Attorney Philip N. Beauregard

Attorney Philip N. Beauregard

Attorneys Philip N. Beauregard and George J. Leontire sent the following  to the Massachusetts Gaming Commission on March 27, 2015:

 

Dear Mr. Chairman and Commissioners:

The purpose of this letter is to address the discussion by Commission members at the March 19, 2015 meeting regarding requests for extension of deadlines for two license applications now pending in Region C. The undersigned are former City Solicitors for the City of New Bedford, covering time periods in the early 1980’s (Beauregard) and late 1990’s (Leontire); also we are life-long residents of the City of New Bedford and we are keenly aware of circumstances and economic challenges that have faced this area (Southeastern Massachusetts) over the course of the last 30+ years. We maintain law offices in the downtown historic district of the City of New Bedford (Andrew Robeson House). Our respective law practices touch on a multitude of clients and issues directly involved with the economic environment in New Bedford. We do not represent any entity or individual seeking a license from the Commission.

Attorney George J. Leontire

Attorney George J. Leontire

Respectfully, our concern is that much of the discussion regarding whether or not to grant two applicants a 45-day extension reflects a significant misunderstanding of the Commission’s statutory obligations in acting on current applications for a casino license in Region C. If the correct statutory criteria are not applied, this area of the state may well experience a “left behind” effect that has unfortunately negatively impacted this area of the state too many times in past years.

The emergency preamble to House Bill No. 3807 provides that the purpose of the Act is to create economic investment and job creation in the Commonwealth. The Legislature clearly articulated 10 specific guiding principles that underlie the Gaming Legislation. Consistent with the Act’s Preamble, Section 1 of the Act emphasizes the Act’s purpose: creation of opportunities for the unemployed and encouragement of culturally and socially diverse communities in all sectors of the Commonwealth through a “robust licensing process”. (See Attachment A-Excerpts of the Gaming Statute)

Section 18 of the Act lists 19 criteria on which the Commission must make written findings when evaluating a license. The extensive criteria set forth by the Legislature anticipate that a license will be granted to an applicant who qualifies. Attachment A.

We have prepared an abstract of the meeting discussion that indicates that the Commission may be on a course of straying from its statutory mandate. (See Attachment B-Selected sections from the official meeting transcript). Comments by the two members who voted no to the extension are disturbing. The sub-text of their comments is that a Region C license will inevitably be denied and that by voting yes, the Commission was simply prolonging the process. We urge those Commission members to reconsider their position and to keep an open mind on the Region’s applications. We ask that the Commission render its decision in a fair and impartial manner without prejudging the merits of the pending applications before making an evaluation under the criteria outlined in the Act.

We believe that the intent of Chapter 194 of the Acts of 2011 (General Laws, Chapter 23K), read as a whole, is to place the three regions of the state (A, B, C) on equal footing with respect to the three casino opportunities created by the statute. Each region should be afforded equal treatment with respect to the criteria set forth in the statute for selection of an applicant. Each region is entitled to strive for the economic benefit envisioned by the statute.

The “competition” provided in the Casino statute is manifestly meant to be “intra-region,” not “inter-region.”   However, some Commissioners’ comments at the hearing suggested that the Commission should be looking to the potential effect that a Region C casino license might have on the already granted licenses in Regions A and B; and the impact of a future potential license that might or might not be operated by Native American Indian ownership.

We believe differently, that the Commissioners’ obligation under the Act is to evaluate, within each separate region, which (if any) applicant is best suited to carry on the beneficial economic development within that region.

It would be a clear departure from the intent of the Massachusetts Casino legislation to have one or two of the three listed regions favored over another region, even if the Commissioners’ intent is to protect existing granted licenses in Regions A and B (at the expense of Region C).

We believe that the Commission should not reexamine the Legislature’s purpose in enacting Chapter 194, with its clearly stated intent that the Commission evaluate the merits and economic viability of the regional applicants’ plans and agreements with the respective host cities. Section 18 states that the Commission will examine “how each applicant proposes to advance the economic objectives” sought by the City (for each region) in negotiating and executing a host community agreement with the applicant.

In the case of KG Urban and the City of New Bedford, months of time consuming work and comprehensive discussions and negotiations have resulted in what the City of New Bedford believes will be an extremely favorable economic tool for the resurgence of the City’s economy and employment. A fair and objective evaluation by the Commission, looking at intra-region considerations in evaluating KG Urban’s application, is the proper and legal course that the Commission should follow. Our fear is that Commission members may (erroneously) proceed by considering economic factors outside of Region C (i.e. the continued viability of casino operations in Regions A and B) rather than afford Region C its own independent consideration.

Central to our view of the Gaming Legislation is that Section 19(a) of Chapter 194 could not be clearer as to the singular circumstance under which a Region may be denied a license.            That circumstance is very specific. No license will issue:

“…if the commission is not convinced that there is an applicant that has both met the eligibility criteria and provided convincing evidence that the applicant will provide value to the region in which the gaming establishment is to be located…”

It should be beyond question that Region C is entitled to a fair application of criteria set forth in the law, just as such criteria were applied earlier to Regions A and B. Each region’s casino proposal should be judged by the same criteria: whether the proposal “provides employment and support in all sectors of the economy, particularly where unemployment has been a traditional issue challenging that region’s economy.” The additional goals of promotion of small businesses and tourism, and cultural and social facilities, also need to be considered on an intra-regional basis. Accordingly, no one region should be denied an intra-region evaluation process. To fulfill the Legislative intent, the statutory criteria should be evaluated from a local regional context.

The HCA in this case, and any further information to be provided to the Commission, should be examined with respect to the proposed beneficial effects within Region C rather than consideration of the impact of a Region C casino on other regions of the state.

In addition, any present preoccupation or speculation by the Commission that equity partners may be shying away from the region overshadows and prejudices its obligation to fairly evaluate what the applicants are offering for Region C. This type of speculation could well create a self fullfilling prophecy.

We urge the Commission to make a clear and unambiguous statement that a Region C applicant who shows it has the wherewithal to build a casino in accordance with the criteria of the Act will be granted a license. This Commission must give Region C a fair shot at a license. Any damage already done needs to be addressed. No other Region has faced such bias suggesting that the Region cannot support a Casino. The Legislature made the determination that there was to be a Region C license if a qualified applicant met the Act’s criteria; the Commission does not have the right to disregard that mandate. The Commission exists to administer the law, not change it.

We do not address at length the Tribal Gaming Region C license issue. Its use as an argument against awarding a license is a red herring. The argument that the potential of a Tribal license should prevent the issuance of a commercial Region C license is simply a pretext to deny the region a license. The Tribe has made no headway with having the land taken by the Department of Interior. Given the state of the federal law as altered by the recent United States Supreme Court decision it is years away if at all. It is time that the Commission take the position that a qualified applicant willing to invest $650 million in Region C will trump any concerns over the establishment of a Tribal facility that may or may not occur in the future.

We are well aware that the Commission has power to issue or not issue a license. We submit, however, that such power is set forth in Section 19(a) (as explained above), and is intended to insure that a license is not issued to an unqualified applicant, and not to deny a Region a license altogether.

We agree with Commissioner James McHugh’s comments at the March 19, 2015 Commission meeting. We hope the Commission members will take to heart his comments.

I come at this from a little bit different starting point. This is really at tough problem. I think we all feel that it’s a tough problem. But I come at it from a little different starting point.

And the starting point is the statute and the purpose of the statute. The statute is designed to create an economic engine or engines. It’s designed to create jobs. It’s designed to create both permanent and construction jobs. And it’s designed to help reach into, at least as we have applied it, into communities that are having difficult economic times and boost the economics.

But I think we need to look at it carefully on the merits and not use a deadline as a proxy for avoiding looking at it. In fact, we can’t avoid looking at it because we have an applicant who is qualified and whose application is going to go forward. So, we’re going to look at it anyway. We’re at the starting gate. Transcript pg. 271-274 see Attachment A

Region C deserves the same treatment afforded Regions A & B. This is the clear intent and language of the enabling statute.

Appropriate consideration of the above comments will benefit all citizens of the Commonwealth (including those working and residing in Region C who deserve equal treatment under the law).

Very truly yours,

________________________                                    _______________________

GEORGE J. LEONTIRE                                                      PHILIP N. BEAUREGARD