality of life for $16 million? Or some of these other wealthy towns? But because Palmer is having trouble economically, that’s OK? Just ruin the area?”
The agreement needs to be formally approved by the Palmer Town Council and the Management Board of the Mohegan Tribal Gaming Authority, though both bodies are expected to pass the deal.
No casino project can win a license unless it is endorsed by the residents of its host community in a referendum. The Town Council is scheduled to vote Sept. 3 on the agreement and establish a date for a town-wide referendum.
Mohegan Sun has asked that the referendum be held Nov. 5, which is normally Election Day, though there are no candidate races this year, Blanchard said. State law requires a 60- to 90-day campaign for any casino vote, once the host deal is reached.
The agreement includes an estimated $23 million to expand and improve roads and sewer and water systems, including expanding the capacity of the Exit 8 interchange on the Massachusetts Turnpike, the route most visitors would use to reach the facility, according to Mohegan Sun.
The company said the $16 million annual payment includes fixed payments totaling $15.2 million and a percentage of gambling revenue equal to 0.25 percent of the first $400 million.
“These payments represent the largest per capita and per household mitigation of any Western Massachusetts proposal and should help bring fiscal stability to Palmer, plus much-needed infrastructure improvements benefiting Palmer and the surrounding region,” the company said in a statement.
The town will also receive an additional 2 percent from every dollar of gross gambling revenue above $400 million annually, according to Mohegan Sun.
Mohegan Sun is competing for the sole Western Massachusetts resort casino license with MGM, which is planning a casino in downtown Springfield, and Hard Rock International, which has plans for a gambling resort on the Big E fairgrounds in West Springfield.
The state gambling commission will choose the winning project in early 2014.
Residents of Springfield have approved the MGM project at a referendum. West Springfield residents go to the polls to decide the fate of the Hard Rock proposal on Sept. 10.