Mayor Martin J. Walsh will boycott arbitration hearings intended to decide how much compensation a Wynn Resorts casino in Everett would pay to Boston, leaving state gambling regulators in charge of determining how big a payment, if any, the city deserves.
By refusing to participate in “surrounding community” arbitration, the city could end up with little or nothing in payments from a $1.6 billion casino on its border; casino regulations say the state gambling commission could rule that Boston has “waived its designation as a surrounding community” by refusing to participate in arbitration.
The commission also has the power to impose an appropriate compensation package on the developer to offset the effects of the development on Boston, which is what Walsh expects the panel to do.
In passing on arbitration, the mayor is deferring the compensation question to a commission he has publicly tussled with throughout the opening months of his term. The commission has already rejected Walsh’s claims for more power over the Wynn project, and a rival Mohegan Sun casino proposal at Suffolk Downs in Revere, and spurned his call to freeze the licensing competition until after voters decide a proposed repeal of the casino law in November.
Walsh’s frustration with the commission was palpable in comments to reporters Thursday.
‘So far it’s been a no-win situation for us dealing with the Wynn folks, and the gaming commission has been a big part of that.’
“So far it’s been a no-win situation for us dealing with the Wynn folks, and the gaming commission has been a big part of that,” Walsh said. “It’s either arbitration or [the commission] can do it. They’ve made all the decisions along the way for Boston up to this point. I’m going to let them make the decision for Boston on what benefits Boston should get if they choose the Wynn proposal.”
Walsh said there are too many unanswered questions about the Wynn proposal, contending the city still lacked critical environmental reports and land agreements it would need to properly prepare an arbitration case.
Gambling commission spokeswoman Elaine Driscoll said the panel “regrets the City of Boston’s decision not to proceed with arbitration.’’
“The commission has always said that a negotiated agreement is the best course of action and therefore hopes that the parties will continue to negotiate,” Driscoll said in a statement. “Failing that, the commission has a number of alternatives and will expeditiously consider which of them to follow.”
Wynn spokesman Michael Weaver said the company had submitted its “best and final offer” to the city, as required by the commission’s arbitration guidelines.
“We understand that Boston refuses to participate in the arbitration and the regulations address this situation,” Weaver said in statement. “We will await the commission’s determination on how they wish to proceed.”
Weaver did not address Walsh’s claims that the city was still seeking critical documents, though the company has consistently said it had provided the necessary information.
Walsh announced his surprise move to decline arbitration on the same day he finalized a compensation deal negotiated with the rival applicant, Mohegan Sun.
The deal would provide at least $18 million a year for East Boston, making it the richest compensation deal in the state for a community that is not actually hosting a casino.
But taking the deal was a tough political decision for the mayor, given that East Boston voters last November rejected an earlier casino proposal at Suffolk Downs, which straddles the Boston-Revere city line. Revere supported the original Suffolk Downs casino plan, and the gambling commission waived one of its deadlines to permit Mohegan Sun to offer a new proposal tailored to sit exclusively on the Revere portion of the site, effectively circumventing the East Boston “no” vote.
“The Gaming Commission is making the rules up along the way,” Walsh said.
The mayor tellingly did not join Mohegan Sun officials when they celebrated the completion of the compensation deal in a media conference Thursday outside City Hall.
“Just another example of the Mohegan Sun way, the way we work with the communities and we’re good neighbors,” Mitchell Etess, chief executive of the Mohegan Tribal Gaming Authority, told reporters. Suffolk Downs announced a separate deal with Walsh, ensuring the track will continue racing for at least 15 years if Mohegan Sun wins the casino license, as track officials had promised in January.
Walsh left City Hall well after the Mohegan Sun media conference and said his decision to sign a compensation package does not mean he endorses a Revere casino.
“I don’t think they can tout me as a supporter of their project,” Walsh said, though he defended the scope of the compensation agreement as strong for East Boston and said Mohegan Sun was easier to work with than Wynn.
The mayor declined Thursday to defend the 2011 state casino law that made the Mohegan Sun and Wynn projects possible, saying he has not yet decided if he will take a public position on the pending repeal.