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Michael Mathis, President, MGM Springfield
April 17, 2014
Mr. Chairman, Commissioners,
Thank you for allowing me to appear here today. Yesterday I sent you a detailed letter
outlining MGM's request and offer to bridge what we think may be a 2-3 week period of
uncertainty between the Commission's selection of the winner of the Western
Massachusetts Category 1 license, and what we hope and expect will be the dismissal
by the Supreme Judicial Court of the effort to repeal the Massachusetts Gaming Act,
which was signed by Governor Patrick in November of 2011.
The Commission's current schedule provides for a May 30 award of that license. As you
know, MGM, along with the towns of West Springfield and Longmeadow, recently and
jointly asked the Commission for what is tantamount to a 2 week extension of that
selection in order for us to finalize our surrounding community agreements through
arbitration. I am pleased to report that the first of those hearings is to commence and to
be completed tomorrow, and the other will be completed by early next week. The
arbitrators in those proceedings are committed to provide a final decision on both of
those by April 30.
Accordingly, we believe a mid-June licensee selection is very obtainable, with these last
two surrounding community agreements resolved, and the subsequent statutory closing
of our final host community hearing in Springfield. We recognize the economic and
budgetary benefit to the Commonwealth from an award of the Category 1 license for
Western Massachusetts and the receipt of the $85 million licensing fee by the end of
this June 30 fiscal year.
To make that possible, MGM is requesting that the Commission consider a 2-step
process in award of the license.
First, a “selection” or “determination” of the Commission's selection for that license. As
the sole remaining bidder for that license in Region B, I hope you won't think us too
presumptuous to suggest that MGM Springfield receive that determination. I would also
suggest that being the last bidder standing in Region B is no accident. Respectfully, we
believe that MGM Resorts is the best company, with the best project, in the best city
and site in Western Mass for this opportunity. Having spent time with our company,
and time in Springfield seeing our vision, I hope you agree. We all believe the law is
working as it should. A handful of communities have approved hosting a casino resort
Such a “selection” or “determination” would allow MGM and the Commission to
negotiate the form of award and related conditions in advance of what would be the
formal award of the license, which we are proposing would only be conditioned on the
dismissal (if by the SJC) or rejection (if by the voters in a November ballot) of the repeal
MGM is offering, under such a bifurcated process, to waive our statutory right to 30
days to make payment of our various licensing fees, including the $85 million fee, and
instead to make such payment within 5 business days of a formal award. Further, we
have committed to try and further expedite those payments in the event the SJC
dismisses the petition in June, and we are able to make that payment in this fiscal year.
We are more than happy to make those concessions and provide flexibility in what
continues to be an evolv ing and complex process. We have also offered to advance
what would be our proportionate share of operating costs of the Commission through
the end of this calendar year. We are estimating that amount to be approximately $2.7
million, and we have offered to make that payment following our selection but prior to
our formal award.
I also want to acknowledge and thank the Commission for the flexibility you all have
shown throughout this process, specifically the latest revised regulations you passed to
provide you the tools to accommodate some of the elements if this request.
In closing, I would be remiss not to mention some of the opportunities that are on hold
while the process is under this cloud of doubt. The licensing fees and payments to the
Commission are certainly important but we also have committed in our host community
agreement to make millions of dollars of pre-payments during the development period to
fund such causes as early education and public safety once we can start construction.
But it goes beyond dollars. Shovels in the ground means 2,000 badly needed
construction jobs in what will be the largest development project in Western
Massachusetts, which is why the Carpenter's Union joined us yesterday at the SJC with
their own filing opposing the repeal petition. Similarly, our project means joint marketing
partnerships with the MCCA, who manages this building and the MassMutual Center in
Sprin gfield. They along with the Affiliated Chamber of Springfield and the Greater
Springfield Convention and Visitor's Bureau also filed papers with the Court yesterday
on behalf of their impacted members. We were also pleased to have the
Massachusetts Competitive Partnership, who represents some of the Commonwealth's
top business leaders, file with the Court as well.
Thank you for taking the time this morning to let us explain our proposal, and we look
forward to getting your feedback and thoughts.