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US – Mohegan Sun signs host community agreement with Palmer

By - 4 September 2013

Mohegan Sun Massachusetts has reached a host community agreement with the Town of Palmer, Massachusetts, establishing in excess of $16m in annual mitigation payments to the town, and allowing a timetable to be set for a local referendum election.

The historic agreement, which is subject to approval by the Palmer Town Council and the Management Board of the Mohegan Tribal Gaming Authority, calls for signing and “pre-opening” payments of close to $3 million, with the first $200,000 payable upon approval and setting of a referendum date by the Palmer Town Council.

The additional infrastructure improvements will include an estimated $23 million for expansion and improvements to existing roads, sewer and water systems in Palmer, including: enhancements to the water distribution system of Palmer Fire and Water District 1 and its neighboring water districts; improvements to the municipal sewer system; and road improvements and traffic mitigation – including substantial improvements to the Exit 8 entrance and exit interchange of the Massachusetts Turnpike.

“More than four years ago we began building a relationship with the great community of Palmer. I am happy to say we have forged a genuine partnership to bring jobs, economic growth and a new visitor economy to this town and the entire region,” said Mitchell Etess, Chief Executive Officer of the Mohegan Tribal Gaming Authority.  “We are confident this host community agreement, combined with our nearly $1 billion proposal, will deliver the very best for Palmer and Massachusetts.”

The $16m includes fixed payments totalling $15.2m and a percentage of gaming revenue equal to .25 per cent of the first $400m in revenue. These payments represent the largest per capita and per household mitigation of any Western Mass. proposal and should help bring fiscal stability to Palmer, plus much-needed infrastructure improvements benefitting Palmer and the surrounding region. For every resident in Palmer, the town will receive more than $1,200 annually in mitigation payments, taxes and revenue sharing from Mohegan Sun Massachusetts.  The guaranteed annual mitigation payment alone exceeds the entire local tax revenue for the Town of Palmer in fiscal year 2014. In addition to the revenue sharing on the first$400m in revenue, the Town will receive an additional two per cent from every dollar of gross gaming revenue from the gaming facility above $400m annually, making the Town and Mohegan Sun true partners in the resort’s success.

“This is a community with a proud tradition built on working people, and we have an eager and quality workforce,” said Elaine Boone, Chairwoman of the Yes for Palmer Campaign to support Mohegan Sun Massachusetts, and a former elected official and lifelong resident of Palmer. “This agreement vividly illustrates the strong commitment Mohegan Sun has made to Palmer. For a community this size to have the opportunity to receive this package of benefits – and to play such an important part in positively impacting the entire region – is remarkable.”

Funds from the annual mitigation payments will be appropriated at the discretion of the Town of Palmer.

Additionally, Mohegan Sun Massachusetts is expected to generate an estimated $900,000 to $1.4m in annual hotel occupancy taxes and an additional $225,000 in annual meals taxes to the Town.

“This historic agreement marks the formal start of perhaps the most important local election campaign in Palmer’s history,” said David Whitney, Treasurer of the Yes for Palmer Campaign, who is a retired public school teacher and 35-year Palmer resident. “We have an extremely motivated group of volunteers and supporters who want to help bring quality jobs, new economic opportunity and tens of thousands of visitors to Palmer.  Yes for Palmer means ‘Yes’ to a better future.”

Mohegan Sun Massachusetts is proposing a nearly $1bn resort casino in Palmer Mass., which features premier gaming and resort amenities, two hotels, a 70,000 sq. ft. adventure-themed water park and 300,000 square feet of first-rate entertainment, dining and fashion retail options.  This one-of-a-kind destination resort will deliver thousands of jobs as well as vendor and other business opportunities to Western and Central Massachusetts.

In collaboration with the Massachusetts Casino Careers Training Institute – a consortium of area community colleges – and through its own Palmer job fairs and recruiting events, Mohegan Sun will be working with Palmer to promote training, employment and contracting opportunities for local residents.

“Mohegan Sun Massachusetts has so many great assets, including a superior brand, a successful New England business model and a huge marketing advantage over our competitors in name and database,” added Etess.  “We have a terrific financial partner in Brigade Capital Management, the largest investment by far and the most creative combination of resort gaming amenities and family entertainment. And we have the best location of any proposal in Massachusetts, in a wonderful host community.”

Mohegan Sun Massachusetts will also enter into a construction agreement with the town to address limitations on construction activity hours, noise and heavy equipment traffic, as well as public safety measures during construction. They will also work directly with the town to establish a Community Advisory Board to address community relations matters and the promotion of local and minority hiring.

The Palmer Town Council is scheduled to vote on the host community agreement and establish a date for a town-wide referendum election at its next meeting on September 3.

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