Revisiting one of Walsh’s biggest defeats

Walsh lost his battle against Wynn Resorts, but now it seems forgotten

IT’S HARD TO REMEMBER NOW why Boston Mayor Marty Walsh spent a good chunk of his initial two years in office fighting a legal and verbal war with Steve Wynn and the Massachusetts Gaming Commission.

At the time, Walsh said he felt Boston was a host community to Wynn’s Everett casino because no one could enter the property without going through Boston. He was also very concerned about the casino’s traffic impact on Sullivan Square and Charlestown, and how little he felt Wynn was doing to address it. But simmering underneath all the arguments and legal briefs was a sense the relatively new mayor wasn’t being taken seriously.

“At this point it’s not about mitigation,” Walsh declared in July 2015. “It’s about respecting the city of Boston. I think on many fronts, the city of Boston has been extremely disrespected.”

Ultimately, Walsh lost the fight. He lost in court, he lost at the Gaming Commission, and he probably lost out on millions of mitigation dollars by fighting rather than negotiating with Wynn. Next to Walsh’s unsuccessful bid for the 2024 Olympics, the casino fight may be his biggest political defeat.

Suffolk Superior Court Judge Janet Sanders didn’t mince words in tossing the city’s long-shot lawsuit challenging the authority of the Gaming Commission to designate Boston a surrounding community and not a host community to the Everett casino. She criticized the “inflammatory descriptions” and “spurious” claims in the city’s legal filing, and said the document was “needlessly long and the legal claims difficult to decipher.”

Now, as Walsh seeks a second term in office, the fight with Wynn is largely forgotten. He hasn’t been challenged on it during his reelection campaign, his administration is now working closely with Wynn Resorts to deal with traffic issues in the area of the casino, and Walsh himself appears to have moved on. He insists he has no regrets.

“Looking back on it, I don’t know what we could have done better,” he said. “It was important at the time. The community of Charlestown was concerned about the casino going over in Everett. They were concerned about the traffic impacts. Fighting for them for the right to be a host community was important to do. I can’t say we wasted money. We had to fight. We had to do that.”

Yet the fight almost certainly came at a steep cost. The city spent close to $2 million on private attorneys and its scorched-earth approach to Wynn may have cost the city millions of dollars in mitigation payments.

As part of the casino licensing process, applicants were required to sign agreements with their host communities and surrounding communities. The agreements were intended to mitigate the impact of the casino, but they often came with financial sweeteners designed to ensure the loyalty of surrounding communities.

Boston negotiated a very sweet surrounding community agreement on July 10, 2014, with Mohegan Sun, which was vying for the Boston-area casino license against Wynn Resorts. The deal promised the city an upfront payment of $30 million and provided annual payments of $18 million a year once the casino opened. Mohegan Sun, which wanted to build a casino in Revere, also promised to buy as much as $50 million worth of goods from Boston vendors.

With Wynn Resorts, Walsh insisted Boston was a host community and not a surrounding community. The host designation would have allowed Charlestown residents to vote on whether they wanted the casino at all. As Walsh pursued host status for Boston, he refused to sign a surrounding community deal with Wynn. As a result, when the Gaming Commission awarded Wynn the casino license in September 2014, the city of Boston’s only compensation was set by the Gaming Commission.

The license conditions required Wynn Resorts to make an upfront payment of $1 million to the city of Boston, an annual transfer of $1.6 million once the resort opened, and a $750,000 one-time payment for expenses. The conditions committed Wynn to purchase as much $15 million in goods from Boston-based vendors and pay a $20,000-per-car fee for every vehicle above a certain level traveling to the casino via Sullivan Square. The car fees could not exceed $20 million over 10 years.

Boston corporation counsel Eugene O’Flaherty and Robert DeSalvio of Wynn Resorts after the city and casino operator settled their differences.

That agreement remained in place until Boston lost its court case against the Gaming Commission. The city and Wynn then modified the earlier agreement slightly, upping the annual payment to $2 million and increasing the hoped-for vendor purchases to $20 million. The deal also did away with the per-car fee hanging over Wynn’s head.

“At the end of the day, the agreement that we came up with was a good agreement for the city, a good agreement for Charlestown,” Walsh said, noting that the $1 million upfront payment is being distributed to Charlestown nonprofit groups. A large chunk of the money was handed out last week at the Knights of Columbus hall in Charlestown, where local pols praised Walsh for fighting for the community.

Could he have negotiated deal with Wynn comparable to the one with Mohegan Sun? “No. I wish I could have. We tried at the beginning,” Walsh said. “I don’t think that Wynn, in fairness to Everett, could have agreed to all that we wanted.”

The city’s traffic concerns about the Wynn casino have largely subsided. Wynn is preparing to start construction work next year that will reorient some of the approaches to Sullivan Square to reduce the amount of traffic going into the circle. The company is also installing traffic cameras in the area and linking them to the city’s traffic management center so bottlenecks can be managed better. All the work is expected to be completed by the time the Wynn casino opens in mid-2019.

James Gillooly, deputy commissioner of the Boston Transportation Department, said the Wynn fixes won’t  eliminate traffic congestion in the area. “It will still have hiccups. It will still have some stress points,” he said. “But I think it’s going to go a good measure toward helping abate the increase in difficulties in Sullivan Square. It’s a great bridge to get us through the next couple years until we do the full reconstruction of Rutherford Avenue and Sullivan Square.”

The $150 project to redesign Sullivan Square and Rutherford Avenue is currently in design. Construction is scheduled to begin in 2021 and be finished in 2024. After that, state and local officials expect to focus on longer-range traffic improvements in the area.

Gillooly said he is optimistic. “Collectively, the mitigation work that Wynn is doing followed by the project the city is designing right now is going to help sustain development in the area and also provide wonderful ancillary benefits like bike tracks and green space,” he said. “I think we’re getting to a good place.”

Looking back, Walsh said he wishes he had had more time to make the decision about whether to seek host or surrounding community status with the Wynn casino. He said the issue was never brought up during the transition period between the Menino and Walsh administrations and he had to make a decision quickly after taking office. “I got sworn in on a Tuesday and we had to make a decision on Friday,” he said.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Walsh, who voted for casino gambling as a state representative and is now looking forward to the jobs the casino will offer, said he has no regrets about fighting Wynn Resorts and the Gaming Commission.

“I don’t regret it all,” he said. “It was something we needed to do as a city to protect the people of Charlestown and give them a voice. Now a lot of them have a voice. We fought it every step of the way. We obviously didn’t win it in court, ultimately, but what we did do is we got their attention. Once we sat down after the court case came down, we sat down and tried to come up with an agreement, which we did. Not everything I wanted, but something. It’s not a regrettable moment.”