Millions of dollars from MGM Resorts will start flowing soon to Springfield and other western Massachusetts communities. MGM is obligated to make the payments years before the $800 million casino it is building in downtown Springfield opens.
Now that MGM Resorts has been awarded a casino license by the Massachusetts Gaming Commission -- a formality that had been delayed for months by the ill-fated effort to repeal the casino law on Election Day — the company must honor development agreements with Springfield and surrounding communities.
MGM must pay Springfield $3 million this fiscal year and $3 million in the fiscal year that starts July 1, 2015. In 2017, the year the casino is expected to open, Springfield will receive a guaranteed minimum payment of $17.6 million up to $24 million, according to the city’s chief finance officer T.J. Plante.
" It is good news," said Plante. " It does not solve all our problems but it will help address some of the needs we have."
Most of the payments from MGM go directly to the city’s general fund, but under the terms of the host community agreement the casino company must pay for specific projects and initiatives such as $150,000 for a public pavilion at Franconia Golf Course and $1 million for an early education program and library improvements.
Plante said the city will also receive $2.5 million from MGM to mitigate the impact the huge development project will have on city services.
" We have to hire staff to handle the permitting aspects of building a casino. There are going to be new restaurants so we need health inspectors. There are a lot of things that go into it."
MGM will pay a total of $1.5 million this year to eight municipalities surrounding Springfield and make similar annual payments for the next 15 years.
Decisions on how to spend the MGM money that will go into the city of Springfield’s general fund will be up to the mayor and city council during the course of the normal budgeting process, according to Plante.
" The big thing is to be strategic. It is a lot of money. We have a lot of needs such as an unfunded pension liability," said Plante. " There are also the resident's needs for core services. There are a lot of conversations we need to have."
Mayor Domenic Sarno announced last week plans to hire additional police officers and firefighters based on the revenue from MGM that will be counted in the next city budget.
City Council President Mike Fenton also has ideas about how to use the gambling money. He said there should be discussions about property tax relief and adding to the city’s cash reserves that would in turn improve the city’s ability to borrow for major infrastructure repairs.
" What I want to be sure of is the council plays the role of watchdog to be certain that money does not just go into the black hole of the general fund."
Fenton has scheduled a public meeting later today with councilors and representatives from MGM to discuss the casino project and steps the council will need to take next year when major construction is expected to begin.
The council will have to hold public hearings on street closings and other land use issues. Fenton said he will announce an “aggressive permitting schedule.”
Fenton said he also plans to introduce a casino ethics ordinance that would impose waiting periods for city employees to take jobs in the new casino.
" We are very excited about this project. It can be a game changer for Springfield and our region, but to accomplish that we have to maintain public trust."
Springfield Mayor Domenic Sarno said a local ethics ordinance may not be needed.
" We have some strong local and state ordinances already when it comes to ethics," said Sarno who added " I am more than willing to entertain ( what the council proposes.)"
Most elected officials in Springfield would be precluded from leaving immediately for a job with MGM under ethics provisions in the state casino law.
