S
pringfield Mayor Domenic J. Sarno said Wednesday it remains the city’s stance that all contractual obligations under MGM Springfield’s host community agreement will be enforced.
According to city officials, MGM continues to owe $2.3 million to the city. The contractual payment has been delayed since April due to the coronavirus pandemic, but city officials said they are pleased with ongoing talks to resolve the matter.
“After this temporary deferment period, I will expect and will demand on behalf of our taxpayers that MGM Springfield honors their/our legally binding contractual agreements,” Sarno said. “We will continue our collaborative dialogue with MGM as well as the (state) Gaming Commission concerning the impact of the unprecedented public health emergency created by the COVID-19 Coronavirus pandemic on MGM’s obligations under the Agreements.”
On April 1, MGM made a payment to the city of $5,505,785.42, and characterized that amount as a partial payment toward the $7,780,376.32 owed under the host community agreement, Sarno said.
MGM Springfield President and Chief Operations Officer Chris Kelley said in April that the company would meet its obligations, MassLive reports.
“Collaborative and productive conversations with the City are ongoing,” MGM Springfield spokesman Jose M. Delgado said Wednesday. “We both understand the nature of the pandemic and how it has adversely impacted the hospitality industry. We look forward to continuing our dialogue.”
On March 19, MGM Springfield filed a notice of “force majeure” with the city, seeking relief from certain financial obligations due to events or circumstances “beyond the reasonable control” of MGM. It cited the Gaming Commission’s requirement for Massachusetts casinos to close due to the coronavirus.
Financial challenges have continued since the casino reopened in early July, officials said. The state requires casinos to follow strict guidelines around preventing the spread of the virus, including reducing capacity. Regulators last week allowed roulette to resume.
September gross gaming revenue reports from the state’s three casinos are expected to be released Thursday.
Sarno said his administration will “continue to work with all our businesses, whether large or small to help them stabilize.”
City Solicitor Edward Pikula and the city’s chief development officer, Timothy Sheehan, said they are satisfied with the ongoing talks with MGM Springfield and the Gaming Commission.
Various other obligations for payments from MGM Springfield have continued without interruption, city officials said.
The city receives $24 million to $25 million annually from MGM Springfield, including payments in lieu of taxes, community impact payments and development grants, according to the city.
In addition, the casino continues to make investments in Springfield, including a pledge of $16 million toward housing redevelopment at 13-31 Elm St.
“Look at what MGM has done in support of 13-31 Elm,” Sheehan said. “They stood up and made their investment and (remained) committed to it at a period of time when we were in a pandemic.”
The casino also plans to soon open a Wahlburgers’s restaurant on its campus.
While the city understands the financial hardships faced by MGM during the pandemic, it represents “a period of temporary revenue loss,” Sheehan said. The host community agreement, approved in 2013, is a long-term document, he said.
With the pandemic, “we need to be able to provide flexibility to provide that bridge during the period of public health restrictions that are impacting the casino’s bottom line, and work with them to get through this period,” Sheehan said.
The $960 million casino opened in August of 2018. It pumped $974 million into Massachusetts economy in its first year, according to a University of Massachusetts study released this week.
