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UMass Study States MGM Springfield Added Half A Billion To Economy

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The first year of MGM Springfield was far from the success that developers promised. The University of Massachusetts, however, provided bit of good news for those developers with a recent UMass MGM Springfield study.

Funded by the state’s gaming commission, researchers at UMass Amherst’s Donahue Institute looked at several aspects of the casino’s construction. The conclusion is that it was a net positive for Massachusetts.

Things to know about the UMass MGM Springfield study

It’s important to note that the study focused on the casino’s construction, not its operation. The study is not saying that MGM Springfield has added a half-billion dollars to the local economy.

Rather, the study states the process of building the casino achieved that. Previous connections between MGM and UMass are worth noting, as well.

During the construction process, MGM helped fund a jobs training program operated by UMass Amherst. The relationship was symbiotic, as the local contractors that built MGM Springfield definitely benefited from the program.

While the impact is significant, it needs to be tempered. City and state governments provided tax breaks to attract MGM to Springfield, so the economic effects should account for that.

With those things in mind, the numbers from the study show the positive effect reached more than just Springfield.

Details on the findings presented by UMass researchers

One of the prominent points made by the study is that every county in Massachusetts was impacted by MGM Springfield’s construction. The report says that the counties closest to Springfield, however, felt the most significant effect.

Of the $573.2 million spent to construct the casino, $373.8 million went to contractors in the state. The report says 2,963 of the 4,249 workers employed to build the casino were Massachusetts residents.

The impact was larger than just the funds spent on construction and the 1,000 temporary jobs, however. The study says that for every two dollars spent on construction, another dollar was spent on additional activity.

Put more simply, the workers had to purchase clothing, food and a place to stay while working on MGM Springfield’s construction. Because of that, every dollar paid to construction workers resulted in $1.29 in income for other businesses.

While that all sounds spectacular, again, details presented by the same researchers at the Donahue Institute temper the excitement.

Secondary study complicates the construction’s impact

The researchers also did a study on the impact MGM Springfield’s construction had on the local real estate market. Those findings aren’t as positive.

The study found that rents in the areas closest to the casino increased before and following the awarding of the license. Researchers noted a spike in sales of single-family homes in the same area.

The findings are less conclusive, however. It’s likely the casino construction played a part in increased rents and home sales, but it’s difficult to state that it was the sole cause.

MGM Springfield’s construction was a boon for the economy in Massachusetts. While the casino’s operation has yet to produce similar results and the state invested in that construction, it was a good start for the casino.

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Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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