Springfield Mayor Domenic Sarno has chosen MGM Resorts International to develop an $800 million casino project in the city’s downtown. It puts MGM one step closer to competing for the lone casino license available in western Massachusett.
Springfield would receive more than $25 million annually in taxes and other payments from MGM Resorts if it is successful in building the resort casino, under the terms of a comprehensive development agreement announced Tuesday by Springfield Mayor Domenic Sarno.
The deal, called a host community agreement, also commits MGM to creating 3,000 permanent jobs and 2,000 construction jobs and spending $50 million a year to purchase goods and services from local companies. The agreement, which Mayor Sarno and MGM officials will formally sign on Wednesday, pays the city a $1 million signing bonus.
The agreement must be approved by the Springfield City Council and then by voters in a city-wide referendum. City officials are hoping to hold the referendum in mid-July. If the referendum passes, MGM can apply to the Massachusetts Gaming Commission for a casino license, one of three available statewide. Sarno made an appeal Tuesday to the city’s voters.
Mayor Sarno chose MGM over a competing casino developer , Penn National. MGM is proposing to develop a three- block area in the south end of the city’s downtown. Penn National’s project was in the north end of downtown. Sarno said in addition to the money other aspects of MGM’s project stood out.
Bill Hornbuckle, the president of MGM Springfield, told reporters on a conference call that it was a great day for MGM and a great day for Springfield.
A spokesperson for Penn National, in a statement, said the company was disappointed, but it respected the mayor’s decision. The statement said Penn had offered the city the best package it could justify from a shareholder return prospective.
Mayor Sarno voiced confidence that MGM would prevail over competitors Mohegan Sun in Palmer and Hard Rock International in West Springfield, if all three end up before the state gaming commission seeking the lone casino license for western Massachusetts.
Mayor Sarno said MGM’s proposal was endorsed unanimously by the six- member casino selection advisory committee he appointed last year. The chairman of the committee, Haskell Kennedy, a retired former labor department official with the state of Connecticut, praised MGM’s record as an employer. He said he was struck by MGM’s decision to continue to pay workers at a Gulf Coast casino after it was shut down by Hurricane Katrina.
MGM has committed to no fewer than 2,000 construction jobs, with affirmation action goals for minorities, women and veterans. Of the 3,000 permanent jobs the agreement calls for no fewer than 2,200 to be fulltime. Thirty-five percent are to be filled by city residents. And 50 percent of the workforce is to be minorities and 50 percent women.
The deal also requires MGM to schedule 12 events a year in the state- owned Springfield convention center, and the city- owned entertainment venues, Symphony Hall and City Stage.
Jeffrey Cuiffreda, president of the Springfield Chamber of Commerce praised the agreement.
Springfield Chief Development Officer Kevin Kennedy said MGM is planning on 33 months to build the project, which means the casino could open in Springfield in 2016.
Mohegan Sun recently announced it expects to complete negotiations with Palmer officials on a host community agreement this summer with a voter referendum likely in September. Hard Rock officials have not said if they have started negotiations with officials in West Springfield.