Springfield City Officials Expect MGM to Honor its Obligations

Springfield city officials continue constructive talks with MGM Springfield to collect the outstanding part of the April payment. Under the host community agreement, the casino property still owes around $2.3 million to the city.

MGM Springfield had to pay $7.78 million, but on April 1, the casino made a payment of only $5.5 million, stating it was only a partial payment. Chris Kelly, President and COO of MGM Springfield said by that time that the casino would meet its obligations in full.

MGM Springfield Declared Situation beyond Its Control

In March, however, MGM Springfield sought relief from certain financial obligations, filing a notice of “force majeure” with the city and claiming circumstances beyond the casino’s reasonable control influenced its ability to meet all obligations. The casino pointed to the requirement from the Massachusetts Gaming Commission (MGC) for casinos to close down to help curb the further spread of the coronavirus.

Jose Delgado, an official spokesman for MGM Springfield noted this week that the talks with city officials continue on a collaborative and productive basis, as both parties have a clear view of what the nature of the coronavirus infection spread is and how it impacted the entertainment and hospitality industry.

Casino Struggles Continued After Re-Opening

Springfield Mayor Domenic Sarno noted that city officials expect MGM to honor its legally binding contractual agreements, pointing out that the constructive dialog with both the casino and the MGC regarding the impact of the coronavirus pandemic on MGM’s obligations would continue.

Since its reopening in early July, MGM Springfield continued to struggle following strict guidelines for operation, but mainly due to the limit imposed on its capacity.  Besides, certain games such as roulette and craps were not allowed to resume by the state regulator until last week when the MGC finally signaled their return.

MGM Springfield Contributes Directly and Indirectly

MGM Springfield contributes to between $24 million and $25 million to the city, according to official information from the city. The amount includes payments in lieu of taxes, community impact payments and development grants.

During its first year of operation, the $960 million casino property which opened in August 2018 contributed to the Massachusetts economy to the amount of $974 million, a recent University of Massachusetts study revealed.

Besides the annual contribution in terms of taxes and other payments, MGM Springfield continues with its capital investment program regarding a housing redevelopment at 13-31 Elm St, where the casino is expected to pump $16 million as per its own pledge. MGM Springfield also plans to open on its campus a Wahlburger’s restaurant.

City officials noted they are content with the ongoing dialog with both the casino and the regulator, believing it was only a temporary situation as MGM had been honoring other various obligations to the community without interruption.

Leave a Reply

Your email address will not be published. Required fields are marked *