MGM Resorts International announced ambitious plans Monday for a $675 million casino and entertainment complex in Bridgeport’s Steelpointe Harbor area, a move that opens up a new front in the state’s casino expansion debate.
“MGM Bridgeport is the right development at the right time and in the right place,” MGM Chairman and Chief Executive Officer James Murren, a Bridgeport native and Trinity College graduate said at a news conference with Steelpointe Harbor as the backdrop.
MGM’s announcement comes at a vulnerable time for the state. There has been a spate of discouraging corporate news, the latest coming last week when Alexion Pharmaceuticals Inc. announced it would relocate its headquarters to Boston. And the state appears no closer to adopting a budget for the fiscal year that began July 1, after Gov. Dannel P. Malloy said he would veto the latest effort from the legislature.
Murren emphasized the benefits of a Bridgeport casino and entertainment complex, which would capitalize on a waterfront location and seek to draw heavily from the New York market south to Manhattan.
Under current state law, MGM would not be allowed to build a casino in Bridgeport, meaning new legislation would be required. Casino gambling is currently limited to the two federal Indian reservations. However, the General Assembly has approved a plan for a third casino in East Windsor that would be jointly operated by the Mashantucket Pequot and Mohegan tribes.
MGM Bridgeport would include 2,000 slot machines, 160 table games, a 700-seat theater, a 300-room hotel, retail space and dining options.
MGM said the privately financed casino would create 7,000 new jobs in the Bridgeport area and, if approved by state legislators, would give the state $50 million in licensing fees in the current fiscal year. MGM, which considered Bridgeport for a casino in the 1990s, has been working on the project since June. If approved, it would take about a year for construction to begin and about 30 months before the complex would open.
Monday’s press conference was accompanied by splashy renderings and a glossy brochure with highlights of an economic study that plays up the consequences of Connecticut failing to respond to a casino expansion in New York.
Bridgeport Mayor Joseph Ganim was joined at the press conference by Toni Harp, the mayor of New Haven, who threw her support behind the project. Under an agreement with MGM, Bridgeport would get $8 million in annual payments, $4.5 million to surrounding communities and a workforce development and training program in New Haven to support the casino.
“There is one phrase to encapsulate my support for this project which will benefit Connecticut’s two largest cities, and that phrase is ‘jobs creation,’” Harp said. “Bold initiatives that engage private capital that will yield significant revenue in the public sector over time are needed. This is that initiative.”
Ganim echoed those comments saying, “This creates an opportunity not just for our cities but for our state.”
The proposal is likely to rekindle the debate over the just how much the gambling industry in Connecticut can be sliced up and, if approved, the amount of competitive pressure it would place on the state’s two tribal casinos at Foxwoods and Mohegan Sun. The state currently receives hundreds of millions of dollars annually in payment from the tribes in return for being allowed to operate slot machines.
In the last legislative session, MGM pushed aggressively for open competition if the state was to expand casino gambling beyond the Pequots and Mohegan tribes.
Uri Clinton, senior vice president and legal counsel at MGM Resorts, said Monday the state made it clear by approving the East Windsor casino that it did not support open competition. The push for the casino in East Windsor was framed by its supporters as a defensive maneuver in the face of MGM’s $950 million casino and entertainment complex set to open in Springfield in late 2018.
William J. Hornbuckle IV, MGM Resorts president, said the company has been in discussions with legislators about Bridgeport and has reached out to the governor.
When asked if Gov. Dannel P. Malloy was receptive, Hornbuckle responded: “I wouldn’t go that far. But he didn’t know up until this morning whether this was going to happen.”
Malloy told reporters Monday he would have to review the plan but doesn’t have reason to believe that this would generate more revenue than the current slot agreement.
"They admit in their own answers to questions earlier today that this would violate our agreement with the tribal nations, so over the next two years, that would have negative impact to the tune of almost $500 million on the state should they move forward."
"I can't imagine entering into an agreement with any entity that would endanger our agreement with the tribal nations that in the current biennium budget under negotiation and discussion could cause a shortfall of a half-billion dollars,” Malloy added.
A spokesman for the two tribes, Andrew Doba, said the MGM proposal reflected “a pattern of dishonesty.”
“Authorization of this facility would violate the existing compacts between the two tribes and the state which would immediately end the slot payments that currently sends the state hundreds of million a year in much need revenue,’’ Doba said.
MGM said it would partner with Florida-based RCI Group, the developers of Steelpointe, on the project.
Robert W. Christoph Sr., RCI’s chairman, said his company has been involved at Steelpointe since 2001, some years passing with little or no progress as the city sought to gain ownership of property in the area. But in 2015, Bass Pro Shops, the sporting goods chain, opened, followed by a Starbucks and Chipotle restaurant.
Earlier this year, RCI broke ground on a 35,000-square-foot building with plans for a seafood restaurant and office space. In October, construction will begin on the first phase of 182 apartments over shop and restaurant space.
“These large projects take on a life of their own,” Christoph said, after the news conference. “To do the right thing, you have to do a piece at a time, like building blocks.”
Hornbuckle said the market for the Bridgeport casino would be New York, with the riverfront location being key to differentiating it from competitors. He also said it was possible that a water taxi could run between Long Island and Bridgeport. MGM also said there are gaming facilities closer to New York City but they are racing oriented.
During a controversial legislative debate this spring on casino expansion, MGM had repeatedly said southwestern Connecticut was the best location for a casino if lawmakers were to allow expansion beyond Foxwoods and Mohegan Sun.
The legislature eventually approved plans by a joint venture of Mohegan Sun and Foxwoods to establish a third casino in East Windsor. Malloy later signed the legislation. The joint venture, MMCT, was waiting for federal approval from the Department of Interior’s Bureau of Indian Affairs that the expansion did not violate the slot revenue-sharing agreements with the state.
In the past year, the bureau gave nonbinding assurances that the expansion shouldn’t pose a problem. But a letter late Friday unexpectedly did not render a decision either way.
“The tribes have entered into an agreement with the state whereby they have agreed the exclusivity provisions will not be breached by this arrangement,” Michael S. Black, acting assistant secretary for Indian Affairs, said in letters to the tribes’ chairmen. “Therefore, our action is unnecessary at this time.”
Doba, the spokesman for the joint venture, said the letter shows “that it's up to the state and the tribes to agree that the exclusivity provisions will not be breached by their arrangement to jointly own and operate the East Windsor facility.”
Doba said the tribes will work with Malloy and the legislature on what comes next.
The legislation allowing the tribes to expand requires sign-off from the BIA and could force the tribes to go back to the legislature for a change in that provision potentially slowing down the project.
The office of Attorney General George Jepsen said it is reviewing the letter and declined further comment Monday.
MGM had fought in court the state’s move to allow Foxwoods and Mohegan Sun to jointly expand beyond their reservations. On Monday, Clinton said MGM would still pursue options in court.
Courant Staff Writer Russell Blair contributed to this story.