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MGM’s Springfield casino is helping spur more investment in new housing downtown as the neighborhood awakens from a long slumber.
Scrappy Springfield needed a savior after the deadly, 2011 twister that ripped through downtown, killed three people, and wrecked hundreds of buildings.
Instead, it got a casino.
Nearly 18 months after it opened its doors in downtown Springfield, it’s pretty clear MGM’s nearly $1 billion casino is not the world–transforming game–changer boosters claimed it would be.
The casino is nowhere close to delivering the kind of revenue – and tax payments – state officials had banked on, with money from its gambling operations having failed to meet early, heady projections.
That said, the massive gambling and entertainment complex has put Springfield, one of the state’s poorest cities, back in the game.
$55M Project Coming
And in a sign Springfield is gaining some traction from the MGM operation, city officials are gearing up to announce a financing deal for a second major downtown apartment project.
The pending deal would pave the way for a $55 million renovation of Court Square’s historic and vacant Elm Block, which sits across the street from the casino, into apartments and retail space.
Under the deal, Winn Development and OPAL Real Estate will build out 74 apartments in the building, mostly market–rate units plus 14 subsidized ones.
MGM is pitching in $11 million in equity, along with another $5 million in financing, while state housing officials are likely to pitch in with some additional assistance of their own.
City and casino officials announced the details of MGM’s contribution at a Massachusetts Gaming Commission last week.
Now all that remains is for the deal to actually get signed, seal and delivered, something that has proven a bit elusive. City officials touted news of a pending agreement this time last year only to have to put the whole thing on hold.
Springfield Mayor Domenic Sarno has already fired off a press release touting the pending deal, so the second time may very well be the charm for the Elm Block.
But it’s actually just the second market rate apartment project slated for downtown Springfield since the casino opened its doors in August 2018.
The Davenport Co., a local developer, kicked off construction last year, converting the historic downtown Willys-Overland building, home to a long-defunct, turn–of–the–century car company, into 60 loft-style apartments.
Davenport snapped up the building, which had been vacant since 2012 after being damaged in a gas explosion, for $450,000.
That’s about what it costs to buy a lot for a single-family home in the typical Boston suburb.
More Events, Entertainment Eyed
Timothy Sheehan, Springfield’s new economic development chief, said the city is also exploring ways to leverage the MGM casino to lure more conventions to the city’s MassMutual Center as well.
Las Vegas long ago showed the synergies between casinos, entertainment and the convention business, so it’s a shrewd move.
One improvement on the table is simply making it easier to walk between the convention hall and the casino, which right now requires a block and a half schlep despite the buildings being spitting distance from each other.
Scott Van Voorhis
Fortunately, there may be a rather simple solution to this problem, one that would require the activation of a new but little–used entryway at the convention center that’s closer to the casino.
MGM is also taking steps to turn around flagging revenues at the casino, with a new business plan that meshes nicely with the city’s efforts to bring downtown to life.
Departing CEO Jim Murren recently flew into town to talk up MGM’s new push, which involves bringing in more concerts and comedy acts, which have been shown to boost gambling revenue and other spending.
MGM and Springfield officials are hoping to bring in more big events like the Red Sox Winter Weekend, which the casino and the city’s convention hall hosted in late January to mark the unofficial start of the 2020 baseball season.
The event, along with a basketball tournament at Springfield College, enticed more than 20,000 people to make the trek downtown.
The casino and City Hall are also starting to explore ways to bring additional retail development downtown as well, Sheehan noted.
Springfield’s Back in the Fight
Downtown Springfield is still downtown Springfield, grappling with the same challenges that many older, ex-industrial cities face as they reinvent themselves.
But the MGM has helped get Springfield off the mat and into the fight again.
The millions in annual in payments MGM is forking over to Springfield provide financial stability, while the casino and its myriad restaurants and entertainment venues providing a major attraction for a downtown that wasn’t on anyone weekend destination map before.
MGM made a billion-dollar bet on Springfield. Now developers, after having written the city off, are stepping up, making their own bets on the revival of a great city.
And while it’s not quite the game changer some had hoped for, it’s a mighty big step in the right direction.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
