CT Construction Digest Monday January 28, 2019

With new brand name, the Mohegans and Mashantucket Pequots launch campaign for East Windsor casino

By Stephen Singer

It’s a new year with a new legislature and governor -- and now there’s a new name for the proposed third casino in Connecticut.

The joint venture of the Mohegan and Mashantucket Pequot tribes lobbying for the casino to compete with MGM Springfield has launched a new campaign to win state legislation, unveiling a name for the proposed East Windsor gambling site.
The newly named Tribal Winds Casino is expected to support 2,000 construction jobs, 2,000 positions to staff the facility and 1,000 indirect jobs supporting vendors, tribal officials said. The plan would designate at least 650 jobs for residents of Hartford, East Hartford, East Windsor, Windsor Locks and other area communities. The casino was previously named MMCT Venture LLC, in recognition of the joint initiative of the Mashantucket and Mohegan tribes, who operate competing casinos on their reservations in southeast Connecticut.

In addition, the casino is expected to generate as much as $75 million a year in tax revenue to Connecticut.
“We’re talking about the next phase of this development, to save jobs, bring more revenue to Connecticut,” said Rodney Butler, tribal council chairman of the Mashantucket Pequots, which runs the Foxwoods Resort casino. “The project is shovel ready. We’d be there were it not for the roadblocks in Washington, D.C.”

He was referring to former U.S. Interior Secretary Ryan Zinke, who is the target of several probes. One investigation is focusing on his handling of requests to approve changes to slot machine revenue-sharing agreements with the Mohegan and Mashantucket Pequot tribes.

Last September, a federal judge ruled that Connecticut and Mashantucket Pequots have no legal standing to compel Zinke to accept revisions to the state’s existing gambling agreement with the tribe. Connecticut’s authorization of the East Windsor casino in 2017 was contingent on the Department of Interior accepting the revisions as a means to guarantee the new project would not jeopardize the state’s current revenue sharing deal with the two tribal casinos, Foxwoods and Mohegan Sun.

Sen. Cathy Osten, a Sprague Democrat, is leading a group of state lawmakers backing legislation that would drop the requirement for federal approval.

“There was some stymieing at the federal level that was political in nature more than policy,” she said.

MGM Springfield, a $960 million enterprise, loomed as a major threat to Connecticut’s two casinos when it opened last summer, but revenue numbers for the past five months at casinos in both states show fears about competition could have been over-estimated.

MGM Springfield told the Massachusetts Gaming Commission in June 2014 it expected in its first year $412 million in gross gaming revenue, which includes table games and slot machines. In the five months it has been in operation, it’s generated about $101.5 million in revenue.

In an emailed statement, Michael Mathis, president and chief operating officer of MGM Springfield, said the casino is “experiencing an extraordinary response.”

"We continue to grow the market with more than 15,000 visitors a day coming to our resort. We have a robust schedule of events and promotions planned for 2019 and look forward to welcoming many more guests in the months ahead,” he said.

Peggy Holloway, an analyst at Moody’s Investors Service, said revenue would typically ramp up over nine to 12 months “before it plateaus.”

“It’s already plateaued,” she said.

Initial results are below expectations, but it’s early to conclude that revenue will continue to decline, Holloway said.

“These are big properties. They take 24 months to ramp up,” she said. "They’ll overhire in the beginning. They’ll overspend to give gamers the right experience. "

In addition, MGM Springfield, like other downtown casinos, may initially have difficulty drawing visitors. “It’s hard to get people to a downtown area that’s experienced decline,” Holloway said.

And the region may be saturated with casinos. “It’s not build it and they will come anymore,” Holloway said.

The performance by MGM Springfield has prompted Connecticut officials to revise their calculations of revenue from the Mohegan Sun and Foxwoods casinos, which are taxed at the rate of 25 percent of slot revenue.

“We built in a significant decline,” said Chris McClure, a spokesman for the state Office of Policy Management, the governor’s budget office.

However, a January estimate of $248.6 million is up by $25 million from November. Revenue is still expected to decline, to $219.2 million by the 2022 budget year. By then, Connecticut officials expect competition not only from MGM Springfield, but also Encore Boston Harbor, another Massachusetts gambling resort that will be in “full operation,” McClure said.

Butler said sports betting, also on the agenda at the General Assembly, and the prospect of a casino in Bridgeport “have always been part of the conversation.”

Kevin Brown, chairman of the Mohegan Tribal Council, said sports betting is already moving in neighboring states, which should prod Connecticut to act.

“We are realizing this is another point at which we could be left at the starting gate,” he said

PHOTOS: The construction of Interstate 91 and 691 in Meriden
Throughout the late 20th century, interstate highways were constructed across the country. Two highways, Interstate 91 and Interstate 691, were constructed in Meriden.
Take a look back at photos from the construction of both highways in the city.

Stamford is paving, is your road next?
Barry Lytton
STAMFORD — The city boasts the largest municipal roadway system in Connecticut at 315 miles, which doesn’t include state roads like Boston Post Road — known here as Tresser Boulevard and Main Street.
The city’s Highways Division has a list of 132 roads to maintain. As of this month, the department was working on 10 of them after completing about 40, sealed cracks in four and was waiting on utilities or development projects to finish work before getting to dozens of others.
While waiting, city Traffic and Road Maintenance Supervisor Thomas Turk said he sometimes skips to the next project down the priority list, the so-called “draft rank.”
So who is next on the list, and still “pending” a maintenance project? That would be Largo Drive, ranked No. 31. No. 32, Glenbrook Road from Hope Street to Frankel Place, was paved in November.
According to the city’s Jan. 3 paving list, the next five Stamford roads to be sealed or paved will be Brook Run Lane, Fifth Street, Clearview Avenue, Crystal Street and Canal Street.

Bridgeport theater developer gets 2nd financing extension
Brian Lockhart
BRIDGEPORT — How long will it take for the developer of the downtown theaters to obtain financing — or, in the alternative, for Mayor Joe Ganim to come up with a graceful way during an election year to admit the project is dead?
On Friday, Ganim’s office told Hearst Connecticut Media that New York-based Exact Capital will get a second 30-day extension to come up with $56 million to renovate the historic Majestic and Poli Palace theaters and the Savoy Hotel along Main Street.
Exact was initially given a year by the city to get the money together. That deadline came and went Dec. 27, at which time City Hall said Exact would have an additional month to produce.
“OPED (the Office of Planning and Economic Development) has confidence in Exact Capital’s commitment to the city and project,” Rowena White, Ganim’s communications director, said in a statement Friday.
White said OPED has had “regular communications” with the developer and that the theaters endeavor “is no different than others that take longer periods of time due to the various financing challenges, the historic preservation elements and the overall complexity and size of the project.”
Ganim while running for mayor in 2015 had campaigned on re-opening the Majestic and Poli Palace, which sit boarded up, abandoned and decaying at a gateway to downtown.
But when the mayor in 2017 pushed for the City Council’s quick approval of the deal with Exact, there was speculation whether it would happen and if Ganim’s goal was to have a splashy development announcement to tout during his failed 2018 bid for governor.
The mayor has called Exact’s plans — which also envision nearby residential towers, one 18 stories tall — “the most exciting urban development project anywhere in this state.” So it would not be great politically for Ganim, who is seeking another four-year term and facing opposition from fellow Democrat state Sen. Marilyn Moore, to have to admit that the deal with Exact fell through.
Last month, City Council President Aidee Nieves had said Exact executives should come to town to meet with and brief that legislative body. She noted some newer council members were not involved in approving the 2017 deal for the theaters.
“I think it would be in a good faith effort for the developer to be there and not just hear it from the Office of Planning and Economic Development,” Nieves said.
But as of Friday, no such meeting had been scheduled, according to Councilwoman Maria Valle, a co-chair of the council’s economic development committee.
Councilman Ernie Newton, who helps run the council’s contracts committee, said that group should be involved as well. Like Valle, Newton was also not a part of the City Council that approved Ganim’s deal with Exact in 2017.
“This is a good example of when you rush projects through, these kind of things happen. Bridgeport has to do a better job on how we go after developers,” Newton said. “As (contracts) co-chair, we’re not doing business like this. We’re going to dot our ‘i’s, cross our ‘t’s, and make sure developers are serious and committed to do what they said, not just to have a ‘photo op’ and then nothing happens.”
Prior to taking on the Majestic and Poli Palace, Exact’s only other experience with a theater is the ongoing work at the Victoria Theater in Harlem. That project is funded and under construction, with no significant delays.
Exact’s proposal had been chosen from a handful of plans submitted to the city in early 2017. Late last September, as questions about whether Exact would come up with its financing mounted, Hearst filed a Freedom of Information Act request with OPED seeking all of those 2017 development proposals for the theaters and Savoy Hotel. As of Friday that nearly four-month-old FOI request was still pending.

Bergstein: Adding tolls would cut traffic on I-95
Hannah Dellinger    
GREENWICH — Improving transportation infrastructure, developing targeted career education initiatives and bettering conditions for existing businesses are the keys to growing Connecticut’s economy, according to Greenwich resident and PepsiCo Chair Indra Nooyi.
A packed crowd gathered for a community conversation focused on the state’s economic growth with Nooyi and state Sen. Alexandra Bergstein (D-36) at the Greenwich Library Cole Auditorium on Thursday night.
A freshman senator, Bergstein started the discussion by asking Nooyi what businesses look for when considering a move to a new state.
“The first thing we look for are whether the policies of the state government are business-friendly,” Nooyi said. “Also, is there a talented workforce? Is there a specialized workforce? Can I get my products out of the state easily? Is there airport access? Is the (transportation) infrastructure going to hold up?”
New, improved transportation options

Using harbors and waterways for more commercial transportation and adding commuter ferries to New York City could transform many communities in Connecticut, said Nooyi, who stepped down as CEO last fall. She is continuing as chairwoman of the board of directors for now.

Updating and improving deteriorating infrastructure to better serve commercial vehicles would also be a plus for prospective companies, she added.
But the most critical of the state’s transportation needs is finding a way to fix the traffic jams on Interstate 95, Nooyi said.
Bergstein, who has already introduced a bill to bring tolls back to Connecticut in her first weeks in the state Senate, said installing electronic tolls on I-95 would achieve that goal.
 Though a small group of protestors gathered outside the auditorium before the event to display their opposition to tolls, the audience inside cheered Bergstein’s proposal.“Congestion on I-95 is an enormous problem. And there’s a cost to that. The cost per resident is about $2,300 a year in excess fuel and lost time,” said Bergstein, who is the first Democrat in decades to represent the 36th District, which encompasses all of Greenwich and part of Stamford and New Canaan.
According to Bergstein, a driver who commutes about 50 miles a day would spend an average of $600 a year on tolls under her legislation.

“That may sound like a lot of money, but you would save $2,300 a year,” she said. “And you would get home to spend more time with your family.”

Implementing congestion toll prices — which would be higher at busier times — would reduce traffic, Bergstein said, because truck drivers would likely adjust their travel times to avoid higher prices, shifting to night travel instead of making the trek during rush hour. And adding an HOV lane would encourage drivers to commute to work together, taking more cars off the road, she said.
With about 30 percent to 40 percent of the state’s highway traffic made up of trucks and tractor-trailers, Bergstein said tolls would take the burden off taxpayers to pay for damage caused by large commercial vehicles from out of state.
The senator also suggested credits or exemptions for low-income families to create “true fair market pricing so we don’t disproportionately impact vulnerable people.”
Learn in Connecticut, stay in Connecticut
“We want young people to not just get their education in Connecticut, but to make a life in Connecticut,” said Nooyi.
Bergstein asked the business leader how public and private partnerships can be applied to education and job training to create a pipeline of skilled workers for businesses.
“Workforce development is required for business development,” said Nooyi. “We need to map out what kind training we need to provide to our future workforce.”
Companies that have left the state could return once they see Connecticut has the workforce the need, she said.
Bergstein floated the idea of offering student loan forgiveness to graduates of Connecticut universities who stay and work in the state for several years as an incentive to keep young people from leaving. By adding a pool of healthy young people to the state’s health insurance plan, the overall cost of insurance would go down, said Bergstein. A good insurance plan would be an additional incentive for young people to take jobs in Connecticut, she said.
Building better business relationships
The most effective way to bring companies into the state is by bettering relationships with the ones that are already here, Nooyi said, because business leaders will strive to bring more companies in their industries where they work.
Pointing to the insurance industry in Hartford, Nooyi said companies there have been on the front lines of recruiting more firms in their field to work in Connecticut.
Because the state was once a hub for high-end manufacturing, the buildings and structures previously used could be fired up again by the same companies if the state can persuade them to return, Nooyi said.
That infrastructure can also be revitalized and find new life, Bergstein added, citing media companies Blue Sky Studios, which has an office in the backcountry, and NBC Sports, which took over a former manufacturing plant in Stamford, as examples. “Why we became a hub for media is because of the financial service companies that used to housed here,” she said. “Those buildings have the infrastructure and capacity to create the product that the media is putting out.”
To achieve the bipartisan goal of renewing the state’s economic growth, Nooyi said a clear plan needs to be forged.
“We have to outline the vision we want for Connecticut,” she said.

Lamont talks grid reliability, offshore wind with DEEP staff
Benjamin Kail
Hartford — For Katie Dykes, the Department of Energy and Environmental Protection's new commissioner, the scariest briefing came right after Hurricane Sandy in 2012, when she was deputy commissioner at the agency.
"If the wind direction shifted 15 minutes later than it did, a substation in Bridgeport would have been submerged and we would have had no power to the largest city in Connecticut for months," Dykes told Gov. Ned Lamont, who toured DEEP headquarters and met with department heads and staff Friday afternoon.
Lamont peppered DEEP's energy team — comprising experts and attorneys with DEEP and the Public Utilities Regulatory Authority — with questions on upgrades and maintenance to the state's power grid, which faces aging infrastructure and threats from climate change, including sea level rise.
Kelly Porter, director of utility regulation for PURA, noted the grid's reliability had greatly improved over the last several years, with added vegetation management, system hardening and utilities "routinely upgrading."
"But as your system starts to age that's when it gets more costly," Porter added. "A lot of the distribution system was built out in 1960s and 70s when we had a lot of growth in Connecticut. We're starting to see that some of that is reaching the end of its life. That's one of the biggest drivers on electricity rates on bills: having to renew and refresh that distribution system."
After a brief discussion on the costs of underground wires, Lamont joked, "We're going to need wires to transmit electricity for the rest of our lifetimes? No Bluetooth?" Dykes responded that she hadn't seen a wireless electric distribution proposal from any utilities.
Part of a multi-agency review during his first weeks in office, Lamont said the tour gave him a fuller perspective of DEEP's duties, which range from land and permit issues, natural gas pipelines, wastewater management, forest protection, lifeguard recruitment and training, renewable energy procurement and helping to ensure the New England power grid remains reliable.
"I'm just going around learning what everybody does in the state ... so I can tell the story of what you do on behalf of the people," he told staffers. "Not enough people know what DEEP does and too many people take state government for granted."
Lamont posed a question to regulators following mentions of Millstone Power Station's previous hints of early retirement — a prospect experts at ISO New England in 2016 said would spark frequent and lengthy rolling blackouts.
"What's our backup?" Lamont said. "Let's say these guys say, 'Pay me a super premium or we're shutting down in three years?' And I say, 'Go ahead, make my day.'"
After a staffer quipped, "That actually already happened," Dykes noted DEEP and PURA were working together, and with ISO New England — the nonprofit grid operator and wholesale electricity market administrator — to ensure "we're getting good strong market design that supports our policy goals in the state."
In the state's zero-carbon electricity auction, DEEP selected a 10-year proposal from Millstone that amounts to about half the facility's 2,100-megawatt output, a move that Millstone owner Dominion Energy and lawmakers had desired for years.
Lamont and Dykes say they are enthusiastic about opportunities for renewable energy, however, including offshore wind and solar power.
Several states surrounding Connecticut are seeking large influxes of offshore wind within the next 15 years. Earlier this month Gov. Andrew Cuomo of New York almost quadrupled a previous offshore wind procurement target: from 2,400 megawatts to 9,000 megawatts by 2035. And Massachusetts, Rhode Island and New Jersey are all pushing for more than 1,000 megawatts of offshore wind.
Whether Connecticut will seek a specific offshore wind target, as recommended by many clean energy advocates, remains to be seen. Asked about the possibility, Lamont noted the state was already slated to "purchase a fair amount" from Orsted US Offshore Wind with its Revolution Wind project south of Martha's Vineyard. Lamont has said he supports further investments that will help New London become a regional wind power hub.
"We've got ambitious climate goals and we know offshore wind has a lot of benefits. It has a high capacity factor, it's running all the time and it performs in the winter, which is terrific," Dykes said. "We're in regular calls with those states to look at pooling our buying power. We're also looking at issuing an integrated resource plan which will really evaluate what our long-term goals should be."