No credit crunch for Cappelli

Funding for Concord project nearly in place

By FRITZ MAYER

KIAMESHA LAKE, NY — Although economists have been saying for weeks that U.S. credit markets are frozen, and there’s a growing financial crisis, that news seems to have missed the organizations that are financing the proposed resort in Kiamesha Lake.

Developer Louis Cappelli has proposed building a new $1.1 billion resort, race track and racino at the site of the Concord Hotel. The demolition of the old buildings is finished, and construction of the new buildings has begun.

At a meeting at the government center on October 2, Tim McCausland, president and CEO of the Sullivan County Partnership for Economic Development, told lawmakers that Cappelli was close to closing on his second bridge loan for the project.

The $33 million dollar loan brings the total amount of funding so far to $300 million. The money is coming from the Union Labor Life Insurance Company (ULLICO) and the Canadian Imperial Bank of Commerce (CIBC).

McCausland presented an email from Cappelli that said,“The $300 million is part of the $1.1 billion required for the project and demonstrates the commitment level of ULLICO, CIBC and Entertainment Properties Trust.” Cappelli added, “We are projecting a full-project closing on about the first week in November.” Entertainment Properties Trust, a Kansas City-based Real Estate Investment Trust, is providing $225 million in financing for the project. Additional funding will be raised through the sale of bonds.

Nearly 1,000 footings have already been laid at the site and construction is planned to continue through the winter. Construction workers started on the largest piece of the resort complex, which is the 750-room hotel, which will also house the racino with up to 3,500 video-gaming machines (VGM).

Other planned facilities, including the new harness racing track and the boutique five-star hotel and spa, will come later.

Legislation passed in Albany will allow Cappelli and his partner, Entertainment Resorts, to keep a greater percentage of the VGM revenues than they now receive, if the resort performs as well as Cappelli has promised in terms of creating new jobs and providing additional tax revenue for the state.