A GRASSROOTS EFFORT TO PRESERVE BETHLEHEM'S PAST WHILE ENSURING ITS ECONOMIC FUTURE

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From The Morning Call

Casinos ante up for Bethlehem land

Up to three operators are bidding millions in hopes of cashing in on the lucrative potential for slots parlor development.

By Matt Assad
Of The Morning Call

February 4, 2005

The players angling to bring a lucrative slots parlor to south Bethlehem have gotten serious, with as many as three nationally known casino operators putting millions of dollars on the table for a chance to buy 50 acres just north of the Interstate 78 interchange.

Lehigh Valley Industrial Parks Inc., which owns the land, last week received two bids that offer more than $400,000 per acre, or more than $20 million, according to sources.

Representatives of the Mashantucket Pequot Tribal Nation, owner of the Foxwoods Resort and Casino in Connecticut, and the Las Vegas Sands Inc., owner of the Venetian casino in the Nevada city, have confirmed they made bids. Both already have outlined publicly slots proposals for Bethlehem.

A new player, Aztar Corp., owner of four casinos including the Tropicana in Atlantic City, had been racing to submit a bid proposal before a deadline that LVIP set for early this week, according to state Rep. T.J. Rooney, a Democrat whose district includes south Bethlehem.

It remains unclear whether Aztar, of Phoenix, filed one before Tuesday's deadline. Aztar officials declined to comment.

Rooney said the bids are just the beginning of the gaming industry's attraction to Bethlehem.

''The kind of interest swirling around Bethlehem isn't surprising,'' he said. ''It's the perfect place to locate one of Pennsylvania's slot parlor developments.''

That interest has sent the value of LVIP's Bethlehem property skyrocketing. LVIP last year paid $4 million to buy 1,000 acres of former Bethlehem Steel land, and has begun to add roads and utilities to prepare it for development.

Foxwoods wants to build a $300 million slots parlor and hotel complex on the LVIP land. But Venetian is trying to buy the land to prevent competition for the $879 million casino complex it proposes to build with its partner, BethWorks Now, less than a mile away on old Bethlehem Steel land on the city's South Side, Rooney said.

LVIP Executive Director Kerry Wrobel would not confirm the receipt of any proposals by the Tuesday deadline, saying only that the land was being ''reserved for future development.''

LVIP's executive board is scheduled to meet next week, , when it could recommend which proposal its full board should accept.

Tropicana parent Aztar is the latest in a flurry of casino operators looking to cash in on the new Pennsylvania law that allows for 14 slot machine licenses statewide, Rooney said.

Aztar operates riverboat casinos in Missouri and Indiana, a 1,500-room hotel and casino outside Las Vegas, and its flagship Atlantic City resort, which includes a 2,100-room hotel and casino and a newly opened $285 million entertainment center called The Quarter.

''We are very interested in Pennsylvania,'' said Joe Cole, Aztar's vice president of corporate communications. ''But we do not comment on specific sites or proposals.''

State legislators last year approved a law allowing up to 61,000 slot machines at 14 locations. With projected revenues of nearly $4 billion, state officials want to use some of the windfall to roll back real estate taxes. In addition, roughly $15 million in fees paid to the host municipality and county could help spur economic development near the new gaming facility.

Because most gaming analysts believe the Lehigh Valley is a lock to get one of the gaming licenses, casino operators in recent months have been combing Lehigh and Northampton counties in search of the right partners and property.

And with nearly 1,800 acres of former Bethlehem Steel land north of I-78 open to development, Bethlehem appears to be the focus.

Other casino operators are reportedly looking along interstate suburbs such as Bethlehem Township. Mississippi riverboat casino operator Isle of Capri is looking at Lehigh County properties, including the Agere Systems site in east Allentown.

LVIP's effort to sell its land along Route 412 north of the I-78 interchange will probably spark a yearlong debate over where gambling should be in Bethlehem.

Would a slots parlor serve the city better at the Bethlehem Works entertainment and retail complex, where it could redevelop the former Steel lands? Or at the I-78 interchange, where a slots parlor — and the estimated 3.7 million gamblers it could attract — would be insulated from south Bethlehem's neighborhoods.

''Putting a slots parlor at the interchange is a horrible idea,'' said Rooney, who has publicly endorsed the Bethlehem Works plan. ''The interchange property is valuable without slots, whereas Bethlehem Works needs slots to reach its potential.

''Why would we want to put this at an interchange, where gamblers are going to get right back in their cars and drive off, without ever spending a penny in the South Side?''

Lou Pektor, the Ashley Development owner who has joined with Foxwoods for the I-78 plan, said his plans for a casino, hotel, convention center and shopping complex can serve Bethlehem better from the LVIP land.

''You take an $800 million project and put it in south Bethlehem and it changes the whole fabric of the community,'' Pektor said. ''But at the interchange, you get the benefits without having it in the face of your south Bethlehem residents.''

Michael Perrucci, the Phillipsburg attorney and co-owner of BethWorks Now, the investment group working with Venetian, said being in the community is key to their plans. He noted that, unlike Pektor and Foxwoods' plans, his plans for south Bethlehem include as many as 1,200 residential apartments.

''We're not just building a casino, we're building a community,'' Perrucci said. ''And Venetian has stepped up to the plate with us. They are committed to doing this in a way that benefits south Bethlehem.''

For now, Bethlehem Mayor John Callahan is reserving his judgment, and it appears he has plenty of time. The state Gaming Control Board isn't expected to issue its first license for 12 to 18 months.

''It's too early in the process to favor one site over another,'' Callahan said. ''What we are focused on right now is becoming as prepared as possible as a community for the tremendous amount of change this could bring.''

Photograph of the West End as viewed from the Pennsylvania Route 378 Lehigh River Bridge © James E. Frizzell, April 18, 2001 used by permission.
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