East Boston Guaranteed Millions in Boston Host Community Agreement

August 28, 2013
By
Mayor Tom Menino signs the casino agreement with Suffolk Downs.

Mayor Tom Menino signs the casino agreement with Suffolk Downs.

The long-anticipated host community agreement signed by Mayor Tom Menino Tuesday afternoon proved to be the most lucrative agreement signed to date in the state with several East Boston benefits announced – including a new youth center, a new senior center and $20 million of the annual impact fees going just to Eastie.

Overall, the City would be projected to get $52 million in annual payments – payments that include property taxes and impact fees – if the casino reaches its goal of $1 billion in gross gaming revenues.

“I have said from the start of this process that I wanted three things: A first-class, resort destination casino, an agreement that would benefit the people of East Boston, and a proposal that will be selected by the State Gaming Commission. We are well on our way to that and more,” Mayor Menino said at a press conference held following his signing of the agreement. “The agreement I have just signed has more revenue, more guaranteed jobs, and more protections than any other agreement in the region, and the Commonwealth.”

Most important to East Boston is an additional one-time community payment of $33.4 million that has been negotiated and would go directly to Eastie for use in projects that include:

• improvement to the Umana School

• the formation of an East Boston Neighborhood Business Program

• construction of a state-of-the-art youth and senior citizen community center

• improvements to LoPresti and Noyes Park.

Additionally, to continue mitigating the impacts of the casino on East Boston, a community trust has been set up that would receive guaranteed payments of $20 million annually just for Eastie projects.

While the City did tout the projections of $52 million annually, those payments are actually tied to the performance of the casino and could be less than that amount. However, the City said it would never receive less than $32 million annually.

For example, if the resort reaches its projected gross gaming revenues of $1 billion, the City would receive $52 million. If the resort were to reach $1.2 billion in gross gaming revenues, the City would receive $80 million.

On the flip side, if gross gaming revenues came in below $1 billion, the City would receive less than $52 million. However, the City has negotiated a floor payment of $32 million.

On the job front, there are 2,500 projected construction jobs. There are 4,000 projected permanent jobs at the completion date of the project, with 800 permanent jobs one year prior to opening.

In other Eastie news, Suffolk Downs has committed to spending $50 million annually on goods and services in Boston, with $5 million of that dedicated to Eastie businesses.

To ensure the project is completed in a reasonable amount of time that gives maximum benefit to East Boston and the entire Boston community, with the least amount of inconvenience for residents, the agreement commits to an early opening 14 months from start of construction, with a full opening after an additional 12 months.

A description of the project at the press conference included two distinct gaming areas providing 150,000 to 250,000 sq. ft. of gaming space. There would also be at least one World Series of Poker room, two luxury hotels with a total of 450 rooms, between 24,000 and 46,000 sq. ft. of meeting and entertainment space, between 1,700 and 2,600 sq. ft. of various dining spaces, and up to 30,000 sq. ft. of retail space (including a spa).

There would also be a seven-story parking garage with up to 2,600 spaces, valet for 460 vehicles and 2,100 surface parking spaces.

“We’re very confident that East Boston residents will think that the benefits of this agreement are comprehensive and address their concerns and we’re looking forward to engaging the East Boston community, as we have over the last several years, but engaging them on the specifics of the agreement,” said Chip Tuttle, chief operating officer for Suffolk Downs.

Said City Councillor Sal LaMattina, “This agreement will transform my neighborhood. It will save jobs for the people that work today at Suffolk Downs. It will provide jobs not to just people that live in my neighborhood. Many people have to work two jobs to support their family. This is a big day for my neighborhood. We also have an opportunity to plan ahead for the future of our neighborhood which I’m very, very excited about. At the end of the day the people in this East Boston neighborhood will decide if this is a good agreement and I think it is.”

That decision LaMattina alluded to is the host community agreement referendum vote, which is a tricky situation in and of itself.

The vote has to take place within 60 to 90 days from Tuesday. It is expected to be some time just prior to Halloween.

However, just who votes on it is at issue.

Currently, the law states that it would just be a vote of the ward of the City that only encompasses East Boston. Several mayoral candidates and others have recently been stumping for a vote that would encompass the entire city, something that would certainly threaten the success of the vote as it is believed many in far-flung neighborhoods like Jamaica Plain and West Roxbury oppose the casino.

That issue will be determined by the City Council, and that is a battle that will begin playing out almost immediately.

It will be a particularly interesting battle on the City Council as several of the City Councillors are running for mayor and might find pressure to go with a citywide vote. It will likely end up acting as a proving ground for casino politics leading up to the Sept. 24th Preliminary Election.

Suffolk Downs must submit a completed Phase II application to the Mass Gaming Commission (MGC) – complete with the signed host agreement and the certified results of a successful referendum vote – by Dec. 31st.

The MGC has said it would make a decision on the Greater Boston license by the end of April.

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