Arbitration Awards For Casino Impacts Upheld

May 5, 2014

Two western Massachusetts communities that went through an arbitration process to obtain payments intended to offset the impacts of a casino in Springfield appear to have done better financially than municipalities that accepted offers from casino giant MGM Resorts.

An artist's rendering of MGM's proposed resort casino in downtown Springfield,MA
An artist's rendering of MGM's proposed resort casino in downtown Springfield,MA
Credit MGM Springfield

   Longmeadow and West Springfield went to arbitration with MGM after failing to reach negotiated settlements with the casino company by an end-of- March deadline established by the Massachusetts Gaming Commission.  By then MGM had reached surrounding community agreements with six other municipalities.

    The gaming industry regulators last week upheld the awards that were made by separate arbitration panels.  West Springfield will receive $425,000 in annual payments and an initial payment of $665,000 for the reconstruction of Memorial Avenue.  Longmeadow will receive an upfront payment of $850,000 with annual payments of $275,000.  

     MGM attorney Seth Stratton said the company wanted a future opportunity to review the fixed annual payments intended to help address problems like traffic and public safety.

  " There is a potential for a windfall. All we are asking to do is adjust the look-back so it can go both ways."

   The largest annual payment MGM agreed to make to other communities is $150,000 with $125,000 upfront. But, those payments could increase in later years under a so-called look- back provision in the negotiated surrounding community agreements.   

   MGM Springfield president Mike Mathis believes it is wrong for MGM to be forced to make annual payments regardless of the impacts the downtown Springfield casino may have on its neighbors.

     Longmeadow Town Manager Stephen Crane said the arbitration panel’s decision validated the arguments the town had made for months that the predictable traffic and public safety impacts from the proposed MGM casino are real.

      " This award gives us the ability to provide an increased level of service and make the upgrades we need in a way that is much better than anything MGM had offered us."

     Crane said under the look-back plan pushed by MGM the town would be hamstrung in its ability to respond to problems caused by the casino.

      " If we did not have these annual payments coming in  and we needed to make a change in real time to adjust to the circumstances our municipal budget and the limitations of Proposition 2-and-a-half would not allow us to do that."

      West Springfield Mayor Ed Sullivan said the arbitration award is not a windfall.

     " Our numbers that we requested and were awarded were extremely conservative. We believe are impacts are greater than that."

   The completion of the surrounding community agreements was one of the last steps required for MGM to be awarded a casino license.  The gaming commission is scheduled to announce the license award on June 13.