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Arbitrators rule in favor of Longmeadow's offer to MGM


April 30, 2014

By Chris Maza

chrism@thereminder.com


LONGMEADOW – Western Massachusetts communities completed a clean sweep in their surrounding community agreement arbitration cases with MGM.

Days after West Springfield received a favorable ruling, Longmeadow Selectman Mark Gold confirmed to Reminder Publications that the panel of arbitrators ruled in favor of the town’s best and final offer, which requires an $850,000 up front payment and $275,000 in annual mitigation payments over 13 years after the proposed resort casino in the South End of Springfield opens its doors.

“Obviously, we’re very gratified,” Gold said. “This confirms what we’ve been saying since we started this process – that a Springfield casino will have an impact on Longmeadow and those impacts will come at a significant cost.”

Gold credited the town’s special counsel from Murphy, Hesse, Toomey & Lehane, Town Manager Stephen Crane, his fellow Select Board members and town employees for their diligent work in achieving the victory.

Longmeadow’s best and final offer, totaling $4.4 million, was approximately $4 million less than what the town asked for in its initial counter offer in December 2013. In addition to monetary dispensation, Longmeadow’s best and final offer included “look-backs” and the option to re-open negotiations.

MGM’s proposal offered a maximum value of $1.6 million and two options. The first option proposed the town would receive up-front payments of $100,000 for legal and consulting fees and $100,000 to be used to offset the cost of necessary traffic improvements, such as signal equipment and retiming. Through a “look-back,” the town could receive up to an additional $600,000 in order to mitigate other negative impacts identified by a traffic consultant.

The second option called for $100,000 in up-front payments, $75,000 in annual mitigation payments and a total of $375,000 to be disbursed according to a schedule outlined in the agreement to offset the cost of one- and five-year “look-backs.”

Gold explained that because the procedure utilized a “baseball arbitration” method, Longmeadow’s best and final offer was accepted in full, with no amendments.

“The major difference is MGM’s stance was to take a ‘look-back’ approach in which they gave us very little guaranteed money and said, ‘Well, if there are problems in the future, we’ll reimburse you for them,’” Gold said. “Our argument was that there were going to be significant impacts and we couldn’t wait five years to receive reimbursement because we couldn’t afford to foot the bill up front. What were we supposed to do? Hire more police or have police work overtime, but tell them they’d have to wait five years to get paid?”

The majority of Allan van Gestel and William G. Haward Jr. agreed with Longmeadow’s argument and found that the MGM project would have a significant impact primarily in the areas of traffic and public safety. “MGM’s own projections suggest that over 30 percent of its revenues when its gaming establishment begins operations will come from persons traveling to Springfield from Connecticut, passing through the town on [Interstate] 91 and Route 5,” Gestel and Howard pointed out.

“Any increase in traffic, accidents or other events, such as DUIs, on either highway [Route 5 or Interstate 91] will require additions of personnel and equipment to both [police and fire] departments,” the majority finding reads, noting that the town receives most of its revenue from residential real estate taxes and is limited by Proposition 2 1/2. “Further, the town’s ability to raise funding for expanded public safety infrastructure is controlled by state tax increase limitations and regulations regarding municipal expenditures.”

Crane said, “The town is pleased with the panel’s decision. The impact to traffic and public safety have been the town’s focus for many months and this award clearly validates that those impacts are predictable and must be addressed before the casino opens, not through an ill-conceived look back.”

He added, “The Select Board, Town Departments and legal consulting team worked tirelessly to protect the interest of town residents.”

Margaret R. Hinkle, the arbitrator chosen by MGM during the selection process, voted against the award, stating that she “could not conclude that such expenditures are reasonably linked to specific significant and adverse impacts directly attributable to the casino.”

MGM spokesman Carole Brennan said of the decision, "While MGM respects the arbitrators' and the town's hard work in this matter, we are disappointed with this latest decision. We strongly disagree that Longmeadow will be impacted any more than the other similar sized and proximate surrounding communities. The Massachusetts Gaming Commission will now make final determinations on the two outstanding negotiations, with Longmeadow and West Springfield. We have submitted objections for its consideration, and we look to the commision's review of the terms of the arbitrators' decision for the final say on this matter."

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