Kopelman and Paige’s Jonathan Silverstein, who leads the firm’s Expanded Gaming and Casino practice, recently secured a victory for the Town of West Springfield in the first ever “surrounding community arbitration” regarding a Casino proposal by MGM Resorts, to be developed in Springfield. Under the Commonwealth’s Expanded Gaming Act, casino developer’s must enter into agreements with nearby communities that will experience significant adverse impacts as a result of the casino development. If the parties are unable to reach agreement, the issue is to be resolved through binding arbitration, pursuant to regulations adopted by the Massachusetts Gaming Commission.
After West Springfield and MGM were unable to agree upon the terms of a surrounding community agreement, they proceeded to arbitration before a panel of three retired judges. The parties submitted extensive briefings and evidence and appeared for a full-day arbitration, after which the arbitral panel unanimously found in favor of the town. The result is millions of dollars in additional payments to the Town during the course of the initial license term and the added benefit of many more millions of dollars in additional payments upon renewal of MGM’s license.
Highlights of the arbitration decision, including the additional payments over those in the MGM proposal, include:
- Up-front payments of $665,000 for traffic mitigation study and approximately $160,000 for consultant fees (as compared to the total up-front payment of $135,000 offered by MGM);
- Annual mitigation payments starting at $425,000, increasing each year according to the Consumer Price Index (as compared to total annual payments of $150,000 – with no annual increase – proposed by MGM);
- Annual mitigation payments will continue for as long as the facility is in operation (as compared to MGM’s proposal that all payments end after 15 years);
- A “look-back” study process, whereby the Town can seek additional compensation from MGM if impacts are greater than anticipated.