MGM Resorts and Mayor Sarno Sign Host Community Agreement, Transmittal Letter
-Negotiated Agreement Calls for more than $25 Million in Annual Payments
-Mayor Sends Agreement to City Council for Approval
-July Referendum Anticipated
SPRINGFIELD, Mass., May 1, 2013 /PRNewswire/ -- With pen to paper, and after almost two and a half months of negotiations, MGM Resorts International (NYSE: MGM) 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."
- Upfront and advance payments, totaling $15 million to the City of Springfield during the construction phase including pre-payment of taxes for general city purposes as well as:
- $2.5 million to purchase equipment and to provide training for police, firefighters and emergency medical services personnel.
- $1 million to redevelop Riverfront Park.
- More than $25 million in annual payments once a proposed casino has opened for business. This includes tax payments as well as:
- $2.5 million to fund operating and other costs for police, firefighters, emergency medical services and education.
- $2.5 million for a Community Development Fund to be administered by the city to support early childhood education, higher education, libraries, health initiatives, and the betterment of the city and its residents.
- MGM Springfield will use its best effort to ensure that at least $50 million of its annual biddable goods and services will be prioritized for local procurement.
- Hiring preference given to Springfield residents with a total of 3,000 permanent jobs and 2,000 construction jobs.
- Commitments to local educational institutions for training and workforce development, as well as programs to assist, minority, disabled and the chronically unemployed and underemployed.
- MGM will underwrite, co-promote, book and schedule 12 entertainment events per year and spread them across MassMutual Center and Arena, Symphony Hall and City Stage.
- MGM will fund all traffic improvements described in its traffic study and in accordance with the Massachusetts Department of Transportation.
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.
Statements in this release that are not historical facts are forward-looking statements involving risks and/or uncertainties, including those described in the Company's public filings with the Securities and Exchange Commission. The Company has based forward-looking statements on management's current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, statements regarding the Company's expectations regarding the timing of the referendum and the ability to develop a casino in Springfield. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include effects of economic conditions and market conditions in the markets in which the Company operates and competition with other destination travel locations throughout the United States and the world, the design, timing and costs of expansion projects, risks relating to international operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions and additional risks and uncertainties described in the Company's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law.
About MGM Resorts International
MGM Resorts International (NYSE: MGM) is one of the world's leading global hospitality companies, operating destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage. The Company also owns 51 percent of MGM China Holdings Limited, which owns the MGM Macau resort and casino and is in the process of developing a gaming resort in Cotai, and 50 percent of CityCenter in Las Vegas, which features ARIA resort and casino.
For more information about MGM Resorts International, visit the Company's website at www.mgmresorts.com.
SOURCE MGM Resorts International
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