Mohegan Sun Concord partners say they're on track
Buoyed by favorable correspondence from a top New York gaming regulator, partners in the plan to develop the Mohegan Sun Concord in the Catskills have been saying they expect to break ground on the $600 million racetrack/casino project in the next couple of months.
But don't bet on it, warn the owners of a Monticello "racino" located less than three miles away from the Concord site in Thompson.
In fighting the Concord project, "We will relentlessly pursue all legal options available to us," Emanuel Pearlman, chairman of the board of Empire Resorts, owner of Monticello Casino & Raceway, said Tuesday in response to questions emailed by The Day.
Pearlman took a dim view of the correspondence in question, a May 25 letter to Concord developer Louis Cappelli from John Sabini, chairman of the New York State Racing and Wagering Board, in which Sabini indicates the board is prepared to act favorably on Cappelli's application for a harness-racing license, an approval considered crucial to the Concord project.
First, however, the Concord partners, including the Mohegan Tribal Gaming Authority, have to build the racing facilities.
As Sabini says in his letter, if the developers substantially complete the facility "in accordance with plans and specifications approved by the board … it is anticipated that the Board will be in a position to grant priority to, and take favorable action upon, the 2011 license application."
In an interview Tuesday, Mitchell Etess, the MTGA's chief executive officer, stopped just short of characterizing Sabini's missive as a guarantee.
"What Sabini's letter says is that as long as it is built, we will get the license," Etess said. "You're not going to spend 600 million dollars on something if you're not going to get a license for it. … It's certainly enough for us to pursue the financing."
Etess said the partners expect to secure financing by the middle of the month, begin construction by the end of June or early July and open in March 2013. Cappelli's Concord Associates is lining up the financing, according to Etess, who has said the MTGA is "a small, minority equity partner" in the project. The MTGA's newly formed Mohegan Gaming Associates would manage the facility.
The Mohegan Sun Concord, which would be built on the site of the former Concord Hotel, a famed Catskills resort that closed in 1998 and which Cappelli bought and razed, would include a 75,000-square foot casino featuring 2,100 video lottery terminals and room for up to 450 electronic table games, a 258-room hotel, a harness racing track with a grandstand, restaurants, retail outlets and entertainment space.
The Concord would have to obtain a separate license from the New York Lottery to operate the video lottery terminals.
According to Sabini's letter, to which The Day gained access by filing a freedom-of-information request, New York law authorizes the issuing of eight harness-racing licenses per year. Seven of the licenses have been granted for 2011, and the Concord application is the only other one the board has received.
"Concord has informed the Board that it is in the process of soliciting equity partners and intends to incur indebtedness in the third quarter of 2011 of approximately $380 million for the development and construction of the racing facility and related facilities," Sabini writes, addressing Cappelli. "… The Board recognizes that you have expressed interest in a license since 2008 and have taken various affirmative steps to reiterate that interest and pursue the project."
Sabini also writes that state law prohibits racing on the same dates at tracks located within 25 miles of each other. As a result, he says in the letter, "Concord Downs can only be licensed to race on different race dates than the Monticello Race Track."
Pearlman, in his emailed response, said Sabini's letter "advances the interests of a developer, Louis Cappelli, not of New York State or of the harness racing industry. Issuing the eighth license for a track in Monticello Raceway's backyard is contrary to NY law and public policy."
Pearlman went on to write that "Empire Resorts has no intention of consenting to Concord's development" and that "sparsely populated Sullivan County cannot support two racetrack casinos."
Empire and Cappelli were partners in an earlier plan to develop the Concord property, but withdrew last summer when Cappelli could not secure the necessary financing. Empire has since sought to expand its Monticello facility and has explored developing a portion of the former Concord resort that Cappelli was forced to relinquish.
Pearlman wrote that Empire has placed its expansion plans on hold while it negotiates the joint development with the Concord property's owner, Entertainment Properties Trust.
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