That’s essentially the headline in today’s Globe. The casino in question happens to be located in Bangor, Maine. But you can bet (ha – see what I did there?) that similar headlines will be popping up in our own state. From today’s story:
The slot parlor opened to much celebration, and racked up huge revenue at first. The new casino era looked bright, and a state that had long debated whether casinos were a good idea appeared to have locked in a steady stream of tax dollars.
But then business fell off, and before long, the owner of the casino was lobbying for a substantial tax break.
Yeah, that’s pretty much exactly what is already happening at Plainridge Park, the slot barn that just opened in MA. No indication yet that the owners are looking for tax relief. But, the place has only been open for a couple of months. There’s plenty of time for that.
Here’s the bigger issue, as it relates to MA.
[S]ome casino observers are saying that what’s happening in Maine could be a harbinger of what could happen in Massachusetts if its first casino continues to see a decline in its revenue, especially with as many as four more casinos possibly opening in the state over the next few years.
Casino operators, facing fierce competition, will likely argue that they will go out of business without tax relief from state and local governments, said the Rev. Richard McGowan, a Boston College professor and specialist in casinos.
“I can’t imagine the casinos in Massachusetts not asking for tax breaks after they’re up and running,” he said.
Another casino specialist, Denis P. Rudd, a Robert Morris University professor, pointed to online gambling as a growing threat to casinos, especially daily fantasy sports websites like FanDuel and DraftKings.
“Online gambling is eroding the customer base of casinos,” Rudd said. “There are only so many customers to go around.”
Too many casinos are set to open in Massachusetts. Competition is already intense from RI and CT, and as we know, there’s the possibility of a new, even bigger one coming in CT just south of Springfield. Furthermore, online gambling is here to stay. Fantasy football and similar sports-related sites will probably be regulated, but they’re not going away, and if Treasurer Goldberg and Globe columnist Shirley Leung have their way, the lottery will be hopping aboard that train shortly. Does anyone really think that, with all of that, gamblers are going to flock to Everett to bring in the extraordinary profits that have been forecast for that and other local facilities-to-be?
Here’s the lawyer for the Bangor casino, lobbying for a tax break:
“It’s not good times for the casino industry,” Jonathan A. Block said at the hearing, according to a videotaped recording posted on the city’s website. “The bottom line is that the supply of casinos is exceeding the demand.”
New casinos are opening in the Northeast “at a very rapid pace,” he said, driving down the value of existing ones, like the 10-year-old Hollywood [in Bangor].
It’s just impossible not to foresee that pattern repeating itself almost precisely here, as new gambling facilities open over the next few years. Gambling dollars are not unlimited, and never have been, despite the apparently contrary view of lawmakers desperate for revenue sources that don’t involve their actually taking any responsibility for anything. Not an encouraging situation.
…when it refers to MA slots and casinos. I’ve never been passionately opposed to gambling in MA (maybe one casino). But I voted no on the ballot because the economic growth/jobs argument was/is hogwash. These folks know that they are investing in a finite market (suckers) at a time when competition was spring up all around them. So they are big boys and girls who will deserve to lose millions and can’t expect me and other to bale them out.
They can expect a bailout. Like I told some rep who assured me he would be against any bailout of the casinos, if you are for the casinos because of jobs then why wouldn’t that also be your reason for a bailout? There isn’t a good answer.
And they’ll say like it’s a bad thing.
It will always be [grrrrrrrr, kbusch] framed as saving the service sector jobs.
His needy commercial swung a lot of undecided voters with his tales of Springfield residents needing the jobs.
So now – was he used, or complicit?
I personally don’t think Mayor Sarno is a very competent mayor except that he knows how to the average voter feel good when he talks to them by remembering some personal detail about their life that makes him seem like he’s connecting. I think that he is easily swayed and influenced by other city employees (like department heads), and there are some sketchy characters on the fringes whose involvement has only been alleged without any evidence or even rumors of direct involvement (as in, hey, the casino *must* be bribing the city officials because that’s just what we expect is going on).
So that said, I don’t think Sarno is corrupt, or he chose the casino for nefarious reasons. I think that he truly believed that 3,000 jobs in the city and an $800m development project is a lot better than what we have had for decades – nothing.
I know that Tom says that the proper analogy for casinos is “poison”, but that implies that the impact will be immediate and fatal. It won’t. The casino will be a general long-term drain on the region. It may even help the area in the immediate vicinity of the casino by bringing new people into the city – adding some new restaurants, bringing in some concerts, bringing some retail back. Yes, some other regional businesses – middle of the road restaurants, for example – will fail as the casino brings in their customers – but those businesses don’t exist in that neighborhood, and generally aren’t found in Springfield itself. Generally speaking it doesn’t make sense to try and prevent the decline of old restaurants by limiting new restaurants.
I think that the introduction of the casino into the area won’t have as big an impact as the introduction of Wal-Mart or national retail chains – which is basically the same economic concept, churning money around locally while taking a cut of it out of the region instead of keeping it with local shopkeepers. I suppose you could argue that if people feel that they are more entertained by spending $50 in a casino rather than spending $50 at a movie, in the end the economy takes the same hit by losing that $50 to a western city.
I don’t think that Springfield is going to get materially worse with a casino in it and I think that with the original project proposed, there was potential for improvement. I say this because I know how bad things are, how dead the economic market is out here.
I think the question would be, would you rather die next week by starving to death, or would you rather eat mercury-tainted fish and die in ten years? That’s the choice that we were given. The state has shown almost zero willingness to come up with better options for the city. Yes, there have been some small-level initiatives especially under Governor Patrick, but I really thought that under eight years of a Democratic governor with a Democratic legislature, that things would have been better. I think that Deval Patrick reduced general government lottery aid to Springfield more than the 8 preceding years of Republican governors.
When the MGM poobahs dropped into Springfield last week to reassure the locals that they are still committed to “bringing the MGM brand of entertainment to western Massachusetts,” that the casino downsizing they have in mind is really quite minor, and that they’re sorry for their poor communication about that downsizing, television station WWLP chose this headline for its story:
MGM CEO Announces the Springfield Casino is Not Going Anywhere
When the shady casino operators make it clear they have no intention of rebuilding your downtown to the extent they promised, that’s when you should walk away. The scope of the project was its major (I’d argue only) selling point.
Take away that scope, and they possibly wouldn’t have been chosen? Start over, or pull out all together.
MGM already relocated dozens of businesses from the area and razed a 15-acre site in the heart of a downtown that hasn’t seen new construction in several decades. How do you walk away from that?
All the stuff the government had to do to clear the decks for something new is done. If MGM can’t deliver what it promised, and it can’t, then pull the plug and engage developers, who now have the opportunity to work off a blank slate. Downtown development opportunities like that do not exist pretty much anywhere else. It won’t happen overnight, but a better project will take its place. Springfield has got to stop making terrible decisions based on its low civic self-esteem.
I understand what you’re saying that the area is now “ready for development”, but the potential of Springfield’s development situation is much worse than I think you realize.
I was mistaken in saying that there has been no new construction in decades downtown – about 7 years ago, a developer razed a closed church on the skirts of the casino zone and erected two buildings – a four-story office building and a smaller retail building. Both have plenty of parking, both are brand-new, both are within a couple hundred feet of Route 91 on/off ramps. The four-story building is about 33% rented and the smaller building has been vacant its entire seven-year existence.
There are plenty of “empty canvases” in downtown Springfield. The overwhelming perception of the downtown is negative. Perception, not reality, but the perception becomes reality when everyone believes it. Economic activity there has been steadily shrinking for a long, long time.
I don’t think I’ve met too many people who wanted _gambling_ downtown. They voted in favor of 3,000 construction jobs, 2,000 permanent jobs, a movie theater, a bowling alley, a new hotel, new retail, new restaurants, market-rate apartments, 12 concerts per year, and the promise of tens of thousands of daily visitors with the hope that the perception of the downtown would change to one of a thriving vibrant place, and that would spill over into developing some of the surrounding areas.
People voted for this:
http://www.mgmspringfield.com/images/springfield/rendering-1.jpg
Instead of what it currently looked like after being struck by a tornado in 2011:
https://www.google.com/maps/@42.0998062,-72.5853819,3a,75y,296.74h,81.87t/data=!3m6!1e1!3m4!1sTEu5oPCFqEHXktkdywJd2A!2e0!7i13312!8i6656
The city doesn’t have revenue to do anything worthwhile to get things going. We’re trying to tread water but are slowly drowning. Without state aid our mandated Foundation Budget exceeds the entire Tax Levy Ceiling permitted under Proposition 2.5. Think hard about that for a minute. Just the schools exceed the amount of money we can raise via taxes under state law. Our general government “cherry sheet” money has been frozen for about a decade. We have been at the levy ceiling for about 3 or 4 years now, so our property tax levy is decreasing as our expenses increase due to inflation.
I didn’t vote for the casino – but I understand why people did. It’s hard to convince someone not to eat rotten food when they haven’t eaten in a month
Shipwrecked sailors die from drinking sea-water because they are already dying of thirst. Eating poison doesn’t help the starving man or woman.
The casino was NEVER a viable option. Sadly, too many legislators and media reports lied about that.
I like the sea-water analogy a lot! But in this case I think the narrative is more complex (and maybe grubbier), as follows.
Casinos create winners at the expense of losers. The impact on the region, and some sectors, is negative, but Springfield believed they had a deal that made the city one of the winners. (PT Barnum had a saying about that.)
Not so, obviously, but it could have been structured that way.
Got friends and family in the area. I understand the desperation, but decisions made out of desperation almost always backfire. MGM is now telling the city it won’t deliver what it promised. Perhaps more than anywhere else in MA Springfield needs to be involved with outfits that can deliver on their promises.
What Springfield hasn’t tried is having higher standards. That doesn’t cost a dime. Maybe the city can’t do a lot, but it can start making that what it does gets done well. As the scope of the MGM project shrinks, what you’l be left with is a tawdry casino in a struggling city. The hotel is gone, the market rate apartments are going. It never was going to draw tens of thousands of daily visitors. That was a pipe dream.
I’ll add that if there really is a regional demand for new retail and restaurants in downtown Springfield, then someone surely will be willing to build that without a casino attached. Casinos aren’t built on the model of leaving money in their customers’ pockets to go spend outside the casino. Casinos don’t invigorate neighboring businesses much beyond strip clubs, pawn shops and bail bondsmen. If you want a vibrant, bring-the-family downtown, then Springfield is headed in the wrong direction.
The major problem with downtown Springfield is that there aren’t a lot of people down there. It has good infrastructure, and plenty of places for businesses, but the perception is that it isn’t safe, and the lack of regular people there fuel that perception.
A vibrant downtown in the central city in the region would allow many things to occur in the region. Think of Springfield as the hub to the suburban spokes. Yes, you can build a nice restaurant in a suburb, but due to the distribution of the suburbs, people don’t drive from one spoke to another to give their demand to that restaurant.
If the nice restaurants were in the hub, with people traveling in, that amplifies the economic possibilities. Instead of that suburban restaurant surviving from its local suburban customers, it is sustained by demand from the region.
The thing about the casino that people have been focusing on is that bringing tens of thousands of people downtown each day would fight the perception of downtown being dangerous. Remember, the design of the casino is supposedly “outward facing” – not a box, like the Plainville slots. The restaurants and retail are all along Main Street, so you can enter either from the casino or from the street. Likewise, you can exit them if you want to visit a non-casino property across the street.
Will that work? Not sure, but it is better than the “closed box casino” design that is everywhere else.
Having higher standards hasn’t worked very well. It also results in a downward spiral, as each storefront goes dark, the amount of demand at the other storefront lessens. As an example, a pub near the casino closed last year because the owner said he wanted to try and attract a higher-class tenant. His storefront has been vacant for over a year; there is no pub to go to before a downtown event, and it gives the perception that the downtown is much more dead than it was before it closed.
I suggest that absence of people in downtown Springfield is a symptom, rather than a problem. Very real, of course, and a key link in the vicious spiral into decay that you describe.
I get that the casino proposal looked appealing, promoters are very skilled at that. I don’t believe the promises were ever real, and in my view the reality now unfolding demonstrates that sad fact.
Higher standards, in the absence of significant government investment, aren’t enough. It seems to me that the sort of things that work include:
– Urban enterprise zones (in the context of other changes)
– Direct government investment in building and/or renovating housing and small businesses
– Direct government investment in transportation infrastructure
– Indirect government investment through tax incentives, credits, and so on.
A vibrant downtown will only happen when people LIVE downtown. Restaurants, shops, grocery stores, hardware stores — the lifeblood of “vibrancy” — only happen when patronized by people who live there. A major source of downtown visitors, in a healthy downtown, is friends, colleagues, and relatives of people residents who come downtown to literally VISIT someone. Restaurants need regulars, and most regulars live and work nearby. Downtowns filled with multi-story big-box office buildings may look busy during the day, and they are deserted and barren wastelands at night. “Destinations” like a casino, concert venue, or stadium may create an illusion of prosperity in the surrounding block or two on game day, but they do not build a sustainable vibrant city.
Springfield needs direct, significant, and immediate help from the legislature. Without that, efforts to revitalize it strike me as futile.
That is sustainability 101 and it’s why smart growth works. Any successful development plan needs to leverage people. People who live in the downtown area and keep it active would help attract others from the suburban communities. More people > more neon. I’ll add that Springfield could find itself in a sweet spot in the MA housing market. There’s a lot of Millennials who can’t pay the freight to live in Boston. If Springfield got aggressive about housing development, it could attract a generation that can breathe life back into the city.
Yes, I agree with you that a vibrant downtown needs government investment. That is precisely the issue here – as the private investment left downtown over the years, the only government money available for investment came with massive strings – low income housing.
About ten years ago a study was performed and they found that something like 80% of the housing in Springfield’s downtown was restricted as low-income. That is a huge part of the issue, and why people saw MGM as the only path out – because in order to counter that weight, you need something equally large.
It is very difficult to incrementally build housing downtown that is not either formally low-income (because of tax credits) or informally low-income (because anyone with higher income would not choose to live in an area that is 80% subsidized).
It is clear enough that MGM can’t and won’t fulfill its promises. There is no viable alternative except to terminate the contract with MGM, for cause. However bad the consequences of that are, they are less painful then consequences of attempting the impossible. No deal is better than a bad deal.
Playing the lottery is NOT a viable financial strategy for an individual, no matter how desperate that individual is. Relying on casino gambling is similarly NOT a viable financial strategy for any Massachusetts city or town, no matter how desperate that city or town is.
The city of Springfield exemplifies the requirement for increased state investment in our struggling cities and towns. That investment requires raising taxes.
The desperation of Springfield demonstrates the class warfare that our “Democratic” legislature has been practicing for years if not decades. The legislature has chosen to plunder the poor and deprive cities like Springfield of desperately needed investment rather than raise taxes on wealthy Massachusetts residents. The reliance on lottery and casino gambling revenue is just another aspect of this exploitation of the poor and desperate.
Bob DeLeo still asserts that no new taxes are needed. He is lying.
Not true. the best deal is the one on the table ….
Yeah, sometimes aphorisms conflict.
Deal with it.
Hey tom I’m just having a little fun that’s all. Don’t take it personal.
I find your comments to be very amusing … and it’s a nice break from the day to day grind. Keep it my friend : )
No problem.
Actually, when I look at the two in this case, they don’t really conflict. It seems that in Springfield:
– The MGM deal is the best deal on the table,
– The MGM deal is a bad deal, worse than no deal.
Sounds to me as though the learning is to walk away from the table with no deal.
There is no escape from the reality that Springfield, along with the other gateway cities of Massachusetts, requires MASSIVE state investment.
Charlie Baker and Bob DeLeo are lying to us when they claim that no new taxes are necessary.
Try this one it’s a guaranteed laugh …
Hey everyone, this is MA – When is the Speaker of the House NOT lying to us, (or under federal investigation) …. LOL ho ho ho
Careful though … it may earn you the distinction of being locked away in some secret FBI file ; ) LOL
Q: When is Bob DeLeo NOT lying to us?
A: When his lips aren’t moving.
ba-da-boom.
We knew this and we argued this already. Smart policy makers were aware this would be a disaster. Thankfully, we have an attorney general committed to holding their feet to the fire. It’s unfortunate to see Deb Goldberg and others doubling down on a bet that hasn’t paid off.
They should just rename her the government sponsored boondoggle columnist, those are the only “businesses” she seems to endorse. Next thing she’ll be endorsing a monorail to Shelbyville!
Don’t Laugh.
…until they can’t survive in it. I say that if the free market dictates that these casinos go under then let it be so.
Even Wynn openly admits that the only one who wins at casino operation is the owner. He is painfully blunt about it. And yet, our voters and our legislators….and the rubes who go to casinos….all think that they will be the exception.
…and it gives me no joy to say “I told you so.”