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Best of Liz Benston

Gaming Guru

Liz Benston
 

Las Vegas Sands Eyes Site of Pennsylvania Mill

9 December 2004

LAS VEGAS -- The owner of the Venetian resort in Las Vegas, a month after failing in its efforts to help pass a casino petition in Nebraska, has signed an agreement with an investor to build a casino in another unusual spot -- the site of an historic steel mill in Bethlehem, Pa.

The land, home of the defunct Bethlehem Steel works, is about 70 miles from Philadelphia, where competitor Caesars Entertainment Inc.plans to build a casino and other companies are eyeing potential slot parlors in prime locations.

In a filing with the Securities and Exchange Commission Wednesday, Las Vegas Sands Inc. said it intends to jointly own and develop the 124-acre site in Bethlehem with the investment group that now owns the land.

Las Vegas Sands paid Bethworks Now LLC $2.25 million to partially reimburse the company for "property-related expenses" it incurred previously and will pay all ongoing operating expenses on the property until a gaming license is obtained for the site, the filing said. After obtaining a gaming license,

Las Vegas Sands will make another $2 million payment to Bethworks and the property will be transferred to a joint venture company, it said.

New York attorney Richard Fischbein, one of several partners in Bethworks Now, said the site represents a "tremendous" redevelopment opportunity in downtown Bethlehem, which is about 70 miles from New York City. The partnership is approaching retail developers and others about creating a mixed-use center with a mall, theater and even housing, he said.

Millions have already been spent cleaning up the land, which features remnants of the steelworks, he said.

Sands officials declined to comment on the deal, citing a quiet period with the Securities and Exchange Commission. The company is preparing to issue an initial public offering of stock and is promoting the offering with bankers and other investors.

Meanwhile, Caesars Entertainment is forging ahead with plans to build a $350 million casino and entertainment complex along the Delaware River in Philadelphia.

Several gaming companies have been scouting casino sites in Pennsylvania since the state Legislature this year authorized 14 slot machine venues to help raise tax revenue. Various bidders across several cities are expected to compete next year for casino licenses, which would include offering slots at racetracks.

Caesars spokesman Robert Stewart declined to comment on the Las Vegas Sands agreement and would only say that his company is "focused on our project in Philadelphia."

Separately, Las Vegas Sands disclosed in the SEC filing that it has signed an agreement with Hong Kong-based investment group Far East Consortium International Ltd. to develop and operate a casino resort on the "Cotai Strip" in Macau.

The project marks the second casino resort under development for Las Vegas Sands, which had already discussed plans to build a counterpart to its Venetian resort in Macau along with a series of hotels managed by other companies.

The deal with Far East Consortium calls for the company to develop, design and build a resort hotel complex including a space to house a casino and showroom. Sands companies Venetian Macau and Venetian Cotai will build and operate the casino and showroom under a lease from Far East Consortium in addition to the previously announced Macau Venetian Casino Resort. The Far East Consortium hotel is expected to have 2,000 rooms operated by an "internationally recognized hotel management group" and would be expanded to 3,000 rooms on demand, the filing said. The casino and showroom would be about 140,000 square feet. The agreement calls for the project to be completed within six months of the completion of the Macau Venetian Casino Resort.

Las Vegas Sands previously named Starwood Hotels & Resorts Worldwide Inc., Marriott International Inc., Four Seasons Hotels Inc., Hard Rock International and InterContinental Hotels Group Plc as companies that have signed letters of intent to operate hotels on the Cotai Strip.