by Dan Glaun

SPRINGFIELD --The MGM Springfield casino project is now expected to cost $950 million. But in March, the company was focused on a $64,000 question -- the five-figure daily penalty facing MGM if it were to miss its contractually agreed upon opening date.

MGM Springfield and the city's legal team sparred this spring and summer over whether delays to the project would cost the company those tens of thousands of dollars, MassLive has learned. And MGM may get the relief it was asking for, following this month's scheduled city council vote on the casino's redesign.

MGM Springfield's months-long and, at times, contentious process over the historical preservation of a key piece of property in the MGM Springfield footprint led the company's legal counsel to warn that further delays could have legal consequences for the company's agreement with the city, according to internal emails reviewed by MassLive.

In a series of emails last March between MGM legal counsel Seth Stratton and city solicitor Edward Pikula, Stratton warned that MGM would consider further hold-ups a "force majeure" event - meaning that MGM would not pay penalties for what it considered delays forced on the project by city and state regulators.

MassLive obtained the emails in response to a public records request for communications between city of Springfield officials and MGM Springfield employees.

In an interview, Stratton said that prior to a March compromise on how to preserve the facade of Springfield's YWCA building, differences between the company and the Springfield Historical Committee seemed intractable. At that time the company was still targeting a 2017 opening date, and was staring down $64,000 per-day penalties if the project exceeded its schedule.

MGM Springfield's design firm leads walking tour of endangered properties in South End 29 Gallery: MGM Springfield's design firm leads walking tour of endangered properties in South End

"We were essentially protecting ourselves, in terms of protecting our legal rights if we ended in the position where we had a delay," Stratton said. "That would basically stall the ticking of the clock."

It never came to that. The company has since delayed the casino's opening further, citing ongoing I-91 viaduct construction, and received the last of its historical approvals.

But MGM may get its wish without the need for legal hardball. Stratton and Springfield City Council President Michael Fenton told MassLive that an upcoming amendment to the host community agreement, centered on the approval of proposed design changes to the project, is also expected to include relief from delay penalties.

"The delay in construction, although regrettable, is in some respect outside MGM's control and we ought to make some accommodations for that," said Fenton, who has emerged as one of the most vocal critics of the casino's redesign. Fenton noted that had not received the final text of the deal from the city and so could not take a position on it.

"We won't be penalized for the delay we're experiencing from the viaduct," Stratton said. "We essentially have agreed with the city that rather than the need to assert a force majeure defense to that clock ticking, we all recognize the project delays that resulted from that."

MGM Springfield's slower-than-anticipated progress was reflected in its March 24 groundbreaking, which proved more ceremonial than practical in nature. MGM and Springfield officials, along with dozens of neon-vested construction workers, stood outside the former Alfred G. Zanetti School and made ceremonial first digs amid flying confetti and celebratory speeches.

In this letter, Springfield City Solicitor Ed Pikula lays out some of the city's historical preservation priorities to MGM Springfield.

But nine months later, the school itself is still standing - the result, in part, of a historical preservation review that took longer than company officials expected. The company received its demolition approvals in December, after months of back-and-forth with the Springfield and Massachusetts Historical Commissions, and is now scheduled to demolish the school starting this week.

In an interview, Springfield Historical Commission Chairman Ralph Slate said that by early 2015 the commission and MGM had agreed on most elements of the plan, but differed on four buildings: the Union House Hotel, the rear of the Springfield Armory building, the former YWCA building and the interior of the United Electric Building on State Street.

In a late February vote, the commission agreed to let MGM demolish the Union House Hotel. But the other buildings remained in dispute, leaving MGM without the approval needed to finalize its design.

Those debates came to a head in a chain of emails between MGM legal counsel Seth Stratton and city of Springfield Solicitor Ed Pikula. In a March 12 letter, Pikula laid out the city's interest in preserving a number of buildings on the casino site, while praising the company's commitment to the process.

&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;br /&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt; &amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;a href="https://www.documentcloud.org/public/search/document%3A%202679995%20document%3A%202678797%20document%3A%202680008"&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;View/search document collection&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;/a&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;br /&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;

In response, Stratton said MGM was working diligently to resolve differences with the Springfield Historical Commission - while describing quick approval as important for the project's future.

"MGM Springfield needs this approval," Stratton wrote. "As you know, the timeline for MGM Springfield to deliver this exciting project on-time and on-budget is aggressive."

Without a March approval - which did not come, after Slate and two other commissioners voted to preserve the YWCA building -- MGM anticipated delays of six months, according to Stratton. Stratton wrote that company was requesting an "expedited" approval and vocal support from city officials, while warning that the alternative could invalidate part of MGM's legal agreement with the city.

"Failures to do so may constitute a breach of the city's obligations under the HCA by which MGM could be damaged and which may result in an event of Force Majeure," Stratton wrote.

In this section of a March 16 letter to Ed Pikula, MGM Springfield general counsel warned that delays could trigger a force majeure event in the agreement between the city and the company.

The clause cited by Stratton allows MGM to declare a force majeure event if there is an "unreasonable delay" by state or local agencies to grant permits for the project."

Such a condition would have allowed MGM Springfield to delay the casino without paying the late fees set out in the HCA - in this case, for six months.

In an email, Pikula described the dispute as a natural consequence of two lawyers advocating for their clients.

"Development projects, in general, involve a back and forth where each side advocates for their client's position, hoping to persuade the other side of the merits of that position. When government regulation is involved, there needs to be a recognition that, while both sides may have different interests, they also have common interests that, if properly addressed, result in mutual benefit," Pikula said. "The city will continue to protect the public interests while working in this collaborative fashion as this project moves forward."

For his part, Slate said he was never pressured on how to vote by city officials. But he did feel rushed by MGM, and blamed the company for delays in scheduling meetings. The company first presented a formal demolition plan in Dec. 2014, Slate said, and demanded an expedited approval less than a month after the commission held its first vote on the matter.

"I felt as though there was a little deadline chicken going on," Slate said. "That's not a very nice way to play."

According to Stratton, MGM saw things differently. The company and the commission had worked out many differences, but MGM felt the commission was unwilling to move on the preservation of the entire YWCA building -- a non-starter for MGM, due to the building's central location in the casino footprint.

Disputes over the historical preservation process persisted through the end of summer; in a testy September exchange, Stratton and Pikula traded barbs over whether the city could hasten discussions as language in MGM's memorandum of agreement with state regulators was finalized.

"We would certainly appreciate working through you to close out what we view to be one outstanding language issue, as [Springfield Historical Commission Chairman Ralph Slate's] unexpected letter a few weeks ago derailed the final signatures," Stratton wrote. He continued, "Any assistance you can provide is much appreciated."

Pikula's response evinced some frustration, noting his March emails as an earlier effort to promote resolution of historical issues.

"Your response threatened to declare a 'force majeure' event in the event that the MGM proposal pending before the [Springfield Historical Commission] at that time was not approved in an 'expedited' manner," Pikula wrote. "The folly of that tact eventually played itself out as the [Massachusetts Historical Commission] has ultimately delayed the issuance and execution of an MOA, and the last act they require is that you return to the point from which you started."

They eventually reached a compromise, but at the time, Stratton said he wrote the email to put the city on notice that MGM would be willing to assert its contractual rights. He added it was part of a long process between partners with mutual goals, but also different constituencies to whom they are accountable -- shareholders, in MGM's case, and Springfield residents, in the city's.

"[The city] is holding our feet to the fire in the commitments in the host-community agreement," Stratton said. "We're likewise holding the city's feet to the fire in terms of their obligations to a timely process -- to work with us and assist us in jumping through the many hoops we have to."

Cover photo via TaxRebate.org.uk on Flickr, under a Creative Commons license.