SPRINGFIELD, Mass. (AP) — Springfield Mayor Domenic Sarno on Tuesday chose MGM Resorts International as the preferred developer for a resort casino in the state’s third-largest city, selecting it over a competing proposal from Penn National Gaming.

“Quite simply, we’re ecstatic,” MGM Resorts President Bill Hornbuckle said in a call with reporters. “We think we have done this probably better than we have done any other development campaign in our company’s history.”

MGM is seeking to build an $800 million resort casino on 14.5 acres of land in the city’s South End that sustained extensive damage in a June 2011 tornado.

Sarno announced that he had negotiated a host community agreement with MGM that would include annual payments to the city projected at more than $25 million a year, if the casino is built. The agreement must be approved by the Springfield City Council and by city voters. Springfield officials said they are aiming to hold a referendum on July 16.

The state’s 2011 gambling law allows for up to three regional resort casinos, including one in western Massachusetts. Hard Rock International has proposed a casino in West Springfield and Mohegan Sun has a plan for the town of Palmer. The state’s gambling commission will chose one of the three projects, likely in early 2014.

The Springfield proposal offered by Penn National Gaming — in partnership with Peter Pan Bus Lines chairman Peter Picknelly — called for a casino and hotel project on a 13.4-acre parcel in the North End that is now home to a newspaper and a bus terminal.

The company submitted a preliminary application to the Massachusetts Gaming Commission along with a $400,000 non-refundable fee.

In a statement, Penn National spokesman Eric Schippers said the company was disappointed in the decision but wished MGM and Springfield the best.

“As a company well known for its disciplined approach to new development opportunities, we put forth the very best package we felt we could justify from a shareholder return perspective,” Schippers said.

Sarno said he never seriously considered negotiating host community agreements with both MGM and Penn National, though that was an option.

“We need to move forward together as one,” he said.

Hornbuckle said MGM has spent $10 million to date on its project, including the campaign to win city approval, which included heavy public outreach and sponsorship of community events including a pancake breakfast and fireworks.

“We did it on a grassroots level and we ultimately think we won the day because the people of Springfield understood our story, and ultimately our project, and it was translated to the mayor,” Hornbuckle said.

If it’s chosen as the region’s casino developer, MGM estimates about $450 million in annual gaming revenues and 3,000 jobs from its project. Hornbuckle estimates the casino would open by summer 2016.

Of the three remaining proposals in western Massachusetts, MGM’s is the only one planned for the middle of a city.

Hornbuckle said that location puts it in prime position to deliver the economic development and jobs that lawmakers were aiming for in the casino bill. He also said the history of urban casinos, including the company’s casino in downtown Detroit, show that they “add and enhance” the area.

“And public safety, while a focus and a concern not to be taken lightly, has never been a significant issue, and we don’t see it as one in Springfield, either,” he said.

The host community agreement also calls for MGM to make several other payments to Springfield, including a $1 million grant to improve Riverfront Park and a $150,000 grant to build a pavilion at the Franconia Golf Course.