Boston,Wynn Come to Terms on Casino

February 4, 2016
By

By Seth Daniel

In the end, it was Mayor Martin Walsh and Wynn CEO Steve Wynn who got down to the nitty gritty – successfully negotiating directly with one another all last week on a Surrounding Community Agreement (SCA) for Boston that has some accommodations for Charlestown, including mitigation money for traffic and direct mitigation payments of around $2 million annually.

Another piece of good news come with the prospect of removing the once-contentious Boston Water & Sewer Commission (BWSC) sludge plant on Alford Street. More importantly for all sides watching the project, however, is that the agreement drops all lawsuits and appeals between the two parties, allowing the project to proceed to construction in May unfettered by court challenges.

The agreement does have to be approved by the Massachusetts Gaming Commission (MGC) before it becomes official, and discussion of the Boston agreement is on the MGC’s agenda for today, Feb. 4. Approval of that agreement, which does include dropping the lawsuits against the MGC, could come as soon as today, Feb. 4.

“The Commission is very pleased to receive news of a resolution between the City of Boston and Wynn Everett,” read a statement from the MGC. “As we had indicated as part of Wynn’s licensing agreement, the Commission strongly advocated for ongoing discussions between the parties and remained hopeful for a mutual agreement. The Commission looks forward to reviewing the details of the agreement and views this development as significant progress toward the awaiting jobs and economic development for the Eastern Mass region.”

The agreement announcement came just before 8 p.m. on Wednesday night, Jan. 27, after reports had been fluttering around since last Monday morning that an agreement was in the works between the two one-time enemies.

The overall agreement totals to $368 million in benefits to Boston, with $68 million in mitigation and traffic funds, $20 million annually for local businesses over 15 years and the potential to create a new open space park on the waterfront where the BWSC Materials Handling Facility.

“This agreement represents the largest community benefit to date offered by Wynn Resorts or the Massachusetts Gaming Commission to the City of Boston,” read a release from Boston. “The Surrounding Community Agreement was negotiated directly between Mayor Walsh and Wynn Resorts Chairman and CEO Steve Wynn.”

In Charlestown, the annual $2 million community mitigation payments over 15 years were initially pledged to stay in the Town by Mayor Walsh. In a Boston Globe editorial, Mayor Walsh said he would not spread out the annual payment throughout Boston, but would spend it “exclusively” in Charlestown.

The Mayor’s Office did not return a request to comment on that or confirm it to the Patriot Bridge, however.

That $2 million was also and increase of $400,000 per year, as the mayor said the previous offer was $1.6 million per year.

For Charlestown, the greatest feature for the future will include significant commitments for traffic in Sullivan Square and Charlestown. Wynn has agreed to spend $25 million over 10 years for Sullivan Square infrastructure improvements. Meanwhile, they’ve also committed to $11 million in traffic mitigation for Charlestown in general.

Another $250,000 is to go towards a Regional Working Group looking at a long-term fix for Sullivan Square.

Most of those amenities are not new and Wynn had already agreed to them as a condition to its MGC license 18 months ago. At that time, Wynn agreed to contribute $25 million to a long-term fix in Sullivan Square, with up to $20 million more money coming if traffic counts exceeded projections. Another $10 million had been committed to the MGC for short-term fixes in Sullivan Square.

So, most of the Sullivan Square commitments had already been made prior to the agreement.

It was not immediately certain what the $11 million for Charlestown traffic would entail – whether it was part of the $10 million short-term fix pot of money from the MGC or some new pot of money.

Boston did allow Wynn to be released from an MGC traffic mitigation clause that required up to $20 million of additional monies to be paid if traffic counts on Rutherford Avenue and Sullivan Square exceeded projections. That would have worked on a per-car fee for every vehicle over the projection, but Boston dropped that requirement for Wynn – with Wynn arguing for some time that there was no way to tell if the increased traffic was going to their resort or to some other destination.

The Boston agreement would overrule the MGC’s previous agreement, but the MGC could ask for that provision to be added – or some other form of it to be added – prior to approving the deal. Such a clause was a sticking point for several Commissioners during the licensing process, though one of those commissioners – Charlestown’s Jim McHugh – is no longer a member.

The one absolutely new feature was the removal of the BWSC Materials Handling facility with the possibility of making it an open space park as well.

In regards to Boston’s lawsuits, a condition of the agreement is that all lawsuits will be dropped and that Wynn would drop its defamation lawsuit against the City. It appeared that the agreement included $1 million in “professional expenses,” likely to be enough to cover the cost of negotiating the agreement, but not enough to cover the millions of dollars paid in legal fees over the last year to outside attorneys representing Boston in its litigation.

The specific highlights of the agreement include:

  • $31 million over 15 years for community impact (just over $2 million per year);
  • $25 million over 10 years for Sullivan Square infrastructure improvements;
  • $11 million for traffic mitigation in Charlestown;
  • $250,000 for a Regional Working Group on a long-term fix for Sullivan Square;
  • Good faith effort to purchase $20 million annually over 15 years from Boston businesses; and,
  • $1 million for reimbursement of professional expenses.
  • The agreement states further commitments by Wynn Resorts for traffic improvements, including Transportation Demand Management measures, a transportation monitoring program and additional mitigation measures if operational deficiencies are revealed.
  • In addition, Wynn Resorts has agreed to work with the City of Boston to explore moving the Boston Water and Sewer Commission’s Materials Handling Facility with the goal of creating public open space along the waterfront in Charlestown.

“Our efforts over the past two years have been to protect the people of Boston and ensure the neighborhood of Charlestown is treated fairly,” Mayor Walsh said. “Residents have been trying for years for a solution for traffic congestion in Sullivan Square and Rutherford Avenue, and we must work together to improve local transportation infrastructure. I offered to keep an open line of communication throughout this process and I thank Steve Wynn for coming back to the table to listen to Boston’s needs.”

Wynn Resorts issued a statement following the agreement, saying they are ready for a new chapter in the book on their often-rocky relationship with Boston.

“We are eager to turn the page in our relationship with the City of Boston and begin a new chapter that will culminate with a beautiful, five-star resort overlooking Boston Harbor,” read the statement. “Subject to approval by the Massachusetts Gaming Commission, our agreement with Boston will unlock economic development and jobs for the entire region. Both Wynn Everett and Mayor Walsh wanted the same outcomes:  to bring new jobs, economic growth and a globally respected resort company to the region, while doing what’s best for the people of Massachusetts. Our agreement hits all these marks in very meaningful ways.”

State Rep. Dan Ryan said he was grateful to the mayor for negotiating the deal, which he said would now open up real, regional discussion about improving the roads on the Sullivan Square/Rutherford Avenue corridor.

“Mayor Walsh’s administration used all the resources at their disposal to get the best possible deal for Charlestown,” he said. “I thank the Mayor for continuously fighting for our neighborhood. It is clear from this agreement that Mayor Walsh and his team have a deep understanding of the Charlestown community and the decade’s long problems we’ve faced in this corridor. I look forward to engaging with the parties involved to finally get our roads fixed, get work for local residents who need it and to engage Charlestown businesses in this opportunity.”

Councilor Sal LaMattina said he was disappointed the judge threw out the City’s lawsuit, but he said a bright side to the agreement is the transportation money for Sullivan Square, as well as the $2 million per year slated to stay in the Town. “I do commend the mayor for fighting for Charlestown,” he said. “The transportation mitigation money – especially at Sullivan Square – that might might finally give us the ability to address the problems and make improvements. It’s $25 million and it’s certainly going to cost more than that and I’m hoping the state will fund improvements to Sullivan Square. There is a Transportation Fund in the casino law and I’m hoping they will fund Sullivan Square before any other improvements For the $2 million per year, I think that’s a lot of money. I think it will help a lot of non-profits  in the neighborhood and hopefully we can do long-term planning to create something really nice for Charlestown.”