Springfield City Councilors Question Changes In MGM Housing Plans

Jun 9, 2017

The long-vacant former hotel at 31 Elm Street in Court Square is now the focus of a redevelopment plan that would be partially financed by MGM to satisfy a commitment to bring market-rate housing to downtown Springfield as part of the $950 million casino project.

     A tentative agreement is in place between officials in Springfield, Massachusetts and MGM to have the casino operator invest in a long-stalled downtown development project. But it means MGM’s pledge to build housing as part of its $950 million resort casino development will be further delayed.

       The agreement calls for MGM to invest $11 million in a $35-$45 million project to redevelop the long-vacant six-story former hotel building at 31 Elm Street in Court Square in the heart of downtown. Additionally, MGM will give to the city an historic office building it purchased last year so the city can seek bids to turn it into an apartment building.

  "We feel that this is a very good deal for the city," said  Springfield Chief Development Officer Kevin Kennedy, who outlined the plan for members of the Springfield City Council’s Casino Oversight Committee at a public meeting Thursday night.

   He said in order to execute the agreement the City Council and the Massachusetts Gaming Commission will need to sign off on it.

  "If we agree locally, I don't see any reason why the ( gaming commission) should have a problem with it," said Kennedy.

  The terms of MGM’s casino license with the state and its host community agreement with the city call for it to develop 54 units of market-rate housing that is to be “owned, operated, and branded” by MGM as part of a plan to further enliven downtown Springfield with more residential activity.

   This marks at least the third change in plans for the housing portion of the casino project.  Initially, the housing was to be part of the casino footprint. When MGM and the city later agreed the housing could be developed within one-half mile of the casino, MGM purchased the vacant building at 195 State Street, which it now plans to give to the city.

   Redeveloping the building at 31 Elm Street, located across from the civic center and a block from where the casino is being built, was identified in a well-regarded study a decade ago as the key urban renewal project in downtown Springfield.

  The building is owned by the Springfield Redevelopment Authority, which five years ago designated OPAL Real Estate Group as the preferred developer.

  Michael Crowley, a consultant for OPAL, said the “stars are aligning” to finally get a project off the ground.

" We approached MGM and it quickly became logical that this was a fabulous opportunity to create probably the highest-end residential property in downtown Springfield," said Crowley. "Without the MGM money this project is economically infeasible."

    OPAL is partnering with Winn Companies, a Boston-based developer, and with MGM’s investment, plans to build 60 one- and two-bedroom apartments on the upper floors of the Court Square building with commercial and retail space on the lower floors.

Councilors asked many questions about the development plans during a two-hour hearing and Councilor Mike Fenton, who chairs the casino oversight committee, said a follow-up meeting will be scheduled over the summer.

  "I won't be comfortable amending the host community agreement until the questions that have been raised tonight about this exciting project are addressed," said Fenton

  At a meeting last month, Massachusetts Gaming Commission Chairman Stephen Crosby chided MGM for the delay in the housing portion of the casino project and warned there would be “dire consequences” if the housing is not built.

  Under the timeline outlined by the developers of 31 Elm Street, construction would be finished by the end of 2019.  The MGM casino is on pace to open in September 2018.