News and Features: Features
Springfield bets on sibling rivalry
The Picknelly brothers, with dueling casino proposals, are at the center of Springfield’s push for gambling
April 09, 2013
THE WHEEL OF FORTUNE
came to rest on the big money for Massachusetts two years ago when Gov. Deval Patrick signed legislation ushering the Bay State into the casino era. After decades of attempts by gambling proponents, the plans are well underway for three resort casinos and one slot parlor. The gambling legislation divides the state into three zones—Greater Boston, Western Massachusetts, and Southeastern Massachusetts —with one casino license for each.
The Picknelly brothers, Peter A., left, and Paul,
right are pushing competing casino proposals.
What is surprising is that the scramble in Western Massachusetts, where there are four applicants vying for the region’s single casino license, is just as fierce as the one in Greater Boston, where the biggest bucks are expected to be made. Even more surprising in the Western Mass. sweepstakes is the family drama, with two brothers from a storied Springfield clan going at it as rivals aligned with competing gambling firms.
The casino showdown is the latest chapter in a long-running saga of sibling rivalry, but this time around the future of the third-largest city in Massachusetts could also be at stake. Four years after a state-mandated finance control board straightened out Springfield’s troubled municipal books, the city is no closer to attracting large numbers of good-paying jobs for low- and middle-income residents. Until now. The prospect of a casino in downtown Springfield, and the promise of the several thousand new jobs it would bring, have heads spinning. If anything, Springfield is even hungrier for something to root for after the destruction wrought by a recent natural gas explosion and the 2011 tornado that tore through the city.
Peter A. Picknelly, the head of Peter Pan Bus Lines, cast his lot with Penn National Gaming, a Pennsylvania gaming operator that mixes Hollywood-themed nostalgia into its developments and earned nearly $3 billion last year. His brother Paul Picknelly, a hotel operator and real estate developer, teamed up with MGM Resorts International, the $9 billion purveyor of high-end Las Vegas-style glitz. Both firms have tantalized the town with talk of giving a shot in the arm to a downtown that goes comatose after sunset.
For some, the Picknelly brothers are the only Springfield business honchos willing to take big risks in a city where business leaders have more conservative inclinations. “The family has the most horsepower in the city of Springfield,” says Ed Hough, president of L.E. Belcher, a Springfield fuel wholesaler.
Later this year, Springfield voters will have their say in a referendum asking whether they want a casino. If they vote yes, and if the state gaming commission decides that one of the two Springfield plans is superior to the two other regional proposals—Mohegan Sun in Palmer or Hard Rock International at the Eastern States Exposition in West Springfield—one Picknelly brother will be poised to become an even bigger and wealthier player in the region. If the commission goes in a different direction, the Picknellys will have their fingerprints all over one of the most colossal letdowns in Springfield history.
Peter L. Picknelly, the late father of the dueling casino brothers, is everywhere around the North End gateway into downtown Springfield. An enormous high-top sneaker inside the city’s Peter Pan Bus Lines terminal sports his portrait and the bus “transportation center,” bears his name, as does a silver pyramid outside the terminal and the “Welcome to Springfield” sign nearby.
Picknelly took the Peter Pan Bus Lines brand that his Italian immigrant father launched during the Depression and turned it into one of the largest private bus companies in the country. The elder Picknelly was the man local groups could count on to steer a successful capital campaign or pick up the tab for the annual holiday lights extravaganza. “Every city should have a Picknelly family,” says former Springfield mayor Michael Albano, now a member of the Governor’s Council. “If we needed $50,000 for a day care center, I could go to Peter senior quietly on a Saturday morning up in his office… make the case, and he would do it.”
The Picknelly interest in gambling started with the father. Nearly 20 years ago, he led an unsuccessful campaign to build a casino to rev up an ailing city. It was a novel idea in the 1990s. At the time, Gov. William Weld and state lawmakers were focused on a New Bedford casino compact with the Aquinnah Wampanoag, but Beacon Hill agreed to consider a casino in Springfield if voters approved the idea. The Catholic Church campaigned hard against gambling, and its strong opposition helped persuade voters to narrowly reject referendums in 1994 and again in 1995.
That Picknelly stood to make serious dollars on his casino plan goes without saying, but few dispute that he also embraced the idea of a casino as an economic lifesaver for his beloved hometown. “He really believed that it would not only be helpful to him financially, but that Springfield needed a kick in the butt of some kind,” says Dr. Mark Mullan, a Springfield internist who worked with Picknelly in the 1990s on an unsuccessful effort to build a baseball stadium and attract a minor league team. Mullan does not, however, share the Picknellys’ belief in the benefits of a casino. He is treasurer of Citizens Against Casino Gaming and a leading opponent of a casino in Springfield.
The elder Picknelly had a well-known taste for gambling. Rolls-Royces were his cars of choice and he snatched up the vanity license plate “gamble” for one of them. According to Driving Vision: The Story of Peter Pan Bus Lines, a family history that his company published in 2000, Picknelly enjoyed trips to Foxwoods, the first destination-resort casino to open in the East outside of New Jersey.
The thrice-married Picknelly, who died in 2004, had three children from his first union: Mary Jean, Peter, and Paul. They followed their father into the family businesses, and his hard-driving, 24/7 work ethic colored their lives. “We’re close in a business way more than other ways,” the elder Picknelly told a University of Massachusetts Amherst interviewer in 1995. “We don’t do family picnics or Sunday dinners.”
Picknelly never wavered from his conviction that casinos could save Springfield. “I go to Foxwoods on occasion, and I see the development down there, which is huge,” he said in Driving Vision. “We could have had that here.”
Since Springfield’s first go-round with gambling, casinos have spread from woodsy outposts like Foxwoods and Mohegan Sun in Connecticut to struggling urban centers such as Detroit, Toledo, and Bethlehem, Pennsylvania, communities that cast about for jobs and any tax revenues they can get without going to taxpayers for new levies. The jury is out, however, on whether an urban casino can create enough jobs and local tax revenue—and draw enough out-of-towners —to reverse the fortunes of cash-poor cities and towns.
Les Bernal, executive director of Stop Predatory Gambling, a national anti-casino advocacy group, says the industry can’t point to a single example of a depressed urban area that has been revived by gambling. “They can’t find a location in America that has come back because of a casino,” says Bernal.
Thin and wiry right up to his brown, spiky hair, Peter A. Picknelly, Peter Pan’s present-day chairman and CEO, gushes about his partnership with Penn National. “Our plan is really my dad’s view on steroids, if I can use that example,” he says. “It is bigger than what he envisioned and it includes more property [and] it revitalizes Union Station,” he says, referring to the city’s shuttered train depot.
Picknelly, 53, who wears glasses like his father and favors business casual attire, is putting up 50 percent of the $807 million for Penn National’s “Hollywood Springfield” casino project in the North End of the downtown. The city bus station, now near a gloomy no-man’s land of empty storefronts, modest cafes, and clothing shops, as well as the current headquarters of Springfield’s newspaper, The Republican, would be replaced by the casino complex. The paper’s parent company executed an option to sell the parcels it owns to Penn National. Under the plan, The Republican would split its news and printing operations between two new locations. Meanwhile, Peter Pan’s bus operations would move to a renovated Union Station.
Peter A., as he is sometimes known to distinguish him from his father Peter L., admits he will to do “whatever it takes” to get a casino in Springfield—even if it means reluctantly talking to a journalist. “I’m not a celebrity, I’m kind a shy guy,” he says.
“Neither one of them is as flamboyant and as outgoing as their dad,” says Jeffrey Ciuffreda, president of the Affiliated Chambers of Commerce of Greater Springfield, about the Picknelly brothers.
And neither man is as bullish about their hometown as their father. Peter and Paul were ready to throw Springfield under the bus for Palmer. Each brother had made his own investments in Mohegan Sun’s Palmer casino plans. The Northeast Gaming Group, the company working with Mohegan Sun, has sued Peter Picknelly, for allegedly backing out of a project, and Penn National, for joining him in the competing Springfield venture.
| Penn National billboard hovers above Springfield Bus Terminal|
Peter Picknelly declined to comment on the litigation, except to call it “completely frivolous” and “completely extortion.” At press time, Northeast had also informed Paul Picknelly and MGM about conflicts between the current Springfield project and his earlier Palmer investment, but has not taken any action. How the litigation might affect the brothers’ two bids in Springfield is unclear.
Peter, a married father of four whose wife is a Peter Pan Bus Lines vice president, was never interested in anything else other than joining his father and running the family business. Like his father, he dropped out of college to move back to Springfield where he’s lived ever since. “That’s probably one of the poorer decisions I’ve ever made,” he says of his decision to leave Boston University after two years. (His father quit Northeastern University after one year.) Picknelly started out as a bus dispatcher in Boston; by age 25, his father had made him company president. “There’s diesel fuel in my veins, that’s what I like to do,” Picknelly says.
Hough, the Springfield fuel company executive, who is a long-time friend of the younger Peter Picknelly, says Peter is no longer concerned about being in his father’s shadow. Peter Pan Bus Lines is a $100 million company with 700 employees, a 250-vehicle fleet, and a partnership with Greyhound, the country’s largest bus company. He owns and manages his own real estate company, the Opal Real Estate Group, and has diversified into areas like wholesale firearms distribution and conveyor belt manufacturing.
His business muscle has translated into political clout. He is a prolific political donor who’s made sizable contributions to the state Democratic Party and to a bevy of mostly Western Massachusetts lawmakers, including Springfield Mayor Domenic Sarno and Bruce Stebbins, a former Springfield business development administrator and city councilor who now sits on the gaming commission. Picknelly served on Gov. Deval Patrick’s transportation transition team in 2006.
The fraternal showdown for the city’s biggest business deal in decades has plenty of people scratching their heads. Even the Northeast Gaming Group’s legal complaint delves into the brothers’ conflict, alleging that Peter Picknelly “wanted to have a greater interest in the proposed Palmer casino project than his brother Paul Picknelly had.”
Peter A. takes a deep breath, and then resorts to a double-negative, when asked the question on everyone’s mind: Why are he and his brother on opposite sides? “Paul and I do not not get along by any stretch,” he says. “He is my brother; I love him. We simply disagree on where the best location is” for a casino. “My family has been pursuing this location for two decades now,” Peter adds, referring to the North End site. “You have to ask him why he charted off course, I guess.”
Mullan, the Springfield doctor active with the local anti-casino group, says the brotherly competition is prompting lots of speculation, most of it uninformed. “I was surprised that they would be on opposite sides, like everybody was,” says Mullan. “There were people [who thought] it was a Picknelly family plot, that as long as one of them got it, it was good for them. Then I heard through the grapevine…that they weren’t talking to each other for a period of time. I think, as in most things, the truth is somewhere in the middle.”
Paul Picknelly, 52, is more of a behind-the-scenes operator who hasn’t been seen around town promoting the MGM brand as much as his brother does for Penn National. As a young man, Paul left Holyoke Community College to work for a Florida bus line that his father co-owned. Eventually, he returned to work at Peter Pan and moved up to chief operating officer.
| Penn National promotion inside Springfield bus terminal|
A Peter Pan official described him this way in the company-published family history: “Paul was a great dispatcher, a real operations-minded person. He was like his father that way, able to think quickly on his feet, to be able to solve problems or foresee something coming down the road and prepare for it before it happened.”
Despite Peter Picknelly’s suggestion that they simply disagreed on the best location for a casino, the rift between the brothers did not begin there. When the three Picknelly siblings started working at Peter Pan together, their relationship, according to a 1996 Forbes article, disintegrated to the point that their spats demoralized employees and sometimes put Mary Jean, who ran the tour groups division, in the middle. To preserve his carefully constructed business empire, the elder Picknelly came up with a solution: In 1993, he created a real estate group by acquiring a downtown Sheraton hotel and the adjacent office building and installed Paul as the head of it, while leaving Peter at the helm of the bus business. “Life has been so much better since he’s been gone,” a relieved Peter told Forbes.
The jewel in Paul’s crown is Monarch Enterprises, the real estate management and development company located in Monarch Place, an attractive office complex of rust-colored, veined-marble walls anchored by the Sheraton. (His siblings are directors of the hotel’s corporate entity.) The married father of two, who lives in nearby Hampden, also owns and operates the Hilton Garden Inn near the Basketball Hall of Fame, as well as one hotel each in Worcester and Holyoke.
Paul Picknelly is a minority investor in the $850 million MGM project (MGM declined to put a dollar figure on his exact share), which is proposed for the tornado-scarred South End of downtown Springfield. He declined to be interviewed for this article. In a statement provided to CommonWealth, he described why he pursued a deal with MGM. “I had spoken with a lot of casino operators, but none were as invested as MGM Resorts in a vision that would revitalize this city’s once thriving downtown area,” he wrote. “It was clear that MGM’s team and I envisioned the same outward-facing, community-enhancing resort casino model that would build on all that is good about Springfield.”
NO FURTHER BETS
With words like “renaissance,” “ripple effect,” and “game-changer” getting tossed around like poker chips, it’s hard for city officials to resist the allure of two private companies promising to pay for a major downtown overhaul. Both casino operators say that their retail, dining, and entertainment complexes will also push their patrons into surrounding area restaurants, small businesses, and existing entertainment venues. A stone’s throw from the bus station, the soon-to-be renovated Paramount Theater, owned by the New England Farm Workers Council, would be leased to Penn National to focus on live events. MGM plans to partner with the MassMutual Center and other local venues rather than build its own dedicated entertainment arena.
| Penn National buttons|
In a high-poverty, majority-minority city of 153,000, where unemployment is more than 10 percent, there are more permanent jobs up for grabs with a casino than Springfield has seen in a long time. The Penn National plan calls for 2,400 jobs, while MGM’s assumes 3,100 will be created. Penn says its salaries will average $40,000 plus benefits; MGM goes a bit higher, at $50,000 plus benefits.
Penn National and MGM are already spreading cash around town, from grocery giveaways to after-school programs, even before a shovel goes into the ground for a casino. “Look at Springfield’s plight today,” says William Hornbuckle, president of MGM Springfield. “What Fortune 500 company is knocking on [Springfield’s] door and saying, ‘Hey, guys, I’d like to come to your community and invest $800 million.’”
In the short-term, Hornbuckle is probably right. With Springfield up against its Proposition 2½ levy limit, city leaders have nowhere else to go to generate tax dollars if they want to avoid more employee layoffs and cuts in city services. There are other projects that Springfield can move forward on whether or not a casino comes to the city, including the long-stalled redevelopment of Union Station, which is getting an infusion of state and federal funds. But reviving the train facility, a dream of the elder Picknelly, is in a kind of limbo, along with other downtown construction, until the casino question gets sorted out. And none of those projects add up to the kind of dollars that casino operators are willing to invest.
One question the state may have to take a gamble on is whether city leaders in Springfield, only four years removed from state financial control over municipal affairs, are ready to manage the annual windfall of anywhere from $15 to $20 million in new revenues from a casino. There are early indications that some officials are already overwhelmed by the task. With residents lining up with their to-do lists at a recent meeting, City Council President James Ferrera repeatedly asked Springfield’s hired gaming consultant if the casino agreement could make MGM or Penn National responsible for selecting the specific projects they would finance with their payments to the city. The consultant informed Ferrera that it was the job of Springfield officials, not the casino operators, to decide how to spend the money the operators agree to pay the city.
The city’s mayor, Domenic Sarno, will finalize a host community agreement with one or both of the casino operators, spelling out the parameters of what the companies will do on issues such as property tax revenues, traffic, mitigation, and the like. One or both agreements will then go to the city council, which must ratify the decision, and then the plan or plans will go to the ballot. A referendum could be held as early as the June special election for US Senate or as late as the November general election.
The Episcopal Diocese of Western Massachusetts and the Council of Churches of Greater Springfield have come out against casino gambling, basing their arguments more on socioeconomic grounds than moral ones. The fear is that poor residents will turn to gambling as a solution to their money troubles and end up worse off. The Catholic Church, which sold a former rectory building to Paul Picknelly’s MGM-affiliated company, has not yet mounted opposition comparable to the forces it marshaled years ago.
|A model of the MGM Springfield casino complex inside the firm's information center on Main Street|
Magdalena Gómez, a co-founder and artistic director of Teatro Vida, a local theater company, fears that if a casino comes to town, smaller arts venues won’t be able to compete and that more than a few Springfielders will end up poor and broke like her father, a problem gambler. “Casinos are no different than a peep show,” Gomez says. “Put in a quarter, get a glimpse; if you want more, you have to put in another quarter.”
Some in town are convinced that one of the Springfield proposals is a shoo-in to win the Western Massachusetts gaming license, largely because the struggling city needs an infusion of investment. But others are not so sure. The casino statute calls for the gaming commission to consider factors such as the inclusion of workforce training programs and the likely impact of a casino on local businesses in the host community and neighboring towns. The statute, however, is silent on whether an urban or rural casino is better.
Albano, the former Springfield mayor, doesn’t buy the argument that a rural site would better shield lower-income urbanites from the pitfalls of gambling. He says people can drive to the Connecticut casinos or take a bus any day of the week. “The options are there,” he says. But Albano has gone from vocal casino booster while in the mayor’s office to skeptic. Laying aside the impressive posters, models, and computer-generated renderings of a new and improved downtown Springfield that the casino operators eagerly display, he wonders what a casino can really do for the city over the long-term. He says gambling has hardly been a magic elixir for Detroit, a city with three casinos that is in such desperate straits it was recently taken over by the state of Michigan. “The casinos are struggling, Detroit is struggling,” Albano says. “Springfield is not unlike Detroit in a lot of ways.”
Though most observers think residents are likely to give gambling a thumbs up when a Springfield casino plan is put to a citywide referendum, it’s possible Springfield voters could nix the casino idea, in which case the story ends there. Barring that outcome, the city faces two sets of risks.
Should one of the Picknelly brothers fulfill their father’s dream and land a casino for Springfield, the champagne corks will pop and city leaders and casino supporters will undoubtedly extol the wonders a gleaming new gambling complex will bring to their beleaguered community. Proponents say a casino is just the economic boost that the city needs to hitch to its modest financial recovery and rebuilding efforts following the tornado. The risk is that opponents could be vindicated and the promise of a casino-driven rebirth doesn’t pan out.
The other risk is that the city loses out in the gambling sweepstakes and the Western Mass. casino goes to Palmer or West Springfield. The Picknellys, Penn National, and MGM will move on to new deals. But Springfield has banked everything on a casino. Unlike nearby Holyoke, where Mayor Alex Morse recently abandoned a brief flirtation with casinos and turned back to his pledge to focus on the city’s innovation and arts economy, Springfield does not have a true Plan B to fall back on if the casinos go somewhere else.
Things aren’t quite as dire in Springfield as they were several years ago. Since 2009, the year the state-authorized control board returned management to city officials, Springfield has produced balanced budgets and received stable bond ratings. “Everybody, everybody, thought that we’d fall of the face of the earth,” says a defiant Mayor Sarno, his voice rising. “The exact opposite has happened.”
Still, the mayor would need to put on quite the poker face to say he’s not banking on a casino—and the Picknelly family—to speed things along.