Developers Bet On the Catskills State Board Opens Licensing Process for Four Casinos By Joseph De Avila The dream of gambling in the Catskills is set to take a big step forward Monday when a state board opens the licensing process for four upstate casinos. Nearly a dozen groups have expressed interest is developing a casino in the states historic Borscht Belt since November when voters approved a referendum championed by Gov. Andrew Cuomo. While the measure was targeted at struggling upstate communities, it is widely expected that the Catskills will get one or two of the four licenses first made available. The board appointed by the State Gaming Commission plans to begin soliciting bids Monday. Bids are due by June, winners will be announced in the fall and developers will have two years from being picked to open their doors. Stakes for playing in this game are high: Developers need to pay $1 million just to apply. That process will weed some people out, predicts Michael Treanor, chief executive of a group that hopes to build a $470 million casino, hotel and golf course at the site of the old Nevele hotel in Ellenville, N.Y. The lure of casino development in the Catskills has for decades piqued the interest of developers aware of the benefit of being so close to New York City. Elected officials in the region also have been big promoters of gambling development to make up for the lost economic activity when the era of the big Catskills resorts faded. Other likely bidders with sites in the Catskills include Empire Resorts Inc. NYNY +0.93% ; New Yorks Muss family; the Flaum family, also of New York; Connecticut-based developer Len Wolman, and Louis Cappelli, who has been hoping for years to develop a casino on part of the grounds of the old Concord Resort Hotel. The Catskill region is emotionally connected to the people of New York, said David Brain, chief executive of EPR Properties, a real-estate investment trust that has formed a partnership with Empire Resorts Inc. on a plan for a $600 million casino, hotel and water park. People would like to see that reinvigorated. Past efforts to develop gambling in the state have run into trouble. Over the years, property owners and Indian tribes fought numerous battles over efforts to bring casinos to the Catskills that have so far proved futile. A state inspector general report in 2010 found that state Senate leaders manipulated the selection process of who would operate a video lottery racino at Aqueduct Racetrack in Queens. The state eventually selected a subsidiary of Malaysia-based Genting Group to operate the facility. To ensure that this process is fair, a special board was set up by the State Gaming Commission to review applications. Two spots on the board still need to be filled; current members include Hofstra University President Stuart Rabinowitz, Cedar Street Group founder Paul Francis and former New York City mayoral candidate William Thompson, Jr. Integrity is paramount, said Mark Gearan, the chairman of the State Gaming Commission, said when the board members were announced in February. Two important details will be released Monday by the state board: the minimum amount of money winning applicants must invest in their projects and the cost of the licensing fee. Many groups expect the licensing fee to be in the $50 million range. The board will base 70% of its determination on how much economic activity a project will generate, 20% on its local impact and 10% on its workforce development plan. Potential bidders are in varying stages of lining up financing for their plans. Mr. Treanor said he has settled on terms for debt and equity financing but hasnt reached a final agreement with investors and lenders. Jeffrey Kay, chief operating officer of Muss Development, said the company is 100% confident that by the time we submit the [application] we can announce financing. Muss is working with the Mashantucket Pequots, operators of the Foxwoods Resort Casino in Connecticut, to build a 350-room hotel, casino, golf course on an 850-acre site near the old Grossingers Hotel in Liberty, N.Y. Mr. Wolman, who led the development of Mohegan Sun in Connecticut, has teamed up with the Stockbridge-Munsee Indians, who attempted to build an Indian casino in Thompson, N.Y. in Sullivan County for more than a decade. They are now attempting to open a $350 million commercial casino project on their 330-acre site near the Neversink River, according to a person familiar with the matter. Meanwhile, the Flaum family recently acquired a site in Harriman, N.Y., in Orange County located about 50 miles from New York City. Asher Flaum plans to market his site as having the best potential as a tourist draw, he said, since it is adjacent to the popular Woodbury Commons shopping outlets and close to Manhattan and a nearby Metro-North train station. There will be a limit of two casinos per region. Most groups expect the Catskills to get two because more visitors might be attracted to the region if they have a choice. —Mike Vilensky contributed to this article. Write to Joseph De Avila at joseph.deavila@wsj online.wsj/news/articles/SB10001424052702304886904579471431359096094?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj%2Farticle%2FSB10001424052702304886904579471431359096094.html EPR Properties and Empire Resorts want to build a $600 million hotel, casino and water park in the region that would look like this rendering. JCJ Architecture
Posted on: Mon, 31 Mar 2014 15:35:21 +0000
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