Saturday December 1, 2012

BOSTON -- Ameristar Casinos announced Friday it is ending its bid to develop a $900 million resort casino on a former industrial site in Springfield, leaving just two companies to compete in the city.

Las Vegas-based Ameristar, which in January completed a $16 million purchase of a 40-acre former industrial site, said while it still considers its casino proposal superior to others in the region, it did not believe the likelihood of winning the sole western Massachusetts casino license was strong enough to continue its pursuit.

"This was a difficult decision that will unfortunately result in us not being able to bring a world-class casino entertainment facility to western Massachusetts," Gordon Kanofsky, the company’s chief executive, said in a statement.

MGM Resorts International and Penn National Gaming also have proposed resort casinos in the city.

"Obviously the city is very disappointed in Ameristar’s decision to withdraw from the competition," Mayor Domenic Sarno said in a statement Friday. But the mayor said he remains confident that MGM and Penn Gaming will engage in a "robust competition" to win the support of the city and its residents.

Sarno announced earlier this year that the city would engage a casino selection process when it appeared that at least four and as many as six companies might seek to develop gambling facilities in the region’s largest city. But only the three companies -- Ameristar, MGM and Penn Gaming -- submitted preliminary applications before the Oct. 11 deadline.

The city plans to select and negotiate a host community agreement with one of the companies, though it has not ruled out the possibility of negotiating with more than one firm. Any agreement would have to be approved by voters in a referendum likely to be held next year.

MGM and Penn Gaming have until Dec. 14 to submit a $250,000 application fee to the city and until Jan. 3 to submit more detailed proposals, said Kevin Kennedy, the city’s economic director.

"I see no reason to change the process," Kennedy said. "All this does is basically eliminate one of the competitors."

The Massachusetts Gaming Commission will have the final say on awarding the western Massachusetts license, one of three regional licenses allowed under the state’s year-old casino law. Mohegan Sun, which has proposed a resort casino in Palmer, also is expected to compete and it appears a plan may also emerge in Holyoke.

In addition to the $250,000 Springfield application fee, Ameristar also would have been required to submit a preliminary application along with a $400,000 entry fee to the state commission by next month if it wanted to continue in the competition.

The company’s plan included a 500-room hotel along with the casino.

Ameristar said Friday it had not yet made any other plans for developing the former Westinghouse Electric Co. site on Page Boulevard, near Interstate 291. But the company said it believes the size and location of the site makes it attractive for other large-scale developments, a sentiment echoed by Kennedy.

In Holyoke, Mayor Alex Morse set a Friday deadline for interested casino developers to submit a $25,000 fee to cover the city’s costs of reviewing the proposals.

Morse took office in January after running on a staunch anti-casino platform, but announced earlier in the week that he had changed his strategy and would entertain casino negotiations.