MGM Resorts and Mayor Sarno Sign Host Community Agreement, Transmittal Letter
SPRINGFIELD (MA) May 1, 2013 – With pen to paper, and after almost two and a half months of negotiations, MGM Resorts International and the City of Springfield today marked the signing of a Host Community Agreement ("HCA") that incorporates more than $25 million in annual payments for Springfield should MGM win the Western Massachusetts operator's license.
At a ceremony this morning at the MassMutual Center, MGM Resorts and MGM Springfield President Bill Hornbuckle signed the agreement for MGM and Springfield Mayor Domenic J. Sarno signed a transmittal letter that accompanied the HCA to the Springfield City Council for its review.
Required under the 2011 Massachusetts gaming law, an HCA is a comprehensive document that determines the conditions for locating a gaming establishment in a community.
The HCA calls for MGM Resorts to make upfront and advance payments, totaling $15 million to the City of Springfield. The upfront payment will be distributed to the city in installments during the construction phase of the project. When MGM Springfield opens for business, the city will receive in excess of $25 million annually in payments.
Hornbuckle said, "MGM Resorts is very grateful to Mayor Sarno and his team for the confidence they have placed in MGM and for providing a respectful, rigorous and responsible process that led us to this day. We are happy to celebrate this milestone today, but we remain keenly aware that there is more work to do. We look forward to the continued dialogue and engagement with city officials and residents."
Mayor Sarno offered, "We have negotiated an agreement in which the citizens of Springfield are the winners. This has been a long and thorough process. MGM rolled up its sleeves and is ready to provide the city with a great opportunity for a brighter and stronger future. I urge the City Council to consider and ratify this encompassing agreement."
The Mayor's Office released a summary of the HCA yesterday when Mayor Sarno appeared with his Advisory Committee to announce that he had chosen MGM Springfield to move forward as the sole casino operator representing the City of Springfield as it continues its quest to bring a world-class casino resort and entertainment district to Downtown Springfield.
The HCA further requires the approval of the City Council before MGM Resorts may request a referendum, also required for advancement. If approved by Council in mid-May, MGM Springfield and City officials anticipate a mid-July referendum.
MGM is hoping the agreement will serve as the foundation for a new partnership as it joins with the City of Springfield in the competition to win the sole Western Massachusetts casino license for Springfield.
Mayor Sarno added, "The competition to win this coveted license is not happening inside Springfield. It is happening throughout Western Massachusetts. MGM Springfield has the unique characteristics to satisfy the criteria set forth by the Massachusetts Gaming Commission. A City of Springfield and MGM Resorts partnership creates the strongest competitive edge for Springfield to win."
Hornbuckle added, "The Western Massachusetts license presents an extraordinary opportunity for MGM, Springfield and the entire region. MGM Springfield looks forward to presenting its vision to a larger audience, and in the not too distant future, to calling Springfield home."
Now that city officials have completed the HCA negotiations with MGM Resorts, the full agreement must be approved by the Springfield City Council and then by Springfield voters.
Upon a favorable referendum, MGM and Springfield would advance to potentially compete before the Massachusetts Gaming Commission with Mohegan Sun in Palmer and Hard Rock in neighboring West Springfield. Both Mohegan Sun and Hard Rock have filed applications with the MGC. Neither town has announced an HCA or has moved to the referendum stage.
MGM Springfield is proposed for 14.5 acres of land between Union and State streets, and Columbus Avenue and Main Street. Since unveiling plans in August to develop MGM Springfield, an approximately $800 million world-class residential, retail, dining and entertainment district, MGM Resorts continues to demonstrate a strong commitment to the entire City of Springfield.
About MGM Resorts International (NYSE:MGM)
MGM Resorts International (NYSE: MGM) is one of the world's leading global hospitality companies, operating a peerless portfolio of destination resort brands, including Bellagio, MGM Grand, Mandalay Bay and The Mirage. In addition to its 51% interest in MGM China Holdings Limited, which owns the MGM Macau resort and casino, the Company has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in three other properties in Nevada and Illinois. One of those investments is CityCenter, an unprecedented urban resort destination on the Las Vegas Strip featuring its centerpiece ARIA Resort & Casino. Leveraging MGM Resorts' unmatched amenities, the M life loyalty program delivers one-of-a-kind experiences, insider privileges and personalized rewards for guests at the Company's renowned properties nationwide. Through its hospitality management subsidiary, the Company holds a growing number of development and management agreements for casino and non-casino resort projects around the world. MGM Resorts International supports responsible gaming and has implemented the American Gaming Association's Code of Conduct for Responsible Gaming at its gaming properties. The Company has been honored with numerous awards and recognitions for its industry-leading Diversity Initiative, its community philanthropy programs and the Company's commitment to sustainable development and operations.