 So, good morning to all and good morning to my fellow commissioners, Commissioner O'Brien. Good morning. I am here. Commissioner Hill. Good morning, everyone. I am present. And good morning to Commissioner Skinner. Morning, everyone. I'm here. Great. Thank you. This proceeding is an adjudicatory proceeding and requires me to really read into the record quite a long narrative. So I thank you for your patience and understanding, but it will outline our proceeding and it will explain to all the objectives. So, good morning. And today is Monday, April 11th, 2022. This is an adjudicatory hearing before the Massachusetts Gaming Commission relative to the request for interim authorization for transfer of interest related to MGM Springfield. Before we get started, I want to remind everyone that this meeting is being recorded and it is being screened. My name is Kathy Judd-Stein and I am the chair of the commission. I am joined today by my colleagues, commissioners Eileen O'Brien, Brad Hill, and Nikisha Skinner. The entire commission will preside over the hearing and decision of this matter. This hearing is convened pursuant to 205CMR 101.01, paragraph 2, subsection D, and will be conducted in accordance with 205CMR 101.01, the Informal Fair Hearing Rules outline in 801CMR 1.02 and chapter 30A of the Massachusetts General Laws. I would also like to notify everyone, as I mentioned, that the first hearing will continue to be recorded. A notice of hearing dated April 5th, 2022 was issued in the matter to the parties. Therein it identifies the issues that this hearing is intended to address. Though everything raised in the IEV investigative report is in consideration here, the commission has indicated that it will specifically be considering the issue presented in 205CMR 116.10, subsection 5, relative to interim authorization. That standard requires the commission to determine, quote, whether after initial inquiry into the transferee's suitability, any apparent disqualifications have been revealed, or there is any other known reason why a positive determination of suitability may not ultimately be achieved. Close quote. To that end, the cited regulation sets out the specific considerations in making a decision in this matter. They include the following. 1. Whether the proposed transferee has submitted all RFA-1 applications as required by 205CMR 115.01, subparagraph 3. 2. Whether the proposed transferee has submitted a fully executed trust agreement in accordance with 205CMR 116.10, subsection 6. Whether the proposed trustee has satisfied the qualification criteria applicable to a key gaming employee executive in accordance with 205CMR 134.00, whether there is any preliminary evidence of anything that would serve to disqualify the proposed transferee from licensure in accordance with General Laws, Chapter 23K, Sections 12 and 16, or there is any other reason known as to why a positive determination of suitability may not ultimately be achieved. Whether the proposed transfer would violate 205CMR 116.09, sections 3 or 4, and section 3 is inapplicable to this proceeding, but section 4 addresses whether the transfer will result in the transferee having an interest in more than one gaming license. Whether the proposed transferee has certified that they are unaware of any reason why the proposed transferee would not be found qualified pursuant to GL, Chapter 23K, Section 12 and 16, whether it is in the best interest of the Commonwealth for the gaming establishment to continue to operate pursuant to interim authorization. And finally whether the proposed transfer will result in a change of control and if so whether the transferee has agreed to assume all of the terms and conditions of the transfer's gaming license. There are three parties before us today and all are represented by legal counsel. I will ask that Mr. Nozzle, Mr. Alfano and Ms. Hall to each please identify yourself and your teams and advise the commission as to whom you represent as applicable. Let's start with Ms. Hall. Good morning everyone. Heather Hall for the Investigations and Enforcement Bureau, and here with me today we have Financial Investigator Paul Eldridge as well as Massachusetts State Sergeant David Collette, and we will have available the Chief of the Financial Investigations Division Monica Chang as well as Financial Investigator Matt Jordan. Okay. Mr. Nozzle. We are at Jed Nozzle on behalf of MGM Resorts International, MGP Growth Properties and their relevant affiliates. We are joined today, or I am joined today by Patrick Medamba, Senior Vice President and Legal Counsel for MGM, Laura Norton, Senior Vice President and Legal Counsel also for MGM, Jessica Cunningham, Senior Vice President and Assistant Corporation Secretary for MGM Resorts, and Gus Kim, Vice President and Legal Counsel, MGM Northeast Region, which of course includes MGM Springfield. Okay, and good morning Mr. Alfano. Good morning, Chair. I'm here today on behalf of Vici and its related entities. With me are Mr. John Payne, who's the President and Chief Operating Officer of Vici. This is Samantha Gallagher, the company's general counsel. Elena Kyle, Associate General Counsel. We have Mr. Carl Satisanti on the line who is the trustee designated by Vici. And also with me as counsel is Mr. Michael Fabius is with Ms. Kyle in the same place. We have our individuals who are available as needed today. Edward Petoniak, who is the Chief Executive Officer of Vici, and Mr. David Kieske, who is Executive Vice President, Chief Financial Officer and Treasurer of the company. Thank you. At the conclusion of my opening comments this proceeding will commence with opening remarks. The party will be offered an opportunity to make a statement, though it is not required. After opening statements, we will move to the presentation of the evidence in this matter and the IEP will be called upon to present its findings as described in the investigative report. Any commissioner may ask a question of anybody presenting information at any point during or following the presentation. At the conclusion of the IEP's presentation, each of the petitioners through counsel will be afforded an opportunity to ask questions of any individual who presented information on behalf of the IEP relative to any matter addressed in the investigative report or to which here she spoke. If for some reason we miss your inquiry commissioners, you can use the device of the hand wave that we now have or simply speak up just because of the virtual capacity today. At the conclusion of the IEP's presentation, the petitioners will each be given the same opportunity to make a presentation. We may call any witnesses and present any other evidence they desire. The commission has directed the notice of hearing that at a minimum the following individuals be available if called upon to testify at this hearing on behalf of the petitioners and are prepared to address the issues I've previously outlined, as well as any matter addressed in the investigative report. And these individuals are Edward B. Pattaniak, Chief Executive Officer and Director of Beachy, John Payne, President and Chief Operating Officer of Beachy, Samantha Gallagher, Executive Vice President, General Counsel and Secretary of Beachy, and Mr. Sadahti, the named trustee. Additionally, the commission may require any of the individuals, including the individual qualifiers identified in the investigative report to address the hearing, to address any matters relating to the proposed transfer. As before, any commissioner may ask any question of any witness or presenter at any time during or after any presentation, and the IEP may ask any clarifying questions of any presenter at the conclusion of the MGM or Beachy presentation, respectively. Either party may raise any objection it desires at any time. However, the basis for all objections must be clearly stated. And finally, at the conclusion of the presentations of all of the evidence, the IEP and petitioners will be provided an opportunity to make closing remarks summing up their view of the evidence. Before we begin, I understand that there are a number of exhibits for consideration at this hearing that have been exchanged by the parties in advance. There are quite a few. The exhibits are as follows. Exhibit A will be the notice of hearing dated April 5, 2022. Exhibit B will be the letter from Attorney Nozzle and Attorney Alvino, dated February 18, 2022. Exhibit C will be the executed amended Springfield nominee trust dated April 1, 2022. Exhibit D will be cover letter relative to the transaction from Attorney Hall dated April 4, 2022. Exhibit E will be the IEP's investigative report regarding interim authorization for MGM Springfield Beachy transaction dated April 4, 2022. Exhibit F will be the document containing charts A and B, which illustrate the corporate structure pre and post transaction. Exhibit G will be the exhibit packet that accompanies the investigative report and contains checklists further illustrating the IEP's investigative efforts. These items have been marked confidential in consideration of the amount of personal and sensitive information that they contain. Exhibit H will be the master lease to which the property will be subject. Exhibit I will be the PowerPoint presentation prepared by the petitioners describing the transaction. Are there any objections to any of these exhibits being marked and entered into evidence? None on behalf of Fiji. Thank you Mr. Arbeno, Mr. Nozzle. I hate to do this to you, Jed, but you are on mute. Thank you. Yep, sorry, Chair. No problem. And did you say none, Jed? We couldn't hear you. Yes, Chair. No objections, thank you. Okay, thank you so much. And as I had said many times, we're not living a day unless we've said you're on mute. So, and now, is there any concern for you, Ms. Hall? No, there's not, Chair. Thank you. Thank you. Okay. Thank you. Those exhibits shall be admitted into evidence. Thank you, Todd. Councilor Grossman. The purpose of ensuring a clean record, I ask that the parties when possible please make reference to the aforementioned exhibit letters when referring to any of these documents. If either party would like to have any additional documents entered into evidence during the course of the hearing, please ensure that they are properly introduced and marked for the record. The commission anticipates that its inquiry at this proceeding will be related to the matters addressed in the investigative report and contained in the notice of hearing. In the event that a line of questioning conducted by the commission moves into an area that has not been included or the report or notice, but that is material to the final determination of this matter. Any party may request a recess in the, excuse me, in the proceeding in order to review the issue. The commission will make a final decision at the conclusion of the evidentiary portion of the hearing. The commission will elect to deliberate privately outside of the view of the parties. That decision has been made prior to this time in the interest of being consistent with our past practice. In either event, if at any point during the commission's deliberations determines that further testimonial documentary evidence is desired, we do reserve the right to ask the appropriate party to provide such evidence prior to final decision being made. And ultimately a written decision will be issued. We will now swear all the witnesses in. Council are all the individuals you anticipate presenting testimony in this manner present on this column. I believe you've indicated so. Could I get that firmed once more. Yes, that is so. Okay. Yes, chair. Okay. So for those who will be testing at this proceeding, please raise your right hand. Thank you. Oops, my apologies, everybody. A little bit of a glitch. A quick note to Monica and Matt that you should also raise your hand because you even though you're not directly on maybe called. So, if you could also be great. Thank you. Thanks. Good reminder. I just actually put myself into a little bit of a vacuum here everyone so just bear with me. Okay, do you solemnly swear that the testimony you will provide before the commission at this proceeding will be the truth the whole truth and nothing but the truth. If you could. Yes. Yes. Yes. Thank you. And I'll have responded to the record in the affirmative. Okay. So given simply the extensive number of exhibits in this matter proceeding of this nature necessarily requires a consideration of a wide variety of information that takes several forms. Some of the information documentation may include commercially sensitive or personal and protected information. The discussion of such information may result in an unwarranted invasion of an individual's personal privacy or may place an entity at a competitive disadvantage if such information were to be publicly discussed. For the commission to be able to effectively and diligently execute its legal obligations prior to making a final finding relative to interim authorization. For the commission of liberty to fully inquire relative to any of these sensitive matters without compromising the individuals or entities involved. To do otherwise would be at a minimum unfair and potentially unlawful. Accordingly with the ascent of my colleagues we will exercise the discretion afforded in accordance with 205 CMR 101.01 paragraph seven. This is proceeding to the public in order to fully address a few preliminary matters that need to be addressed. In this case, the commission is simply exercising a procedural mechanism. The commission tends to reopen the proceeding to the public and the streaming line. Before we close the proceeding to the public, I'd like to address one last matter. It is my understanding that a pre hearing conference was conducted this past Tuesday with representatives of the petitioners, the IEB and our general council at which procedural and evidentiary issues were discussed. Before we begin to either petitioners or IEB have any preliminary issues or objections they would like to raise. Not on behalf of Vichy. Okay, no objections to raise there. Thank you. And IEB are you set to proceed. Yes, that's correct. No objections. Okay, excellent. Thank you. Commissioners at this point. Would you like to offer any thoughts relative to closing the hearing to the public for the reasons I previously discussed. Commissioner, I'm going to go through. I'm going to ask each of you. Commissioner O'Brien, are you set to go to proceed with a close proceeding. I am manager. Okay. Commissioner Hill. I am as well. Thank you and commissioner Skinner. Also set. Thank you. Thank you. Okay, so this is almost a bit of a challenge. I'm just standing that we can now actually leave this virtual meeting. And we will be able to regain entrance to the public forum at the conclusion of our of our private of our private hearing. So, again, we can leave and we will see you you have an invitation in your schedules, which will allow you access to the private session. Okay, thank you everyone and again to all thank you for your patience as we navigate this complex matter. So as a heads up, it looks like we are able to just reason we've basically restarted the previous stream that we were on so we're good to go I'm going to leave this hearing will resume shortly. Graphic up on the screen and then when we are ready to restart I can stop sharing my screen and take it down. Great. Thank you so much Dave, not a problem. Yeah, so we are still we're good to go on the on the original one that we're on so someone just give me a holler when we're ready to go. When the chair returns. I gave her the update though so great. Dave I understand that we would be all set for streaming. We should be good I can take down the shared screen I've got whenever we are ready to go. Yeah I think you can go ahead. Thank you so much. Thank you everyone a couple minutes later than I anticipated but I'm just having a little bit of a technical issue. That's been worked on as we speak so thank you. We are resuming the adjudicatory hearing and public form that we started at 10 o'clock this morning. We had a short session in private to address a procedural matter and I want to remind everyone because we are meeting virtually and we are recording this meeting. I do want to do a roll call so Commissioner O'Brien. I am here. Commissioner Hill. I am here. And Commissioner Skinner. I'm here. Thank you. I'm going to return to where we were before that earlier private session. And I'm going to now ask the petitioners beginning with the style battle to please proceed with any opening remarks that he would like to make on behalf of the petitioner. And if it is your intention to stipulate to some, or all of the investigative report which has been marked as exhibit E. This is what this juncture as well. Thank you, Madam Chair. We do stipulate to all of the conclusions of the IEB report in every material respect. So as for an opening, what I'm about to say maybe too brief to actually qualify as an opening but if I if I may I did want to say for the record that we are here today, seeking interim for the VCHI acquisition of MGP and that the evidence before the commission, both the IEB report and the testimony here today will show that all of the regulatory requirements of 205, CMR 116105 are met. You listed them all earlier, I will not repeat them here. But if I could just say that the evidence will in particular show that as with the prior analogous transactions, the commission has looked at the GLPI transaction and the first MGP transaction. There will be no change in control of the licensee as a result of this, this transaction. And for those reasons we're asking that it be approved. The only other thing I if I could add is that I know I speak for VCHI when I say very much appreciate the thoroughness and professionalism. And F just plain old effort that all of the commission staff put into this process. So thank you. Thank you. Okay, then I think we'll turn now to Mr. Nozzle on behalf of the MGM petitioners again, if it's your intention Mr. Nozzle to stipulate to some or all of the investigatory report. I invite you to do so. Thank you, chair. Good morning. Yes, MGM and MGP stipulate non-material respects to the IEB's investigative report. I don't have much to add beyond what John said, except to be maybe quicker than he was. And to also just stress our thanks to the commission staff and the IEB staff for all their work that went into this starting with then director Skinner now commissioner and the licensing division and as well as Heather and her team for all their efforts of diligence over the last several months. Thank you. I'm going to move on then to Ms. Hall and ask that you make any introductory remarks you'd like to make and then move directly into the IEB's presentation. I actually am going to ask Ms. Hall before you make your introductory remarks. If I could just have five minutes, please. I'd appreciate it. I'm just dealing with a technical issue and I think it can get resolved. I just want to say for the record that we're going to have a judgment free zone on tech issues today because I have to share a chart. So I am, I'm all about a judgment free zone with respect to technology issues. So thank you. Thank you. Just one, if I could just have a couple of minutes, stay tuned everyone, please. Thank you. Hi, Dave. It's Kathy. If you could take down the notice that would be great. Thank you. Thank you everyone for your patience. I know that this has taken longer than certainly the five minutes I had promised to be clear our team took care of my tech issues promptly. But in the meantime, we did have a procedural matter that came to our attention that the commission and legal need to address a second private session on its own. So we will have to keep you. And, you know, I think that the advice for you is to plan on either tuning out, you know, from your, your audio and your, your visual for a few minutes. Because we will return to this public forum. Is that, is that right? Crystal and I saying that correctly will return to this particular link for this forum. Yes, this should stay open given we've created this separate session under me. Okay, great. So again, appreciate your, your patience. Again, this is a procedural matter that we need to address among ourselves, and then we'll return. So again, for the legal team and my fellow commissioners, I'll see you in the virtual room that has been established. Commissioner Brian, are you able to see how it's the invite to view. I think it says now it says commissioner private session crystal is at it. That's correct. That's the newest one. Great. Thank you everyone. Crystal, I didn't get that. Do you want me on that or not. No, I think Karen that we're all set. Okay, thank you so much. Thank you, Dave. I think that can come down once again. Also, okay. Okay, welcome back everyone. Again me. Thank you so much for your patience. It's our matters that we don't deal with very frequently. And so we are working very, very hard to be correct in our, our processes and that was a very helpful session. So Dave, you're all set for streaming. Yep, we are back up and running. Okay. I'm going to take a roll call again, commissioner of Brian. I am here. Commissioner Hill. And commissioner Skinner. I'm here. Okay. Thank you. I'm going to resume our adjudicatory hearing that we commenced at 10 in this public forum and move on to the IEP portion of its presentation. But at this time, I want to turn to commissioner Skinner. Hi, yes. Thank you, chair. And thank you for your patience. Thank you. And to the abundance of caution. I have decided to refuse myself. From this proceeding. And we'll be signing off now. Thank you. Thank you. Thank you, commissioner. We will see you. Hopefully. That opening day. Thank you. So if we return. I am now asking Ms. Holland, you would like to make your introductory remarks and moved into your presentation once more. Thank you so much. Yes, thank you, Chair and commissioners. I don't have too much in the way of an opening except to follow up on what attorneys Alveno and Nozl stated. I just wanna say both of them as well as attorneys Elena Otero-Kiel, Patrick Medama and Mike Fabius for all their cooperation and responsiveness we navigated this process. And I emphasize we because there were a lot of members of the IAB team who worked on this investigation and I just wanna really briefly say a thank you to all of them because I know this is gonna be possibly a complicated discussion and there may be a lot of questions so I wanna make sure I get these recognitions out. So obviously director Loretta Lilios, just wanna thank her for her guidance throughout the process. Chief of Financial Investigations Monica Chang, Sergeant David Collette with the Mass State Police as well as Trooper John Morris, Trooper Tom Roger and financial investigators Paul Eldridge, Susan LaRosa, Dong Fei-Zu, David McKay and Matt Jordan and also IAB paralegal, Brittany Costello. So with that, I'll go right into the IAB's investigation and findings. Over the last approximately two months, the IAB conducted a review of the VCHI retransaction in accordance with the commission's regulations, 205-CMR, 116.10 subsection five. The IAB's findings are set forth in the investigative report that you have marked as exhibit E in this proceeding. And as the commission knows, there are three entities that we're going to be discussing today. We have MGM Resorts International or MGM, MGM both properties LLC or MGP which is a real estate investment trust which we refer to as a REAP and VG properties which is also a REAP. Now, as Attorney Albano noted, we are here because MGP, MGM and VG are seeking interim authorization for the transaction that's described in the IAB's investigative report. Also referred to as the sequel transaction for the VG REAP transaction. In this proposed transaction, VG will acquire MGP and all of its subsidiaries. This includes the acquisition of the real property associated with the MGM Springfield Gaming Establishment. Also referred to as the Springfield Property. With representatives of MGM and VG described this proposed transaction in their presentation to the commission on March 3rd. The IAB has reviewed the transaction and summarized the key aspects of it in its investigative report. And that's in sections one, three and five of the investigative report. Now to get a sense of the proposed sequel transaction, it's helpful to have the backdrop of what the report refers to as the first conduct for which the commission granted interim approval back on October 28th of 2021. In the first transaction, MGP acquired MGM's equity interest in the Springfield Property. And that was part of a series of prior transactions that MGP had also acquired 15 other MGM properties. So with respect to the current structure as it stands today between MGM and MGP, the key points are as follows. MGP through its subsidiaries is the passive owner of the Springfield Property because it's a REIT. MGM Springfield Redevelopment is currently a subsidiary of MGP. MGM Springfield Redevelopment owns and holds the title to the Springfield Property and leases it to MGP Lessoir, the landlord. And I say landlord with a capital L and that's via an intercompany lease. And I say with a capital L because MGP Lessoir and the entity I'm about to note, MGM Lessee have kind of key roles in this and I'll be showing you the chart just shortly here in a minute. So MGP Lessoir then leases the property to MGM Lessee through the MGM MGP Master lease. And MGM Lessee is a subsidiary of MGM. Lutarp importantly is also a subsidiary of MGM. And it's the operator of the MGM Springfield Gaming establishment as well as the holder of the category one gaming license. And just a note that MGP uses the same structure for all of the other gaming properties in its portfolio which are operated by MGM series. And so here is where I'm gonna go and I'm gonna go into hopefully the judgment free zone to show you all this chart and make sure that I'm sharing the appropriate document. Can you all see this? This is chart A and this has been marked as exhibit F. If you could make it slightly larger, it'd be helpful. Chair, does that help at all when I expand it that way so that you can see that right hand corner of the chart? It might be, I can maybe help myself by my view. Okay. Yes. That might help me to do this. That's okay. We're good. Well, what we can do, we can start on the left side and then I'll navigate over to the right side. Thank you. So over here on the left side of the chart. So this is the depiction of the current structure. We have MGM, MGP, which is MGM growth properties up here at the top. And then in this shaded area, this peach area, these are the MGP subsidiaries. And all the way down here, we have the land and premises which is the Springfield property. The Springfield property under the current structure is owned by MGM Springfield redevelopment, LLC and ultimately owned by MGP. Now, Springfield redevelopment leases that property up to MGP lessor via the intercompany lease. MGP lessor then leases the property over through this master lease over to MGM lessy. MGM lessy in turn as the tenant through an operating sub lease leases the property over to BlueTarp. And just wanna note again, on the left side of the chart we have the MGP entities. And then we have on the right side of the chart MGM and their two subsidiaries MGM lessy and BlueTarp. Now in this arrangement, which is the current structure BlueTarp continues to operate the MGM Springfield and it continues to be the holder of the gaming category one gaming license. Now with respect to the proposed structure which I'll show that chart in just one second. VG is going to acquire MGP and its subsidiaries which is all the entities here in the shaded area. It's not going to, we don't have the shaded area for MGP because that as I noted in the report is going to be subsumed into VG upon if the commission grants interim approval for the transaction. So in essence, VG which I noted is also a REIT will become the new passive owner of the Springfield property. In simple terms to quote attorney Pat Medamba as he explained at the March 3rd meeting the MGP entities which are in the peach shading will slide under the VG umbrella. And so that gets us over to chart B which is here. So in chart B, this is a depiction of the proposed structure. Now you have the VG entities up here in the top left and you have the very same MGP entities in the peach shading. Now two of them are going to be renamed but they are all still the same entities and there's going to be the same arrangement that I just described with respect to the current structure. We've got Springfield property down here which is the land of premises. MGM Springfield redevelopment continue to be the ultimate holder of the title and obviously but owned indirectly by VG property link. They will then lease the property to MGP less or then we go across the master lease here which is the amended MGM MGP master lease leases it up to MGM less C over to blue tarp via the operating sub please. Again in this chart as well we have the MGM entities on the right hand side MGM under the proposed sequel transaction continue to be a subsidiary of excuse me MGM less C continue to be a subsidiary of MGM as will blue tarp blue tarp will also continue to be the operator of the game establishment and it will hold the continue to hold the category one gaming license. So that's essentially a depiction of both of the transactions and hopefully as the commission has navigated trying to figure out this these entire arrangement I hope those charts were helpful. We had a lot of good input from our team and also obviously the MGM and beachy. So with respect to how this arrangement works as I noted beachy is a read and via being because it's a read it owns the real estate assets of its properties and leases them back to the tenants via triple net leases. When key features of the triple net lease are that the landlord acts as a passive landlord the landlord the tenant is responsible for expenses such as taxes insurance maintenance and costs as well as capital expenditures. So with respect to the proposed beachy transaction and we had talked about the master lease when we looked at the charts the key provisions of the amended master lease are as follows. So the lease term will be 25 years to 2047. There will be three 10 year renewal options at the tenants, which is MGM option and the tenant being MGM lessy again a subsidiary of MGM. The annual rent across the board will be $860 million and the capital expenditures will continue to be 1% of the net revenue and that's in the aggregate across all of the MGM properties. Now under the lease blue tarp will continue to have the right to make capital improvements and they may do that without consent of beachy as long as certain conditions are present such as not removing any material existing structure to the alteration it can't pose any material adverse effect on the structural integrity and it may not be reasonably likely to reduce the value of the facility and it also has to be consistent with the facility's intended use. And just to point out something that attorney Laura Norton noted at the previous hearing on the MGM MGP re-transaction even in circumstances where the landlord's approval is required beachy could not unreasonably withhold that approval. So in addition under the master lease blue tarp as the operator will be responsible for maintenance insurance and taxes and other expenses. And as I noted blue tarp will continue to operate and control the MGM Springfield game the establishment and continue to be the category one licensee. So as noted in the IDD report there are two stages to this approval process interim authorization and final approval. We are here today as we've discussed at the interim authorization stage. And one of the first steps in this investigation was the scoping of the transaction. And as noted in the report the IEV identified 10 entity qualifiers four of which were beachy entities and five of which were empty. And there were four individual qualifiers. The individual qualifiers were Mr. Edward Petoniana who's the CEO and director of beachy Mr. John Payne the president and chief operating officer of beachy Ms. Samantha Gallagher who's the executive vice president general counsel of beachy and secretary. And then we also designated Mr. Carl Sotisanti who is the successor trustee. And as I noted above I just wanted to again highlight that all of the entities and individuals and their representatives cooperated with the IEB's investigation and they were very responsive to the IEB's request. And I also noted that beachy and its subsidiaries are qualifiers in the transaction. And we have financial investigator Paul Eldridge here to provide an overview of beachy itself and the financial investigation that was performed on beachy. We also have Sergeant Dave Collette here to summarize the other components of the investigation as well as discuss any questions the commission may have with respect to the investigation regarding Mr. Sotisanti's suitability as the trustee. And with that I'm gonna actually turn it over to Paul Eldridge. Thank you, Heather. Good morning, Madam Chair and commissioners. The IEB conducted an interim financial investigation of beachy and its subsidiaries. As part of our evaluation we reviewed financial statements, tax returns and credit reports for each entity when available. The audit firm of Deloitte and Touche LLP issued unqualified audit opinions for all years reviewed which stated that the financial statements were presented fairly in conformity with generally accepted accounting principles. The accounting firm of KPMG LLP prepared the tax returns for all years reviewed. The tax returns reviewed we noted that there were no total tax amounts shown which is reasonable because the re-distributed its income to shareholders in the form of dividends. Finally, we reviewed recent credit reports and no issues were identified. I would like to point out that there is one typo in exhibiting which is the IEB investigative report on the top of page 20, if you wanna flip there. It reads that approximately 300,000 shares of common stock were issued to Cesar's operating company. The number of shares should be 300 million that's 300 million shares. These shares passed through Cesar's operating company during formation, but at no other point did Cesar's or its affiliates own any interest in Vichi. In summary, the interim financial review did not reveal any issues or concerns with Vichi's financial stability, integrity and background. Our evaluation focused on the acquisition of MGM growth properties by Vichi. The proposed transaction will transfer ownership of the MGM Springfield property to Vichi but MGM will continue to be the property's operator through the Massachusetts category one gaming licensee, blue top redevelopment LLC. The mass lease will continue to be between MGM and MGP but Vichi will now be the owner of MGP. Subsequent to the transaction, the MGM Springfield property will continue to be included in the existing mass lease, which will be amended and restated. This transaction will simplify MGM's corporate structure and is the culmination of MGM's asset light strategy. As a result of this transaction, MGM expects to be well positioned to continue to pursue growth opportunities in its core business with significant financial flexibility to continue to deploy as capital to maximize shareholder value. Through this transaction, Vichi will advance its goals of portfolio enhancement and diversification. This transaction will increase the annual rental revenues of Vichi. The amended and restated mass lease will have an initial annual rent of $860 million which translates into a fixed stream of income for Vichi. Vichi's financial results have improved since its inception in 2017 as more properties were added to its portfolio each year. Net revenue increased over 553% from year 2017 to year 2020 and that income increased over 1,912% during the same time period. Most recently, as reflected in Vichi's 2021 Form 10K annual report, the company's net income increased by 14.2% since the previous year to over $1 billion. That concludes my prepared remarks. Thank you. Thanks, Paul. So with that, I'm going to turn it over to Sergeant Dave Collette to talk about the other aspects of the investigation. Good afternoon, Chair, commissioners. Good afternoon to representatives from Vichi Properties and MGM. Sergeant David Collette of the Massachusetts State Police assigned here to the Mass Gaming Commission's Investigations and Enforcement Bureau. Assisting me in our portion of this investigation is Trooper John Morris and Trooper Tom Roger. After an in-depth review of all applications and submissions from Vichi Properties and MGM, a thorough background investigation was conducted regarding the five Vichi Property Entities, three Vichi Property Individual Qualifiers, the MGM Entity and the trustee of this transaction, Mr. Carlos Sotosanti. As part of this investigation, routine communications were conducted with the applicants, which required the submission of additional information and supplemental documents. All communications with the applicants were courteous and professional and information requested was provided in a timely manner. The process by which this investigation was conducted involved extensive research and discovery of any additional information, which could be learned about the applicant, associated entities and individuals from as many sources as investigators deemed necessary. Some of these sources involve databases that are either available to the public or are law enforcement sensitive. After the completion of this research, investigators combined the results into a specific checklist for each entity and individual involved in the investigation and a full report was prepared separately for the trustee. Included in these checklists are queries conducted for any criminal history at the federal, state, local and even international level. Individual applicants are required to submit their fingerprints as part of their application package, which are run through a criminal records database. It should be noted that no such criminal history was discovered for any of the qualifying individuals. Civil litigation databases were queried and reviewed regarding any lawsuits filed against the applicant, entities or individuals. Particular attention is paid to any suits that contain any accusations of derogatory or fraudulent business practices. And in regard to this investigation, no litigation disclosed or discovered revealed any such accusations or judgments. Secretary of State and SEC databases were queried regarding any filings reported by the applicant or qualifying entities. Any results obtained were reviewed for any derogatory information relating to the applicant or entities involved in this transaction and no such derogatory information was discovered. Open source and media outlet checks were conducted and reviewed, including any social media. A vast majority of the responses involved the ongoing business transactions, financial information, and specifically this transaction involving the acquisition of MGM growth properties by VG properties incorporated. All content was reviewed and revealed no derogatory information regarding any of the involved entities or individuals. Also, as part of these investigations, other jurisdictions in which the applicants are already conducting gaming-related businesses were contacted. All responses received from other jurisdictions revealed no derogatory or disqualifying information in regards to their existing licensure or suitability. After a thorough review of the results of all aspects of the MSP portion of this investigation conducted into the applicant, associated entities, individuals, and trustee of this transaction, no significant issues or concerns were identified. Thank you. Thank you, Sergeant Collette. Chair, at this point, I just wanted to note that if there are any questions on the investigation with respect to Mr. Soto-Santi, Sergeant Collette will be available to field those ad school live commissioners or you have any questions. Or we could perhaps wait until we close out the IEV section and address that piece separately, depending on however you all feel appropriate. Mr. Soto-Santi, do you have questions that you could ask at this juncture or either Mr. Aldridge or Sergeant Collette? Not at this time. Okay, thank you. I'm all set. We're all set. Heather, thank you so much. Thank you, Chair. So with respect to the ultimate findings in the investigation under the governing regulation, as we've noted, which is 205 CMR 116.10 subsection five, the IEV will address each of its findings with respect to those criteria as we have done in pages 25 to 28 of the investigative report. With respect to the first criteria that requires that all the qualifiers have submitted application forms as required, those applications were submitted and deemed complete by the licensing division on January 31st of this year. And the investigators conducted a review of those applications and the forms and confirmed their completeness. Now, with respect to the second and third criteria, which pertain to the trust and the trustee, we do have a fully executed Springfield amended nominee trust and that has been submitted to the commission. It's an exhibit in this proceeding, which is exhibit C. And in a public meeting on March 3rd, the commission approved the terms of the trust. And under the terms of that trust, in the event that a suitability issue arises following interim authorization by the commission, but before final approval, the commission may order the Springfield property be transferred into the trust. And in the event that the commission ultimately issues a negative determination on suitability, the trust calls for the Springfield property to be returned to Plutarch. So with respect to the third criteria regarding the trustee, the IEV investigated Mr. Sotosanti's suitability under the criteria set for the 205 CMR 134 because he is considered in this matter to be a key gaming employee executive. And as noted in both the reports, the IEV investigated report as well as the attached report regarding Mr. Sotosanti. Commission previously has determined him to be suitable in both 2014 and again in 2019 in connection with his prior positions with Penn National. Given that he has since retired from those positions, investigators here in this interim authorization examined Mr. Sotosanti's suitability anew. The IEV submits that based on its investigation, Mr. Sotosanti is established by clear and convincing evidence that he remains suitable under the criteria set forth in the Massachusetts gaming law regulations. And as such, we do recommend that the commission issue of positive determination of suitability for Mr. Sotosanti in his role as trustee of the limited trust. And the fourth criteria is that the, with respect to the IEV finding no preliminary evidence of anything that would serve to disqualify any of the entity or individual qualifiers under the criteria set forth in 23K sections 12 or 16. And the IEV also did not find any other known reason why a positive determination of suitability may not ultimately be achieved. So with respect to the fifth criteria, the IEV's initial investigation further indicated that the proposed IEG retransaction will not result in IEG having a financial interest in more than one gaming license in the common hall. In addition, we also determined that it is not going to result in a transfer of the actual IEV license because as I noted before, that is going to stay with Plutarch. So with respect to the qualifiers, both the individual and representatives of the entities have all certified that they are unaware of any reason why they could not be found qualified and that satisfies the IEV found that satisfied the sixth criteria. As for the seventh criteria, that requires the commission to find that it is in the best interest of the common wall for the gaming establishment to continue to operate pursuant to internal authorization. Nothing was revealed in the investigation to suggest that allowing MDM Springfield to continue would not be in the best interest of the common hall. So we note that with respect to that criteria and similar to the conclusion in the previous re-transaction, uninterrupted operation of MDM Springfield would ensure that tax revenues continue to come from the gaming establishment and that employment opportunities are available to Massachusetts residents. And finally, with respect to the initial investigation, the final criteria, it does indicate that the proposed BT transaction will not result in a change of control of the MDM Springfield gaming establishment. In my contrast, BT will be a passive landlord. And again, UTAR will continue to be in control of the operations at MDM Springfield. So with that, I'm happy to answer any questions that the Chair or commissioners might have. Questions for Councilor Howe. Howe, Heather, very clear report. Thank you. Thank you, Chair. Thank you too, Mr. Aldridge and Sergeant Collette too for your work and also to Mr. Jordan and Ms. Chang for their work and your teams in their entirety. It's a comprehensive effort and you've been thanked by the other parties and we appreciate your professionalism. Okay, so hold on, I've got to go back to my guidance from Mr. Grossman. Okay, now I guess that this, now you have the opportunity petitioner to ask any questions that you may have from Ms. Howe or other members of the IEB relative to their presentation or any clarifiers, Mr. Albano or Mr. Nozzle. Mr. Albano, if you could stay. No questions from Veechee. Thank you and Mr. Nozzle, are you all set? Thank you, Chair, no questions. Thank you. I'm of course a little bit at a disadvantage of reading faces when I'm looking at my notes, okay? And we'll now turn to the presentation by Veechee. Mr. Albano, if you'd like to proceed, please. Yes, thank you. Thank you. If I may, I'd like to call John Aime, the president and CEO of Veechee. Good afternoon, good morning, Madam Chair and commissioners, I will be brief. I wanted to first thank you for your consideration and for having us here today. I thought I would literally take one or two minutes just to add on to the great report the IEB did about our company. Veechee started in October of 2017. I was blessed to be one of the first of the two employees to start the company at that time. Obviously, you've learned through the report that we are a triple net REIT and a passive landlord who's some wonderful operators. Just to give you an idea of the magnitude of our company after this acquisition, we'll own 43 properties in 15 states. We'll have about 58,000 hotel rooms, three of the top five largest hotels in the United States will be inside our portfolio, 700 restaurants will be run by our operators. But it's a wonderful quality portfolio with big magnitude in the United States. As you've heard in the IEB report, we are a passive landlord, we're a triple net REIT. We have become the second largest triple net REIT in the United States in four and a half years because we've been involved in about $29 billion of transactions. That's a quick way of saying we've been busy and we've been very fortunate that during the pandemic, our tenants, because they have been very strong and great operators, we've received 100% of our rent. I'll end by saying, hopefully over the coming years, you'll get to know us that we have, I have great pride in our company. We've been around, like I said, for four and a half years in our first four years, we were voted the best places to work by our employees and something we are incredibly thankful for. And our secret sauce, which you've met a few of my colleagues, Elena and Samantha, who are on this call, our secret sauce is our people. Our people do a wonderful job. We are a real estate company. We are REIT, but the reason why we have been successful in our short period of time is because of these great executives that we have. So I appreciate your time and we appreciate your consideration. Thank you. Thank you, Mr. Payne. And thank you again for your patience today as we navigated a few procedural matters. Questions, commissioners, for Mr. Payne? Well, other than a great congratulations having navigated the pandemic so well, we thank you for your team's cooperation throughout this process. I know Massachusetts probably is quite different from other jurisdictions. So we appreciate your tentative attention to all of the details that are required as we make our way through today's proceeding. Okay. Thank you. Thank you. Mr. Alvarez? Yes, Madam Chair. Our next witness is Elena Kyle, who I have just a few questions for. And then of course, she's available to answer any questions that. Thank you so much, Council. For the introduction, my name is Elena Kyle. I'm Associate General Counsel here at VEACHE and I've served in that role for the duration of the investigation. Like Mr. Payne, I want to take the opportunity on behalf of myself and all of our VEACHE team members to thank the commission for their attention to our matter to express our gratefulness at being having the opportunity to present today and to also thank the staff for their engagement, thoroughness and precision with which, excuse me, reviewed our material. Thank you for the opportunity. Thanks, Ms. Kyle. So I'm gonna ask you two questions at once, which lawyers aren't supposed to do, but I think they won't. The commission is somewhat familiar with what a reed is. They've dealt with them before, but I thought it might be helpful to hear from you. Brief description of the nature of a reed and then the key features of the lease here. Would you do that for us? Yes, as I think the commission may be aware and as the IEB's report laid out, a reed is a type of corporate entity that makes a specific election with the IRS, resulting in for all practical purposes, becoming generally exempt from US federal income tax, as long as all taxable income is distributed to shareholders. The distributions are taxed at an individual investor level as an option. Typically reeds own income producing real estate and receive beneficial tax treatment in exchange for abiding by certain restrictions and requirements. Most applicable here, I think for the attention of the commission and the investigative division, limitations on our operations. That does lead me to the description of the lease. The lease is a triple net lease in nature, meaning that the tenants are responsible for all operations and payment of all expenses associated with the properties, including real estate taxes, building insurance and maintenance. And that's consistent across all triple net leases and consistent with the MGM-MGP lease prior to its proposed amendment and restatement in connection with this transaction. One item that I'd like to highlight for the commission's attention is the capital expenditure requirements. And I know that a number of persons have made this point that allow me to make it briefly. We've made no changes to the existing capital expenditure requirements that the commission is familiar with in the existing lease. And we have no right to consent or give notice for any capital expenditures made by the tenant, other than in the very limited circumstances set forth in the IEB's report. And then even in such case, such consent may not be unreasonably withheld or denied. Thanks, let's move ahead to one other topic. Have you personally reviewed the IEB report? Yes, I have personally reviewed the IEB's report. And if you agree with its conclusions in all material respects having read it. I do. Do you know of any evidence that would disqualify Vici from licensure or any reason why a positive determination won't ultimately be achieved here? I do not know of any evidence or any such reason. And if this transaction moves forward, will Vici have a financial interest in any other gaming license or gaming establish here in the Commonwealth? No. And if the transaction is approved and concentrated, will it result in a change in control, the licensee? No. Last question, Ms. Kyle. Did Vici submit any applications for any entity or individual qualifier that later was withdrawn after the IEB raised a suitability issue? Did that happen here? No, it did not. That's all the questions I have for you, Ms. Namjoo. Thank you. Thank you. So you're all set, Mr. Alvano. Okay. And we wish to thank Ms. Gallagher too for being here today. Thank you. Do you have questions for Ms. Kyle? Commissioner O'Brien? No, I'm all set. Thank you. Commissioner Hill? I'm all set as well. Thank you. No, Mr. Alvano, you asked the key questions. Of course, at front of mind for all of us are the capital expenditure obligation core to the intent of 23K. So thank you for addressing that. And the other questions were very helpful for me. So thank you. Then I turn to again, my guidance. I guess now for Councilor Hill, do you have any questions or clarifiers that you'd ask of Vici? And Heather, if you could give a oral answer. Oh, I apologize. I thought you... Hi, you know what it is? I'm reading a little bit. So my screen is down right now. So I am sorry. I've heard you to say Hill and I was thinking you were asking... Oh, I said Hill instead of Hall. Did I call you... Did I say, I guess I meant to say Councilor Hall. That could be me not being very articulate. My apologies. It could also be my hearing issues. So no, I don't. But thank you, Chair. Heather, that was not your hearing. Oh, it wasn't. Thank you. I'm just gonna decide that that might mean I needed another sip of coffee. Councilor Hall, thank you. It's not the first time I've done that, I don't think. It's okay. Are you all set? We are, thank you. Okay, thank you so much. Now we're gonna turn to MGM, the petitioners. Mr. Nozzle, if you'd like to proceed. Thank you so much. Thank you, Chair. Thanks, members of the commission. I have just a few limited questions for Mr. Madamba and we'll be brief. So Mr. Madamba, as a result of this transaction, will there be any change in control of BlueTarp redevelopment gaming license? There will not. And Mr. Madamba, as the owner of the licensee, can you state why it's in the best interest of the Commonwealth for MGM Springfield to continue to operate pursuant to interim authorization? Sure. For many reasons, the state and the city will continue to receive directs, tax and other financial payments without interruption. MGM Springfield's employees will continue to be employed without interruption. The vendors, including local minority women-owned vendors, for example, will continue to have the opportunity to provide goods and services to MGM Springfield without interruption. And Massachusetts and in particular, Western Massachusetts will continue to receive without interruption the spin-off economic benefits from MGM's approximate $1 billion investment in MGM Springfield. Thank you, Mr. Madamba. Chair, I don't have anything else at this time. Thank you, Mr. Nozl. Questions for MGM? I guess it's just, okay, you're both shaking your head now. All right, and I'm all set too. Mr. Nozl, I'm having a hard time finding Pat on my screen. You just shifted. There you are. You shifted. Thank you so much, Mr. Madamba. Yes, that absolutely helps to have some motion. Navigating the screens is a little bit different than navigating in real life. So thank you. You all know that after two plus years now. All right, then in terms of next steps, I wanna make sure again to give Councilor Hall, do you have any questions for Mr. Nozl or Mr. Madamba? I do not chair. Thank you. Okay, thank you so much. All right. So now that we've heard all of the evidence in this matter before we move to closing remarks, I would like to turn back to my fellow commissioners, once again to make sure there are no further sensitive or confidential issues that you would like to explore that would benefit from closing this proceeding to the public under our regulations. This is an opportunity to ask any questions particular that might be relevant to the confidential materials that are shielded by law. Commissioner O'Brien, do you have any questions on the exact exhibit with the, they don't have it in front of me, Todd, the letter. I think it's H. I've gone through them again. Madam Chair, I don't have any questions that I think would require me to ask them in the private agenda or setting. Okay, and Commissioner Hill. I don't either, thank you. Right, and I feel the same way the, IEB did a superb job. Thank you again to Sergeant Collette and Mr. Eldridge and teams. Making my way through our process, I think nearing the end, apologies. So I guess at this point, we would turn to closing remarks. Each of the parties would be afforded an opportunity to make a statement that sums up your position, although you don't need to. Mr. O'Brien, would you like to proceed with remarks and then you'd be followed by Mr. Nielsen and Ms. Hall. Thank you, I'll be quite brief. We believe we've met all of the requirements of the regulations and I would just like to point out two things. One, the evidence certainly shows that there's no change in control that would come about as a result of this transaction. The last thing I'd say is I think it's not an accident that these types of transactions with REITs are happening not just in Massachusetts, but throughout the country. It's good for the industry and I would submit that in this case, it's also as for the reasons Mr. McDonough explained, it's good for the Commonwealth, for the operators to have the benefits of these types of transactions. And so we ask respectfully that the interim authorization be current. Thank you, Mr. Nielsen. Thank you, Chairs. I benefited throughout this proceeding of going after Attorney Hall and Attorney Albino, Albino in connection with making any remarks. So I too will be brief and agree with their positions. Yeah, we do benefit from a really thorough report, which I think on its own presents substantial evidence for this commission to grant interim authorization. In addition to the witnesses that you've heard today, we believe we've met the standards for 205-CMR 116-10 and we'd respectfully request the commission's approval for interim authorization. Thank you and Ms. Hall. I don't have too much to say except to say thank you again. And that's essentially, I appreciate all the work of the IDB and all the core communication and cooperation of the parties in this matter. Thank you. So... I'm sorry, I really would like to thank is our attorney did, but I'd like you here from MGM as well personally. We will thank you sincerely, both you, your staff, the IDB, Heather and her team, they've done a remarkable job and we really do appreciate how this transaction has moved along in Massachusetts. It's greatly appreciated. So thank you again, as always. Thank you. And I appreciate it too, your testimony today, Mr. Modamba. So thank you. Okay. And is there anyone else who wishes to speak? All right, so the conclusion of the closing statements have been done. And now thank you. I think that I indicated that we would like to be able to deliberate in private. But before we go on, it has been a disrupted day and I want to again thank everyone and extend my heartfelt appreciation for your patience. We're going to end this virtual meeting and enter again into another virtual room for our private deliberations. But before I leave this meeting, I do want to give the opportunity for anyone else to raise anything further. And that includes of course my two fellow commissioners, Commissioner Hill, Commissioner O'Brien. Do you have anything else that you would like to address or ask? I'm all set. Thank you, Madam Chair. I am reiterating what has been unanimously expressed by all the parties involved, which is just thanking both the applicants and our staff in terms of how efficiently the process has moved and how prepared we've been able to be for these hearings. Yes, we understood that IEB was working hard on this and what's very gratifying is to see how much that hard work and timeliness is appreciated. So thank you to all. And we thank you for your thoroughness and again for your work today to all the parties. It's been very helpful. And I guess we've got some work to do now. So thank you. We're gonna leave this meeting and we'll go to the next virtual room. And we are so eager to start doing this more and more in person. So thank you. Thank you very much. Thank you. Have a great day everyone. It's a pretty one here in Massachusetts. Thank you. Thanks, Chair. Thank you. Nice to see you all.