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Casino bill sees boost to state coffers

Windfall in sale of land touted

A Senate bill that would expand gambling in Massachusetts would empower a new Gaming Commission to take land by eminent domain and resell it for top dollar to casino developers, generating a huge windfall for the revenue-starved state.

The Senate legislation, the subject of intense backroom haggling in recent days, is being drafted to maximize profits for the state, win over powerful skeptics like House Speaker Thomas M. Finneran and Governor Mitt Romney, and deprive savvy land speculators of gargantuan profits.

Although Senate leaders say the situation remains fluid, elements of the plan have emerged that appear to have a consensus among Republican and Democratic Senate leaders.

Senators from both parties appear to agree that the governor would appoint the majority of members of the Gaming Commission, which would have the sole power to choose casino sites. The panel would probably replace the state's Racing Commission, which oversees horse and dog racing. In addition, the key senators appear to agree that casinos could only be built in communities where voters have already formally approved such facilities through ballot referendums. They also generally believe that the market in this state could only support two casinos.

Also, the legislation would probably allow the state's four racetracks to bid on three licenses to install 1,000 to 1,500 slot machines each, creating competition that would drive up bids, Senate leaders say.

Proponents of the bill say it would generate as much as $500 million annually in revenues, in addition to an expected windfall from the land and license sales.

"We could be wasting our time and spinning our wheels," said Senator Michael W. Morrissey, a Quincy Democrat and chairman of the Government Regulations Committee, which oversees gambling issues. "But we want to make sure that, if we do this, we're going to give it our best shot."

By giving Romney the power to control the commission, proponents say, the plan could very well soften opposition from the governor, who has said he would only support more limited expansion of gambling, such as slot machines, rather than resort-style casinos. As for Finneran, who worries that casinos would cannibalize the state lottery's profits, the plan promises hundreds of millions more dollars than previous proposals, no small thing as state leaders grapple with a budget pinch.

"If we put together a thoughtful, responsible proposal, Finneran will give it a good hard look," said Senate minority leader Brian P. Lees. "Will he agree with us? I don't know."

As for Romney, Lees said, "he is wisely waiting to see what we draw up."

Lees said the bill could hit the Senate floor for a vote as early as this month.

If the Senate plan has potential to entice longstanding opponents of gambling, it could also outrage many across the state, not least the developers who own or have purchased options on prime casino real estate. From New Bedford to Western Massachusetts, developers have quietly spent millions of dollars in recent years on land, hoping to cash in if casinos are legalized. The state, they say, should not be able to swoop in and use eminent domain powers -- the authority to take private land for public purposes -- to take their land at "fair market" values, then sell it at many times the buying price.

"I don't want market value," said John Lizak, a developer who hopes to sell his 250 acres in the Central Massachusetts town of Palmer to a casino developer. "I want real value."

To date, casino developers have secured purchase options in at least four locations in Hampden, Bristol, and Worcester counties, where the Senate is focusing its efforts.

In Holyoke, developer Charles J. Petitti has sat on a 3-acre downtown property for about a decade, hoping to convert it into a small urban casino. He called the state's plan to use eminent domain powers "a shame."

"I would cooperate with anything they come up with at this point, but it would be a shame to go down that route," he said.

Northeast Gaming Group Inc., a Longmeadow real estate and gambling consulting firm run by Leon H. Dragone has also purchased options on a 60-acre former amusement park outside Holyoke on Interstate 91, according to Holyoke Mayor Michael J. Sullivan.

In New Bedford, Las Vegas developer H. Steve Norton has obtained options on roughly 20 acres, too.

Morrissey said he is quite certain that other speculators have quietly bought options elsewhere in the state, but feels the interests of those developers pale in comparison to those of taxpayers.

As a result, Morrissey said, he would only support a bill that establishes a new commission, and one that has eminent domain powers.

"If we as legislators are going to be adding value to a property, then we want the taxpayers to be paid in this time of fiscal crisis," Morrissey said.

Ideally, Morrissey said, the new Gaming Commission would find public property on which to locate a casino, perhaps a 188-acre site in Warren owned by the Massachusetts Turnpike Authority.

However, Turnpike officials, who are confronting a critical shortage in revenues, would probably resist signing over prime real estate at current market value.

Turnpike spokesman Sean G. O'Neill said the agency's chairman, Matthew J. Amorello, is avidly seeking "the best possible value he can get" for the Warren land. Unlike a private developer, the Turnpike could parlay revenue from a land sale to reduce or even eliminate tolls, O'Neill said.

"As this [legislative] process evolves, chairman Amorello will represent the Turnpike's interests as best he can," O'Neill said.

Right now, legislative budget analysts predict that the state will face a $1.5 billion-to-$2 billion shortfall in the coming fiscal year, figures that are prominent in the minds of lawmakers who last year drew up a spending plan that drastically cut aid to cities and towns. By licensing casinos and putting slot machines in some of the state's four race tracks, lawmakers argue, the state could generate as much as $500 million every year, not to mention potentially hundreds of millions more for any land transactions.

With so much money at stake, the Legislature must walk a tightrope between guarding the taxpayers' interests and encroaching on those of private property owners, said Lees of East Longmeadow, whose district would probably end up with a casino if a bill passed.

"Any time the state can benefit, we should look at that," Lees said. "At the same time, we're talking about private business here. The bill we are putting together would put slots at the four racetracks, and their value would skyrocket."

Lees said he expects both Finneran and Romney to weigh the proposal very carefully, given the state's fiscal woes. In addition, Finneran has offered an economic development package that has yet to pass the Senate, giving Senate President Robert E. Travaglini bargaining leverage. But no matter how tantalizing the prospect of gaming revenues, most lawmakers seem to agree that the Legislature must remain vigilant as it weighs casino legalization.

"Every snake oil salesman in the country is trying to get this in Massachusetts," said Senator Mark C. Montigny, Democrat of New Bedford. "It's full-employment time for lawyers and hucksters."

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