Council Unanimously Approves Casino Compact

January 30, 2014
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The City Council unanimously endorsed a resolution authorizing City Manager Jay Ash to enter into a $2.5 million a year mitigation Surrounding Community Agreement (SCA) with Mohegan Sun at its meeting on Monday night.

Manager Ash and City Council President Matt Frank negotiated the agreement to address public safety and other potential concerns raised should Mohegan Sun win the Region A gaming license it seeks for the building of a $1.4 million resort casino at Suffolk Downs in Revere.

“This is a great package for Chelsea, 2.5 times richer than any other surrounding community agreement anyone has signed in Massachusetts,” said Frank. “It addresses our concerns and allows us to focus on the benefits of having 4,000 jobs and more than a billion dollars of investment at our doorstep,” said Councillor Frank.

Massachusetts law requires casinos to have SCAs with neighboring jurisdictions that may be impacted by casino operations. Casino operators can voluntarily agree to designate a municipality as such, or that municipality can seek designation through a process led by the Massachusetts Gaming Commission (MGC). In Chelsea’s instance with Mohegan Sun, the parties long ago agreed that Chelsea should be awarded surrounding community status.  Discussions began with Suffolk Downs and culminated with Mohegan Sun agreeing to the $2.5 million a year compact.

Last week, Ash released the details of the agreement.  As many as seven new police officers will be hired and other operations funded with a total of $675,000 to address general patrolling, criminal investigations, vice activities and traffic concerns.  Two 9-1-1 operators, at a cost of approximately $100,000, will be hired to handle the additional call volumes of those police officers and others. The schools will receive $850,000 for day and after-school programming and scholarships. Job training and English classes will benefit with $100,000 each. Youth programming is set to receive $100,000 and cultural activities another $50,000.  Infrastructure improvements will be funded with $425,000, and addiction services will receive $100,000. The agreement includes an escalator clause that will raise payments by the lesser of inflation or 2.5 percent annually.

“The package is substantial and far-reaching,” said Ash. “In addition, we have agreement that at least 200 jobs will go to Chelsea residents and $2.5 million will be spent annually on local businesses. Local businesses will also be able to accept Mohegan Sun rewards cards. We are also going to benefit from improvements made on Revere Beach Parkway, summer jobs and regional planning.”

Ash has been a leading advocate of the casino movement in Massachusetts, which Frank suggests may be a reason why Chelsea is set to receive an amount far in excess of any other SCA to date. Around the state, surrounding communities have been agreeing to compacts that have ranged from $50,000 to $1 million. While Ash has been a champion, some councillors found themselves reluctantly supporting the SCA.

“I may not like the direction the state is going with allowing casinos to operate here, but if they are coming I want to make sure Chelsea gets every benefit possible,” argued Councillor Brian Hatleberg, whose sentiment seemed to speak for several of his colleagues.

State law does not require a vote of the Council to support the SCA, but Ash pledged to do so anyway to make sure City officials were on the same page.

“This is an historic agreement for Chelsea, and I want to make the Council has had a chance to review and endorse it,” Ash said to councillors.

A similar agreement has not been reached with Wynn Resorts, which is proposing a $1.2 billion resort casino on Route 99 in Everett.  Ash and Wynn were at odds early in this month about Chelsea being designated a surrounding community, that despite Chelsea being the same seven-tenths of a mile from both the Revere and Everett sites.  Last week, Wynn did officially recognize Chelsea as a surrounding community and negotiations are said to have begun.

“We’ll see where that one goes.  For tonight, though, we’ve confirmed that Chelsea’s best interests will be protected and advanced with a great package should Mohegan Sun receive the designation.

“The folks at Mohegan Sun have been great to deal with, and our friends at Suffolk Downs have been our friends for 75 years. I’m excited about their partnership and our collaboration, and I do believe that many benefits will accrue to our region as a result of a resort casino being awarded to Revere,” said Ash, who says that he favors the Revere site for the Region A designation.

Not only is the Chelsea/Mohegan Sun compact contingent on the awarding of the Region A license to Mohegan Sun, but Revere voters must approve a Feb. 25 referendum question as a host community of the site.

“I’m very optimistic about the Revere vote because Revere Mayor Dan Rizzo is doing a great job articulating the huge benefits Revere will derive from the Mohegan Sun development.

“It’s a once in a lifetime opportunity to inject billions of dollars of economic vitality into Revere and the region.  I support the Revere vote and am fully convinced that their partnership with Mohegan Sun will have a dramatically positive impact on all that Revere can and will accomplish under Mayor Rizzo’s leadership thereafter,” said Ash.

OTHER COMMUNITIES GET AGREEMENTS

Mohegan Sun announced late on Tuesday that it had reached SCAs with seven localities in and around Revere, including Cambridge, Chelsea, Lynn, Malden, Medford, Melrose and Salem.

The casino company has also designated Boston, Saugus and Winthrop as Surrounding Communities, but is still in continued discussions with those communities.

The local impact payments will total $3.75 million among the seven municipalities – with Chelsea getting $2.5 million of that.

The agreements also ensure that small businesses in the communities will have access to millions of dollars in annual spending by the proposed $1.3 billion development and that residents in these communities will be given job opportunities at Mohegan Sun Massachusetts and have access to job training programs and problem gambling services.

“We are pleased to announce these agreements, which represent an important step in our efforts to develop an incredible destination that will benefit the entire region with the creation of new jobs, economic development and tourism opportunities,” said Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority. “Each of these communities have been a great neighbor to Revere and Suffolk Downs, and these agreements illustrate Mohegan Sun Massachusetts’ commitment to work in partnership with our neighboring communities.”

Mohegan Sun Massachusetts expects to spend about $50 million annually on goods and services from businesses located within a 15-mile radius of Revere once the resort is fully operating. Similarly, MSM expects to create 4,000 jobs and has committed to hiring 75 percent of its workforce within the same 15-mile radius.

Also included as part of the agreed-upon terms are strong commitments to regional economic development and benefits – such as the cross marketing of tourist attractions and cultural institutions in these communities, and providing local businesses with access to vendor opportunities and Mohegan Sun’s industry leading players club points program. Mohegan Sun has also agreed to fund approximately $1 million in additional study and design of regional traffic solutions not related to the impacts of the proposed resort. Mohegan Sun also has terms for agreements in principle with Cambridge, Lynn, Malden, Medford, Melrose and Salem, subject to city council approval.

“Our relationships with our surrounding communities is very important, and we appreciate the hard work and thoughtful approach of each of these city leaders to reach these agreements,” said Chip Tuttle, Chief Operating Officer of Suffolk Downs.  “Mohegan Sun Massachusetts will not only preserve the future of Thoroughbred racing at Suffolk Downs, but it will create new economic and tourism opportunities for the entire region.”


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