Park Place proposing 2,000-room resort in N.Y.

David Strow

Tuesday, May 2, 2000 | 11:10 a.m.

Park Place Entertainment Corp. took a big step toward opening a resort in New York's Catskills Monday, picking up an option to acquire a 1,400-acre resort that would be home to a massive new tribal casino.

If it chooses to exercise the option, Park Place would pay $65 million for Kutsher's Resort Hotel and Country Club, located about 90 minutes north of New York City. Park Place paid $1 million for the five-year option.

For more immediate use, Park Place acquired a separate 50-acre land parcel from Kutsher's for $250,000. Park Place said it will place this parcel in trust for the St. Regis Mohawk Tribal Council, for use as the site of a 2,000-room gaming resort.

The resort, which Park Place said will rival the mammoth Foxwoods tribal casino in Connecticut, will feature a 160,000-square-foot casino, 50,000 square feet of retail space, 100,000 square feet of convention space and a championship golf course.

Park Place will manage this property for an initial term of seven years, under terms of its exclusive right to manage the gaming operations of the Mohawk tribe. Park Place paid $3 million for this right, and will be entitled to 30 percent of the cash flow produced by the casinos it manages for the tribe.

"We have not yet formally gone to BIA (Bureau of Indian Affairs)," said Park Place general counsel Clive Cummins. "We were waiting until we had the definitive agreement executed."

Though the company didn't provide a specific timetable for the resort's construction, Chief Executive Arthur Goldberg told analysts this morning that he believed the resort could open within three years.

The Mohawk tribe pulled out of plans to partner with the Catskill Development Group to enter into the Park Place pact. This agreement had called for the construction of a casino on 30 acres in Monticello, N.Y.

Upon hearing of the Park Place deal, the Monticello developers claimed Park Place had no plans to develop a Catskills casino, and was only trying to protect its interests in Atlantic City.

The New York Times, citing officials in Sullivan County, N.Y., reported today that local officials "would not look kindly on a casino at Kutsher's, or a delay in the county's long-awaited casino project."

Goldberg, however, maintained that the Catskills property represented a lucrative opportunity for Park Place.

"We think the New York casino will draw very heavily from the Connecticut (casinos) now in place," Goldberg said. "There are numerous cross-marketing opportunities with these two markets (the Catskills and Atlantic City). That really had a big effect on this decision."

Gaming analyst Robin Farley of Deutsche Banc Alex. Brown saw Monday's announcement as a fairly clear signal that Goldberg is quite serious about developing a Catskills resort.

"If that (delay) is what the company's intention was, I wouldn't expect them to place land in trust for the tribe," Farley said. "That's not much of a delay tactic.

"If there's going to be increased tribal gaming in the Northeast, Park Place is better off being a part of it than not."