SOS In The News

Investors forging big plans for Steel

Friday, December 17, 2004

By GREGG W. BORTZ The Express-Times

BETHLEHEM -- Plans for the 120-acre heart of the former Bethlehem Steel plant could be made public within a month, according to the developers.

Investment group BethWorks Now recently struck a deal with Las Vegas Sands Inc., which owns the Venetian casinos, to bring a slots parlor and help develop the industrial relic into a tourist destination.

Mike Perrucci of BethWorks Now said the Venetian would build a casino east of the Minsi Trails Bridge, and would be an equal partner in non-casino development.

"We think this project will be $700 million to a $1 billion full build-out," Perrucci said, anticipating the creation of at least 2,800 local jobs.

"We've got the Rolls-Royce of the gaming industry willing to take a chance on Bethlehem," Perrucci said. "We anticipate having a full-blown preliminary design of site in 30 days. We're moving at light speed."

Las Vegas Sands Inc. began trading publicly on the New York Stock Exchange Wednesday.

Company holdings include The Venetian Resort Hotel on the Las Vegas Strip and Venetian Macao Limited, a developer of multiple hotel resort properties in The People's Republic of China's Special Administrative Region of Macao.

"The Venetian will be operating in London, China, Las Vegas and Bethlehem," Perrucci said.

Having just held an initial public offering, the casino company is in a mandated "quiet period" and can't comment on deals.

The casino company would provide $2.25 million for initial costs, and invest another $2 million if BethWorks Now gets a coveted state gaming license when the licenses are awarded.

The state likely will grant licenses in late 2005 or early 2006.

The Pennsylvania Gaming Control Board met Tuesday and Wednesday, the first board meetings since the Legislature approved up to 61,000 slot machines at 14 venues including race tracks, resorts and stand-alone venues.

"If we're fortunate enough to get a license, we can build in five years," Perrucci said.

But plans for the Bethlehem Works site, which Perrucci and his New York-based partners bought for $4 million in September, are still going "full-bore."

"We're probably spending $1 million for design," Perrucci said.

In addition to a slots parlor, the Venetian brings "major contacts" in the retail industry, and Perrucci envisions upscale stores like Urban Outfitters to open there.

BethWorks Now plans to develop a "lifestyle center" mall at Bethlehem Works, integrating old and new buildings.

Perrucci said his firm wants to give local merchants "first shot" at opening shops in the complex.

Perrucci said the developers also plan one or two hotels, 700 to 1,000 loft-style residences, commercial office space and an arena. That is in addition to an entertainment complex including cinemas and "cool bowling alleys," Perrucci said.

Perrucci added that ArtsQuest, the nonprofit parent organization of Musikfest, and the National Museum of Industrial History are "partners" in the development.

ArtsQuest President Jeff Parks has long envisioned an arts park at the Steel site. He's coordinated with WLVT-TV Lehigh Valley PBS and several arts organizations about locating there.

Parks on Thursday said his collaboration includes about a dozen local arts and cultural institutions hoping to develop part of the Bethlehem Works complex. But he pointed out everything is still in preliminary stages.

"We need to have all of our organizations on the same page," Parks said.

Mayor John Callahan said the BethWorks Now team has been "creative" in its plans for adaptive re-use of the site.

Callahan has met several times with the developers and likes what he sees, especially plans to preserve several historic Steel buildings.

Callahan said he's seen a rendering of the proposed slots parlor, which would incorporate a retro-industrial look.

The developers retained several worldwide architecture firms, and hired Judith Saltzman, a New York architect and preservationist who led the restoration of 42nd Street.

"We're working very hard and we anticipate preserving a number of the buildings on the (Steel) site," Perrucci said.

Buildings slated to stay include the landmark blast furnaces, the Machine Shop No. 2 building, the former Steel General Offices on Third Street, the iron foundry and a number of other buildings.

"We believe the architecture will drive this site as a destination for the entire East Coast," Perrucci said.

Another plan is to keep in place a still-operational Steel elevated railroad and use it as a "people-mover" through the site.

"We intend to build a city within a city," Perrucci said.

Perrucci acknowledged the slots parlor is central to his big plans.

"Without the gaming piece, this is a much different project," Perrucci said. "The retailers want to know the Venetian's going to be there."

Callahan said the partnership makes development of Bethlehem Works more feasible.

But Callahan tempered his support for the project with caution.

"Anything that happens with the (gaming) commission is still 18 to 20 months away," Callahan said. "The gaming commission's only had their first meeting."

Callahan noted other local developers are also seeking a gaming license, which could be put elsewhere in the city.

"To say what's a good site and bad site is up to the gaming commission," Callahan said.

Perrucci said the slots parlors are best suited for economic development in downtown areas.

"Pennsylvania needs to stop building everything on interchanges and killing the downtowns, Perrucci said. Reporter Gregg W. Bortz can be reached at 610-867-5000 or by e-mail at gbortz@express-times.com.

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