MGM Construction Overview: Spending, Employment, and

Economic Impacts

Presented by Rod Motamedi, MBASenior Research Manager, Economic and Public Policy

ResearchUMass Donahue Institute

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Property Background

• Construction period was March 2015 through August 2018

• First integrated resort casino in the Commonwealth

• Urban casino in the middle of downtown

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The Data

• MGM provided us the data at the conclusion of each contract. In some cases, the data was in draft form.

• Contract summaries included– Worker hours, wages, ZIP, and limited

demographics

– Company ZIP, total contract value, subcontractors, and payment schedule

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Construction Components

• Hotel/Podium/Armory

• Enabling

• Garage

• Daycare and Church

• Offsite improvements

• Signage

• 95 and 101 State Street and 99 Union projects

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

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Construction Spending by Quarter

Enabling Garage Hotel/Podium/Armory

95/101 State and 99 Union All Else Monthly Average

Total: $573 million

Monthly Avg.: $12.7 million

Hotel/Podium/Armory

70%

Garage13%

Enabling9%

95/101 State and 99 Union

4%

All Else4% Spending by Component

City Contract Value ($M)Agawam $6.90 Chicopee $46.48 Holyoke $7.06 Ludlow $28.41 Springfield $83.96 West Springfield $2.67 Total $175.47

Did Not Meet Diversity Criteria

64.5%

Woman Owned21.7%

Minority Owned7.4%

Veteran Owned6.4% Spending by Diversity Criteria

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Workers and Wages

We estimate there were about 4,250 workers who worked 2.6 million hours over 16 quarters and were compensated $173 million.

FTEs: 1,251

Avg. Hours/Worker: 612 (approx. 15 weeks @ 40 hrs./week)

Avg. Hourly Comp/Worker: $66

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H&SC Summary Hours and Compensation

Geography Average HoursAverage

CompensationSpringfield 806 $45,212

Surrounding Communities 769 $47,640

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Workers by H&SC

Town/City WorkersAgawam 54Chicopee 185

East Longmeadow 44Holyoke 81

Longmeadow 8Ludlow 125

Springfield 509West Springfield 84

Wilbraham 30Total 1,120

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Race/Ethnicity of Workers

Hispanic44%

White/ Other35%

Black19%

All Else2%

SPRINGFIELD POPULATION

Hispanic34%

White/ Other38%

Black27%

All Else1%

SPRINGFIELD WORKERS

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Gender of Workers

Female13%

Male87%

SPRINGFIELD WORKERSFemale

7%

Male93%

MA WORKERS

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Veteran Status

No89%

Yes11%

SPRINGFIELD WORKERS

No94%

Yes6%

MA WORKERS

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Key Concepts for Economic Impacts

• How do economic models work? What are their structure and methods?

• What are the key results and how are they defined:

– Employment

– Output

– Value Added

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Summary of Employment Impacts

Total Employment 2015 2016 2017 2018 2019 Avg.Direct 189 697 1,629 447 1 593Business to Business (Indirect) 40 85 145 10 5 57Total Induced 133 446 1,000 338 83 400

Consumption-Based Induced 77 255 560 134 32 212Other Induced 56 191 440 204 51 188

Total 362 1,229 2,774 795 89 1,050

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New Economic Activity ($M)

Economic Activity

Total (Output) Net New (Value Added)Annual Avg. Cum. Annual Avg. Cum.

Metro Boston $52 $259 $32 $158 Southeast $9 $47 $6 $28

Pioneer Valley $82 $409 $49 $246 Central $23 $115 $14 $69

Berkshires $2 $12 $2 $8 Cape and

Islands $1 $6 $1 $4 MA $170 $849 $102 $512

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Timeline of Upcoming Products

PPC Operating ReportDecember 2019

MGM Construction ReportSeptember 2019

MGM Lottery Report December 2019

MGM New Employee Survey Report Spring 2020

MGM Springfield Real Estate ReportSeptember 2019

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Thank you!

For more information, contact:

Dr. Mark MelnikDirector, Economic and Public Policy Research

University of Massachusetts Donahue Institute

MMelnik@donahue.umassp.edu

www.donahue.umassp.edu

www.umass.edu/seigma