Springfield: MGM bests Penn … for now

Yes, the comedy is finished in Springfield, at least for the moment. In an episode worthy of The Simpsons and after an epic amount of foot-dragging, Springfield Mayor Domenic Sarno was cajoled and ultimately browbeaten into actually taking a stand on which gambling company will get the city’s nod to build a resort downtown. And the winner is … MGM Resorts International. (Not such a big surprise, considering the ritzier MGM brand, the historically sensitive design and its willingness to spend heavily.)

Faced with a Penn vs. MGM choice, Mayor Sarno dove under the table, punting  the decision to the voters this summer. The city council’s Casino Site Committee, unamused by this profile in lack of courage, told Sarno to do his job: Make the tough calls. I won’t say MGM was a foregone conclusion but the highest, most extravagant offer is always likeliest to come out ahead when casinos are up for bid, and MGM’s $850 million trumped Penn’s $807 million. (We’ll just ignore that $13.5 billion in long-term debt for the moment, ‘kay?)

West Springfield — which is paired with Hard Rock International — and Palmer (dickering with Mohegan Sun) are still very much in the running but, due to the size of investment proposed by MGM and rival Penn National Gaming, and its strategic location, Springfield always looked the linchpin of the western Massachusetts region. Indeed, the dollar amounts cited were so big that Mohegan Sun is now talking about a seemingly insupportable $775 million megaresort. Not to be underestimated, the hard-pressed company has acquired a Mr. Moneybags business partner from Wall Street, one Brigade Capital Management. Interesting. (Highway work that would go right by MGM’s site could lift the ultimate chances of Mohegan Sun but not those of Hard Rock, which already has traffic issues by the bucketful.)

A serio-comedic outcome could have voters in the area initially approving casino developers that the Massachusetts Gaming Commission later deems unsuitable (a bullet that Springfield dodged). Why? Because the haste to hold referendums has outrun the MGC’s own due diligence, leaving regulators to play catch-up with the body politic. So MGM could be approved in Springfield, then shot down at the state level, negating all of Sarno’s agita. Speaking of which … it’s food for thought whether local restaurateurs will get their wish of an MGM casino radiating business out toward them or whether the desire of gamblers for convenience will result in a giant sucking sound.

After a “grassroots” campaign costing $10 million — that’s a pricey brand of turf — MGM mowed down Penn, in a Jim Murren vs. Peter Carlino slugfest. (First Maryland, now this. Arrrgghhh!) Penn, now out of the July 16 vote, signaled surrender. In a formal announcement, “spokesman Eric Schippers said the company was disappointed in the decision but wished MGM and Springfield the best.” MGM and Springfield having inked a host community agreement, Penn’s air of resignation was gracefully borne, even as the beautiful design of an $807 million casino is destined for the shredder … or just might be re-purposed for Chicopee: Penn isn’t slamming the door on Massachusetts just yet and Chicopee city fathers appear to be experiencing second thoughts about “having a seat at the table.”

Now that Sarno has — however, reluctantly — taken a stand, MGM President Bill Hornbuckle became “ecstatic.” A volatile fellow, this Hornbuckle: Not so long ago he was threatening to flee the state if four casinos were built instead of only three (the extra one being about as far from Springfield as possible), and getting testy with Toronto in his spare time. The pact, if approved by voters in July, brings at least $800 million in development to a tornado-wracked part of town and puts $25 million/year into city coffers. An 11-point bullet-point sales pitch accompanying MGM’s formal announcement indicates that the wooing of Springfield voters is far from over, including a $15 million upfront fee and promises of $50 million “best effort” toward local procurement. Against this, Penn’s corny counter-efforts came up a bit lame. Even the promise of overwhelmingly local hiring, music to the ears of local unions, didn’t turn the tide.

Elsewhere in the Bay State, Neil Bluhm‘s Rush Street Gaming has settled upon Worcester as the site of its low-cost, high-tax slot parlor. Compared to its competition, Bluhm is a titan among midgets and can certainly point to a track record of success his trotting and dog-racing competitors are unlikely to muster, although Plainridge Racecourse is putting up spirited competition for the concession.

What little patience the Massachusetts Gaming Commission had with the Mashpee Wampanoags has expired. For their part, the Mashpee Wamps are living in a dream world, one in which federal recognition and a congressional fix of the Carcieri v. Salazar decision, plus the construction of a casino are all accomplished in two years. Regulators defended the opening of southeastern Massachusetts to private developers as a CYA move.

Given the Mashpee pie-in-the-sky attitude, the state is well advised to look elsewhere … th0ugh maybe not to Milford, just up the road from Mashpee Casino HQ in Taunton. That’s where insolvent Foxwoods Resort Casino (“What is this ‘default’ of which you speak?”) has the nerve to pitch a casino project. Foxwoods CEO Scott “Woody” Butera is in cahoots with another all-hat, no-cattle casino developer, David Nunes (left), so this really is the clown car in the parade. Local selectmen were more concerned about sewage disposal than another, equally vexing question: Where in Hell do Nunes and Butera think they can get $1 billion in backing? Worse still (if that were possible) front man Nunes has gone to ground. If there’s a front-runner for the coastal region of Massachusetts, it’s a Player To Be Named Later.