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Developer Louis DeNaples Making Good Progress on the Permit Hurdles for
 a $300 million Redevelopment of the Mount Airy Lodge, Pennsylvania's One
 Time Honeymoon Haven Which Closed in 2001
By Matt Birkbeck, The Morning Call, Allentown, Pa.
Knight Ridder/Tribune Business News

Dec. 15, 2005 - The developers of a planned hotel and casino at Mount Airy Lodge believe the project has already obtained enough local and state permits to give the plan a clear edge when applications for a gaming license are submitted later this month.

Engineers for the project say it is so far ahead of other potential applicants that construction on the new hotel will begin this spring, with or without a gaming license.

"We're at least a year ahead of everyone else, and we feel that gives us an advantage with the gaming board," said Al Magnotta of Ceco Associates, the engineering firm overseeing the project.

Nick Hays, a Pennsylvania Gaming Control Board spokesman, declined to comment, saying only that the application deadline is Dec. 28.

"We don't comment on potential sites or applications," Hays said.

Mount Airy Lodge, the one-time honeymoon haven in Paradise Township, fell into bankruptcy and closed in 2001, but was purchased for $25 million in January by Louis DeNaples, a Scranton businessman planning to open a new eight-story, 200-room luxury hotel and casino.

DeNaples, a landfill owner, is seeking one of two available stand-alone slots licenses, which would allow as many as 5,000 slots under the state's new gaming legislation.

Magnotta said the Mount Airy project's first phase, which includes the hotel, casino and parking, will cost anywhere from $300 million to $350 million.

At least six other projects are seeking a stand-alone license:a $1.2 billion plan for the Pocono Manor Resort in Tobyhanna Township; a $525 million entertainment complex in east Allentown; an $879 million hotel/casino in south Bethlehem; a $300 million project near Gettysburg National Military Park in Adams County; a $300 million hotel/casino near the Limerick power plant, Montgomery County; and a $150 million development in Lancaster.

While the other projects were all announced during the past few weeks -- the Montgomery and Lancaster county plans last week -- DeNaples began working with Paradise Township officials before purchasing the property in January to acquire necessary township permits and pave the way for time-consuming state approvals.

"These guys are way ahead of everybody," said Debra Brady, the township zoning officer. "We knew gambling was coming, and the township spent two years ensuring all its ordinances were in place and ready for Mr. DeNaples."

By comparison, the Pocono Manor project in Tobyhanna Township, which features a 25-story hotel/casino, requires a change in township zoning to allow gambling and to raise the height limitation from 38 feet to 300 feet.

The size of the hotel has drawn criticism from local residents, who have begun petition drives against the plan. A public hearing is scheduled for Dec. 27, just before a vote by the supervisors on the zoning amendment.

Brady said Paradise Township residents also were concerned about the height of the proposed hotel and brought those concerns to DeNaples.

"Everyone had Las Vegas skyscrapers in their head, so their architect went to other resorts in the area and came away with a design absolutely in place with the culture and aesthetics of the Poconos," Brady said.

In addition, Brady said DeNaples' engineers and consultants met with local police, fire and emergency crews and worked closely with the township engineer.

"They've fostered a great deal of good will," Brady said.

Magnotta said other issues such as traffic and environmental studies already have been completed, and Paradise Township has approved a conditional use permit and an Act 537 sewage plan.

The project received a boost Tuesday when the township agreed, in principle, to assume ownership of a major entrance road to the resort from PennDOT, and a completed land development plan will be submitted to the township in January, Magnotta said.

"Anyone understanding the difficulty of the regulatory process in Pennsylvania of acquiring all the permits that you need knows it's a substantial issue," said Robert Uguccioni, executive director of the Pocono Mountains Vacation Bureau.

"If they are given a slots license, they can operate sooner than any other candidate," he said, "and that means the state could get revenue sooner, but whether it plays any role with the gaming commission remains to be seen."

Greg Matzel, who announced plans to develop Pocono Manor in July, said he estimates he's only three months behind Mount Airy and that he is making up ground in the permitting process with "lightning speed."

"From everything I've heard, it's not going to be who can build the fastest, but who can provide the greatest amount of positive impact," Matzel said.

Rich Ruden, a spokesman for Aztar Corp., which is behind the Allentown project, said 18 of the 23 acres at the site off Union Boulevard have been approved for gaming. As for other permits, Ruden said, "We have begun the process."

He declined to comment on whether Mount Airy had an advantage, saying "our priority is to get our application completed by Dec. 28."


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