Valley Forge casino expansion, financing plan approved

Posted: April 28, 2011

Construction can finally begin on the long-planned casino for the Valley Forge Convention Center.

The Pennsylvania Gaming Control Board approved requests Thursday by Valley Forge Convention Center Partners L.P. to restructure its financing plan and expand the casino that's been four years in the making.

Last month, after two years of legal wrangling, the state Supreme Court sided with the Valley Forge group's argument that its Montgomery County site met the criteria for a resort hotel. Parx Casino in Bensalem had taken the group to court, contending that its site was not a resort hotel under the state Gaming Act and, therefore, should not have won the first of two casino resort licenses.

The King of Prussia casino, now budgeted at $130 million, is slated to open by next spring with 600 slot machines and 50 table games. When it debuts, it will become the fourth casino in the Philadelphia region, joining Parx, Harrah's Chester in Delaware County, and SugarHouse on Penn's Landing.

"We're pleased. Today's decision by the board is welcome news," attorney Adrian R. King Jr., who represents the investor group, said after Thursday's meeting. "It enhances the project's already strong financial position.

"We look forward to commencing construction, creating jobs for Pennsylvanians, and contributing revenue to the property-tax relief fund," King said.

At its public meeting in Harrisburg, the seven-member Gaming Control Board heard testimony from representatives of the proposed casino, including King. It granted approval to two petitions: one for a revised master site plan, the other permitting a corporate restructuring to include a new investor, CMS Cos. of Wynnewood, led by William A. Landman, principal and chief investment officer.

In April 2009, the board awarded the Valley Forge project a casino resort license. Within weeks, Parx mounted its legal challenge, and the case was tied up in court until last month's decision.

Under the revised master site plan, the casino floor will nearly double, from 18,000 square feet to 32,980 square feet. The gaming floor will move from the lower level to the main level of the convention center and incorporate a food court, retail space, and a multi-purpose room. Parking for 2,300 vehicles will be available.

Backers of the project told the board the expansion was necessary because of changes to the state's gaming law made after Valley Forge won its license. Those changes now permit a casino resort with up to 600 slot machines, instead of 500, and up to 50 table games, such as poker and blackjack.

A bigger casino floor to accommodate both slots and table games (legalized last year) meant increasing the cost from $107 million to $130 million, said King, costs that include $7.5 million for a table-games certificate when one is approved by the board. The slot-machine license fee remains at $5 million.

To help finance the additional costs, Landman and CMS were brought in, King said. On its website, CMS is described as a financial-services company that manages wealth for high-net-worth entrepreneurs and sponsors. In exchange for pumping $30 million into the Valley Forge project, CMS will have a 30 percent stake in the casino, he said.

Typically, bank financing requires no board approval, but equity financing - such as from Landman's group - into a gaming entity does.

The Valley Forge Convention Center was one of two Category 3, or casino resort licenses, approved by the board. The other was approved two weeks ago for Woodlands Fayette L.L.C., which plans to operate a casino at the Nemacolin Woodlands Resort in Fayette County, in southwestern Pennsylvania. It is slated to open within nine months.

The Valley Forge casino will be about 20 minutes from Center City, 20 minutes from Philadelphia International Airport, and five minutes from King of Prussia Mall, and accessible from Interstates 476 and 76, the Pennsylvania Turnpike, and State Routes 422 and 202.


Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.

|
|
|
|
|