City Council tackles MGM, tax incentives in two seperate special meetings

Oct. 2, 2015 | G. Michael Dobbs
news@thereminder.com

SPRINGFIELD – At one point during the special City Council meeting on Sept. 29 called to discuss matters relating the MGM casino, City Councilor Kateri Walsh said the discussion was “almost a broken record.”

Walsh explained that after the special meeting preceding this one during which the council approved a tax incentive plan for the CRRC rail car factory, the council was now hearing for the first time about the changes to the MGM Springfield casino plan, the changes that had been discussed by the mayor and presented to the Gaming Commission the previous week.

Walsh said the two issues – the tax incentive and the MGM changes – represented the same problem: the council had not been consulted.

Walsh added issues such as these come to the council “last minute with a gun to our heads.”

She implored the administration to include the council as part of the issues such as these.

Tax incentive

The tax incentive did pass the council, but not without discussion and some controversy. The chamber was filled with members of the building trades union and before the meeting Jason Garand, the business agent for the Carpenters Union Local 108 explained the union supports the council’s examination of the tax break of  $10 million over a decade. At the same time, he stressed the importance of the construction of the new factory to his union members.

Councilor Tim Allen questioned why there wasn’t a stronger guarantee in the contract between CRRC and the city for the use of local suppliers. Allen wanted to place an amendment specifying percentages to the contract.

Attorney Robert Emmet Hayes objected to the additional language. He said the Chinese company is “committed to the use of local vendors” and noted that for the groundbreaking ceremony all of the vendors were local.  He asked for no additional amendments, but for the approval or disapproval of the contract and tax incentive.

Allen said he didn’t think the amendment was controversial. Hayes said he was “at a bit of a disadvantage.”

He added, “I can’t say my client will go along with the amendment. This is the first time they have done work in the United States. I convinced them to come to the most expensive site … I can’t put my client at risk.”

After additional discussion, Hayes said the subject could be revisited in the future.

Councilor Timothy Rooke reminded his colleagues that CRRC had also looked at a site in Pittsfield.

The tax incentive and contract was approved unanimously.

Jersey Barriers

Although City Council President Michael Fenton had intended to present to the council a motion to place a non-binding question on the November ballot asking residents to approve the changes made to the MGM casino plan, he withdrew it as the Election Commission indicated it would not accept such a question if given to them after 5 p.m.

The first issue to be discussed was the jersey barriers on Main and State Streets surrounding the MGM construction area. The barriers have been used to block parking spaces so the work, largely underground at this point, could move forward and a traffic flow could be maintained, Department of Public Works Superintendent Chris Cignoli explained.

He added his department has issued 62 permits for various aspects of the construction of the casino.

There will be a meeting of the Traffic Commission on Nov. 2 to discuss the continual use of the barrier. The decision by the commission would then go to the City Council for final approval, Cignoli noted

Allen noted the barriers have taken away parking spots that have had a negative impact on the Caring Health Center and McCaffrey’s Public House.

Michael Mathis, president of MGM Springfield, said he would be willing to work with McCaffrey’s to provide parking at night.

Allen made a motion to send the issue to committee, but Fenton urged the council to address the removal of the barriers that night.

He explained the council by law is the entity in charge of the city’s roads. The barriers were placed there under a 120-day temporary order and the 120 days have lapsed. Fenton asserted the barriers were there illegally.

The council approved moving the issue to committee.

Changes to the casino

Although the council is among the entities that must approve the changes to the casino plan as an amendment to the Host Community Agreement, they were the last to officially learn of the changes.

Mathis apologized for the lack of communication and said the company wants the council’s input.

“We are completely open to it,” he said.

He stressed the changes of eliminating the 25-story glass tower hotel for a six-story hotel and moving the apartments out of the complex and into another building have not changed the commitment of the company to the project and the city.

MGM Vice President of Development and Construction Brian Packer gave an update on the construction so far. He said the site fence has been erected, some buildings have been demolished, other buildings have had asbestos abatement, and the new home of the Springfield Rescue Mission, an $11 million development of the former Orr Cadillac dealership, has been completed.

So far, the work has been done by more than 675 workers with 37 percent of them from Springfield and the surrounding areas. Goal to hire the agreed percentage of women and minorities have been met and the company is working to fulfill its obligation for workers who are veterans, Packer said.

He also supplied the councilors with a list of local companies used so far in the construction.

Mathis then went over the changes, especially on the hotel. He noted the best high-end hotels in Boston are not high rises, and the MGM facility to house high rollers in Las Vegas is not a high rise as well.

He gave them a recent Wall Street Journal article describing the huge price jump for the glass that had been used in the original hotel plan to help explain the cost overruns that spurred the change.

Mathis noted that from the time the plan was first proposed to when construction could begin was 18 months. The delay was caused in part of by the statewide referendum on casino gaming and the Interstate 91 viaduct project.

Rooke praised the project and supported MGM’s contention that the price of glass has skyrocketed.

Councilor Orlando Ramos wondered if there could be a compromise with a shorter tower. Mathis said such a move would eliminate hotel rooms, which the new six-story hotel does not do.

Mathis added if the casino is successful, MGM has an expansion plan that would include a tower.

Ramos cited a study that indicates skyscrapers are seen to reflect the economic health of a community.

“It’s more than just aesthetics,” he said.

***

After the Gaming Commission meeting on Sept. 25, the commission’s chair Stephen Crosby said it would take the commission one to two months to consider the changes MGM had presented. He said the commission would also look to the decisions made by the city government. The changes must be approved by Mayor Domenic Sarno and by the City Council, as well as the commission.

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