Curtatone, Ash upset with arbitration awards

Somerville mayor says process favors casinos

The mayor of Somerville and the city manager in Chelsea rolled the dice and lost in seeking surrounding community casino mitigation payments from Wynn Resorts, but the two officials say the process wasn’t fair.

The state gaming law requires casino developers to sign mitigation agreements with their host and surrounding communities. If negotiations fail, the parties can go to arbitration, a high-stakes option where the arbitrator must choose between the final offers of the parties; the arbitrator cannot craft his own solution. Both Somerville and Chelsea went to arbitration with Wynn, which wants to build a casino in Everett, and lost.

“The process in reaching agreement on what is proper mitigation is a process that is…guided by the casino industry and their lobbyists, and not in the best interests of the people of the Commonwealth,” said Somerville Mayor Joseph Curtatone, who strongly opposes casino gambling and is expected to help lead efforts to pass an initiative petition repealing the state gaming law in November.

The Wynn offer to Somerville, which arbitrators backed by a 2-1 vote, requires the casino developer to make a $150,000 annual payment to the city to address business and public safety concerns and to give another $6 million to address traffic congestion around Sullivan Square. The resort will also aim to use Somerville contractors and buy $10 million in goods and services from Somerville vendors annually.

Somerville had asked for a $1.5 million annual payment, with a 2 percent increase each year, “for any use it deems appropriate.” The city argued that the money would compensate for economic development impacts, but could not detail what those would be. Somerville also wanted other payments, including a $2.8 million payment for housing market impacts. But city officials could not describe how the casino would negatively affect the housing market.

Curtatone is not satisfied. “The agreement between Somerville and Wynn…is in no way, shape, or form adequate to addressing any concerns of mine,” he said.

Curtatone claims that an Everett casino would negatively impact traffic and reduce affordable housing stock in Somerville. A casino, the city claimed, would cause massive travel headaches for commuters.

Chelsea also lost to Wynn in arbitration, with arbitrator Steve Neel, a retired Superior Court judge, deeming many of the alleged impacts of the casino preexisting conditions and not problems that would be directly caused by casino development.

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On transportation concerns alone, Chelsea wanted a $1.5 million upfront payment plus $250,000 each year. What Chelsea got was a one-time $300,000 payment, plus mitigation projects required under state environmental laws.

Jay Ash, the Chelsea city manager, said arbitrators should err on the side of municipalities. “It is more important that if the arbitration process was going to make an error, it should make an error in promoting healthier and safer communities, not promoting healthier and safer bottom lines for casinos,” he said.