Ameristar Casinos faces crossroads in quest for Western Massachusetts casino
Published: Saturday, September 22, 2012
Ameristar Casinos faces a dilemma as it seeks to win approval for a casino in Springfield.
The city of Springfield, in a process kicked off on Friday, is requiring companies to pay $400,000 non refundable application fee to the state in order to advance in the city's casino selection process.
If Ameristar does pay the fee and is rejected by the city of Springfield, then it loses $400,000. If it doesn't pony up by a December deadline, the company apparently would be out of the running for a city casino.
Troy A. Stremming, a senior vice president with Ameristar, said Ameristar fully intends to adhere to the city's bidding procedures and to move ahead in the process. Stremming said the company fully intends to submit the non refundable fee.
"We'll make a sound business decision," Stremming said when asked about paying the state fee.
MGM Resorts International, which has already paid the $400,000 fee, is proposing a casino for 10 acres in the South End of the city's downtown. Penn National Gaming is planning a casino in the North End. Ameristar also is competing with Mohegan Sun of Connecticut, which is proposing a casino for Palmer.
Ameristar, which operates eight casino properties in other parts of the country, paid $ 16 million to purchase a 41-acre site in Springfield on Page Boulevard and Interstate 291 for a planned gaming resort.
Stephen CrosbyThe gaming commission plans to use the fee to subcontract with a private company to investigate the finances and ethics of casino applicants. A total of $50,000 of the $400,000 would be split among potential surrounding and host communities to negotiate agreements with casino companies to mitigate the effects of resorts. The commission also is reserving the right to increase the fee if necessary.
Springfield Mayor Domenic J. Sarno and his top economic development official, Kevin E. Kennedy, are pledging to be fair and objective in choosing a casino for the city.
According to state law, the Massachusetts Gaming Commission would award licenses for up to three casino resorts in different regions including one for anywhere in the four counties of Western Massachusetts.
By Jan. 25, Sarno and administration leaders plan to choose a casino or casinos for negotiating agreements for specific sites. Those agreements would be sent to voters for their possible approval in June. If voters approve, casinos could seek licenses from the gaming commission.
Stremming has said that all casino companies should be allowed to negotiate agreements and be on the ballot. He has said the city might stand a better chance of winning the Western Massachusetts license if it finalizes agreements with multiple companies.
Administration officials in Springfield said that if they negotiated agreements with all companies and agreed to put them all on the ballot, it might create voter confusion, encourage weaker proposals and consume a lot of city time in reviewing multiple applicants when only one would be licensed by the state.
Some political and business leaders in Springfield are pushing for a downtown casino, seeing the project as a catalyst for a revival. Kennedy, the chief development officer for Springfield, has said a casino would be a " game changer " for the downtown.
Ameristar's competitors in Springfield -- MGM and Penn National -- have also forged partnerships with two of the city's leading businessmen.
Paul C. Picknelly, president of Monarch Enterprises in Springfield and a hotel owner and operator, is apparently working with MGM. He has declined comment.
His brother, Peter A. Picknelly, chairman and CEO of Peter Pan Bus Lines, is a teamed up with Penn National, which is proposing a casino partly on land owned by the bus company. Penn National is also wrapping up negotiations for an option to buy The Republican's Main Street building and property, as well as the newspaper's eight vacant acres on the Connecticut River.
Paul E. Burns, a member of the Palmer Town Council and a supporter for a casino in Palmer, said it seems clear to him that Ameristar is not going to win the city's approval for a casino. Ameristar is a new player in town and lacks the allegiances and alliances of the Picknelly brothers, Burns said.
Stremming said he is positive that Ameristar has the "premier site" for a casino in Western Massachusetts, based on access, its plan for handling traffic and its 41-acre footprint, which is about four times as large as MGM's 10-acre plan.
"We still think we're going to do a great job of proposing the best resort for Western Massachusetts," Stremming said.
Stremming also may have irritated the Sarno administration when he expressed concerns about a possible conflict with the city's hiring of the Chicago law firm of Shefsky & Froelich as its casino consultant.
Stremming said he was concerned that the law firm is a registered lobbyist in Illinois for Penn National Gaming and MGM Resorts.
The Massachusetts Ethics Commission, in an opinion sought by the law firm, ruled last week that the law firm is not violating the state's ethics laws.
According to the seven-page opinion by David A. Wilson, a deputy chief at the Ethics Commission, the consultant's lawyers in Springfield are specified as "special municipal employees" under a city ordinance that provides the designation to part-time lawyers hired under a contract.
Two key sections of the conflict law apply less restrictively to those part-time or unpaid municipal officials who have been designated as special municipal employees, according to state law.
In an interview on Thursday, Stremming referred to a section of the opinion that says "a reasonable person" could possibly conclude that the law firm's private relationship with MGM and Penn National in Illinois could improperly influence the firm and give the two companies an advantage in Springfield.
The Ethics Commission said this potential appearance of a conflict could be avoided if the law firm provides written disclosure of the facts to the city. The firm said it has made the disclosure.
Stremming said his opinion doesn't matter and that Ameristar will work with whatever consultant is hired by the city.
The five-member Massachusetts Gaming Commission is scheduled to discuss the Ethics Commission opinion on Tuesday during its regular meeting in Boston. Chairman Stephen P. Crosby has also said he doubted the city's judgment in hiring the law firm, but Crosby has refused several requests for comment since the Ethics Commission issued its opinion on Wednesday.
Crosby has said he is concerned with the appearance of a conflict. Crosby said the commission has broad authority to oversee the integrity of the casino licensing process. Last week, before the Ethics Commission issued its opinion, he declined comment on what action he might recommend if the ethics agency decided to clear the consultant of a violation of the conflict law.
http://www.masslive.com/politics/index.ssf/2012/09/ameristar_casinos_faces_crossr.html
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