Wednesday, Jan. 5, 2005 | 9:28 a.m.
HARRISBURG, Pa. -- A Scranton businessman with close ties to a Pennsylvania Gaming Control Board member has purchased a once-famous 600-room resort in the Poconos for $25.1 million, fueling speculation he may seek a slot-machine casino license.
The sale of the Mount Airy Lodge in Mount Pocono was recorded in the Monroe County Courthouse on Thursday, more than three years after it ceased operations. The buyer was a corporation headed by Louis A. DeNaples, whose enterprises include a large auto-parts store, a landfill and vast real-estate holdings.
DeNaples is a former client of Scranton lawyer William P. Conaboy, a health care executive appointed to the gambling commission by state Senate Democratic leader Robert J. Mellow, whom Conaboy once served as an aide.
DeNaples heads First National Community Bancorp Inc. in Dunmore, on whose board Conaboy sits. He also chairs the board of Allied Services, the 2,500-employee health care company for which Conaboy is chief counsel.
Through a Gaming Control Board spokesman, Conaboy described DeNaples as "a friend" and said he would disclose any relevant details of their relationship if DeNaples pursues a slots license.
"It's all so speculative because DeNaples has not applied for a license yet," said the spokesman, Nick Hays. "There isn't even a procedure to apply for a license yet. We're talking (about) some time down the road." Asked whether Conaboy and DeNaples have ever discussed the Mount Airy Lodge purchase, Hays declined comment.
The Philadelphia Daily News reported Friday that a 2001 federal affidavit seeking search warrants linked DeNaples to reputed northeastern Pennsylvania mobster William "Big Billy" D'Elia. The affidavit said informants alleged that DeNaples made "good will" payments to D'Elia and paid protection money for DeNaples' Keystone Sanitary Landfill Inc., according to the paper.
DeNaples was not charged, nor were his properties targeted for searches, the Daily News said. DeNaples could not be reached for comment. A phone listing for D'Elia could not be located.
Gaming Control Board chairman Tad Decker said he was unaware of DeNaples' intentions for the property, and had no knowledge of contacts DeNaples may have had with organized-crime figures.
"The only thing I can tell you is, if Mr. DeNaples files for a license he'll get the same close scrutiny as anyone else that's going to apply for licenses. And that's not a threat -- that's just the way it's going to be," Decker said.
For much of the past century, Mount Airy Lodge was among the most visible resorts in the Poconos, thanks to heavy advertising on television in New York, 90 miles to the east. It encountered financial problems in the late 1990s that culminated in the suicide of owner Emil Wagner in 1999 and its sale by sheriff's auction in 2000 to the mortgage holder, Oaktree Capital Management.
DeNaples purchased the main lodge, a related property and more than 1,000 acres through a corporation called Mount Airy No. 1 LLC, said Bob Uguccioni, executive director of Pocono Mountains Vacation Bureau. The complex was already in decline when the resort was boarded up in October 2001, and the decay has since advanced. The only portion of the property currently being operated commercially is its golf course, Uguccioni said.
"It's going to take tens of millions of dollars to fix Mount Airy up to a suitable accommodations property," he said. "Gambling, I think, is the only way they can make it happen."
The Legislature approved up to 14 slots casinos in July, including seven at horse racing tracks. Five others, including two in Philadelphia and one in Pittsburgh, are "stand-alone" parlors that may house up to 5,000 machines. The other two are targeted for resorts, each with a 500-machine limit.
If DeNaples pursues a license for Mount Airy, he may face competition from Pocono Raceway, about 20 miles away. The owners of Pocono Downs, a harness track in nearby Wilkes-Barre, also have expressed interest in a gambling license.
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