Tax credits questioned for MGM apartments

May 11, 2017 | G. Michael Dobbs

This vintage postcard shows the Elm Street building MGM is now planning to convert into apartments.

SPRINGFIELD – The discussed use of tax credits in the development of the 54 apartments MGM Springfield must construct as part of the Host Community Agreement may be prohibited under the gaming legislation.

Mayor Domenic Sarno told Reminder Publications recently the proposed redevelopment of the Court Square building at 31 Elm St. into market-rate apartments might require some “affordable” or subsidized units.

Sarno stressed the inclusion of such units would be due to requirements imposed upon the developers if they use certain tax credits to help finance the projects. He was emphatic in describing the project as “market-rate.”

The mayor also stressed the use of 31 Elms St. was still in negotiations. The Springfield Redevelopment Authority owns the building and Peter’s Picknelly’s Opal Development is the preferred developer.

The issue of the affordable units was raised for the first time by MGM officials at the recent Casino oversight Committee meeting of the Springfield City Council.

Elaine Driscoll, spokesperson for the Massachusetts Gaming Commission, told Reminder Publications, “MGM’s plan for the residential units will need to come before the commission for approval.”

She added Section 49 of the Gaming Act prohibits the use of a number of tax credits in the development of a casino project. According to the legislation, “Unless otherwise provided, a gaming establishment or a business located or to be located within a gaming establishment shall not be eligible for the following credits or deductions listed in chapter 62 or chapter 63: the investment tax credit under section 31A of chapter 63, the employment credit under section 31C of said chapter 63, the van pool credit under section 31E of said chapter 63, the deduction for expenditures for industrial waste treatment or air pollution control under section 38D of said chapter 63, the deduction for compensation paid to an eligible business facility's employees domiciled in a section of substantial poverty under section 38F of said chapter 63, the film tax credit under subsection (l) of section 6 of chapter 62 and section 38X of said chapter 63, the alternative energy sources deduction under section 38H of said chapter 63, the research expense credit under section 38M of said chapter 63, the economic opportunity area credit under subsection (g) of said section 6 of said chapter 62 and section 38N of said chapter 63, the abandoned building deduction under subparagraph (10) of subsection (a) of Part B of section 3 of said chapter 62 and section 38O of said chapter 63, the harbor maintenance tax credit under section 38P of said chapter 63, the brownfields credit under subsection (j) of said section 6 of said chapter 62 and section 38Q of said chapter 63, the historic rehabilitation tax credit under section 6J of said chapter 62.

Casinos cannot receive tax increment financing or TIFs that many municipalities award businesses in order to attract them to a community and casinos cannot be designated as economic opportunity areas, either, according to the legislation.

If 31 Elms St. is determined to be the location for the apartments, an additional issue would be parking for tenants and visitors. The tenants at 31 Elms St., if that building is redeveloped, may be asked to use the casino’s parking garage.

According to the changes to the MGM casino plans approved by the Gaming Commission in 2015, “Following the Proponent’s review of the zoning regulations for the prospective site(s), [for the apartments] an appropriate parking supply will be supplied on each site or through formal arrangements for shared parking in adjacent surface lots. There is also sufficient parking supply on the MGM Springfield site to provide alternative arrangements for parking.”

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