SPRINGFIELD — Faced with nagging concerns about their commitment to open a casino here, MGM Resorts executives on Wednesday afternoon tried to quell any lingering doubts by announcing that the company has raised its planned investment to $950 million, an increase of $150 million.
In a presentation to city officials and residents, the MGM executives pledged once again to follow through on their plan to turn 14 acres of the city’s tornado-ravaged South End into a massive casino and hotel complex, which many local officials say is a once-in-a-lifetime opportunity to revitalize the city
“We are committed to this city,” said Michael Mathis, an MGM executive in charge of the Springfield project. “In fact, we are now $150 million more committed.”“I wish it didn’t cost that amount. I wish we could do it for less,” William Hornbuckle, president of MGM, told the audience of about 250 people crammed into a theater. “But we will honor our commitments.” MGM’s plan for what would be the largest private development in Western Massachusetts history recently drew expressions of doubt from city officials and others, after the company disclosed its intention to shrink the size of the complex, scrap plans for a 25-story tower, and delay the casino’s opening until 2018. Changes in casino project raise questions MGM’s decision to scale back its casino underscores how close its budget is to falling below the state’s requirement.MGM’s pledge to increase its budget by about 15 percent comes in the face of stepped-up activity by the State of Connecticut to keep its gamblers at home by proposing a new casino near Hartford. MGM has said it is counting on about one-third of its customers coming from the Hartford area.
Wednesday’s presentation marks the third time in six weeks that MGM executives have appeared in Springfield to calm worries about their commitment. On two previous occasions, a coterie of top executives made the trek from the company’s headquarters in Las Vegas to deliver reassurances to the city.
For decades, Springfield has experienced a steady drain in factory and other jobs. Its unemployment rate is almost 9 percent, compared to a statewide unemployment rate of about 4.6 percent.
Ten years ago, with Springfield tottering on the brink of bankruptcy, the state came to the rescue, providing millions in stop-gap funding and appointing a five-member financial control board to help run the city.
Local elective officials are back in control of the city, including Mayor Domenic Sarno, who resoundingly won reelection on Nov. 3 and is among the most ardent supporters of the casino plan.
MGM promises to create about 5,000 construction and permanent jobs, and to pay $25 million to the city annually to compensate its residents for the extra traffic and other inconveniences a casino is expected to bring. Sarno has said that the casino is only the first part of a larger plan to spur economic development in Western Massachusetts.
The Massachusetts Gaming Commission awarded the license reserved for Western Massachusetts to MGM in June 2014. At that time, the plan included a 25-story, 250-room hotel; a parking garage; market-rate apartments; restaurants; retail stores; a cinema, bowling alley, skating rink, and spa; a pool and roof deck; and 125,000 square feet of gambling space with 3,000 slot machines, 75 table games, a poker room, and a high-limit VIP gambling area.
Since then, the tower has been dropped, the market-rate apartments moved to outside the complex area, and the sizes of the shops, bowling alley, and movie theater reduced. The new design does not significantly reduce the gambling floor.
MGM also announced last summer that it was delaying the opening of the casino for about a year because of nearby highway construction.
Hornbuckle said on Wednesday that almost all of the reduction in the size of the complex comes in space for casino staff. He blamed delays in construction for the increased cost of the project, which was first estimated in 2012. Since then, he said, there have been significant increases in labor and materials costs, while the opening date has been pushed back by a total of more than two years.
A persistent concern about the viability of a Springfield casino has to do with the plan by the two Native American tribes that operate Foxwoods and Mohegan Sun in Connecticut to build a new slots parlor just south of the Massachusetts state line to undercut the MGM proposal.
The tribes are sifting through five alternative proposals for such a casino and say they will announce a selection by Dec. 15. The plan for a third casino in Connecticut still needs approval from the state’s Legislature, which initially approved the plan last summer.
MGM executives have said the new design includes the full complement of 250 four-star hotel rooms that had been planned for the tower. They say that by flattening out the tower to six-story buildings, the new design is likely to increase pedestrian traffic on a street-level plaza.
The new design requires approval from the Springfield City Council and the state Gaming Commission.
MGM has already sunk $235 million into the project to purchase its state gambling license and the sprawling tract of land where the casino is to be built.
Sean P. Murphy can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .Follow him on Twitter @spmurphyboston.
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