Surrounding community deals impact Springfield’s casino cut

Artist's rendering of the proposed MGM Springfield casino, including the now-abandoned plan for a 25-story glass tower on State Street. The elimination of the glass tower is part of what the city council has to vote on.

SPRINGFIELD, Mass. (WWLP) – Now we know MGM Springfield’s surrounding communities. The Massachusetts Gaming Commission designated Longmeadow a surrounding community on Tuesday, while Northampton’s and Hampden’s petitions were denied.

MGM is paying for 100 percent of these agreements, but the 22News I-Team discovered it will cost Springfield money.

MGM has signed six surrounding community agreements already; Holyoke, Agawam, Chicopee, Wilbraham, Ludlow and East Longmeadow. West Springfield has also been designated a surrounding community, but has yet to reach an agreement with MGM.

So far, MGM will be paying $450,000 up front to those communities, but they still are negotiating with Longmeadow and West Springfield. If that number goes above $500,000, then MGM and Springfield will split any cost above the cap 50/50. It won’t come out of Springfield’s pocket. It will come out of Springfield’s cut.

Although, in annual surrounding community payments the city is already losing potential revenue every year. The annual cap for surrounding community payments was also $500,000. MGM has already agreed to pay $685,000 a year for 15 years to its surrounding communities. So after Springfield’s 50/50 split, the city will receive $92,500 less per year than it could have in its host community agreement.

That number will only go up. West Springfield and Longmeadow both have to sign an agreement, and if they get paid more than Agawam or Chicopee, Agawam’s and Chicopee’s annual payments will automatically be matched to the highest annual fee.

This agreement is in Springfield and MGM’s host community agreement in Exhibit D.

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