Cappelli enlists casino giant to revive Concord
Mohegan Sun will join casino-hotel, sources say
By Victor Whitman
Published: 2:00 AM - 04/28/11
KIAMESHA LAKE — Concord owner Louis Cappelli has been negotiating with the casino company Mohegan Sun to revive his defunct luxury hotel and racino plan on the site of the one-time jewel of Catskill resorts.
Cappelli, whose plans for a $1 billion resort blew apart three years ago, is close to a deal, according to sources.
"I have a major partner, to be announced this week," Cappelli said on Wednesday.
He said he could not yet reveal his partner as he is bound by a confidentiality agreement.
The Mohegan Sun Tribal Authority owns two full-service casinos, Mohegan Sun in Connecticut — the second-largest casino in the United States — and Mohegan Sun at Pocono Downs in Pennsylvania.
The chief executive officer is Mitchell Grossinger Etess, a Sullivan County native and grandson of Jennie Grossinger, who helped turn a small hotel in Liberty into an internationally known resort. Ironically, if this deal does come to pass, Etess could play a role in reviving the Concord, once the chief rival hotel of his family's business during the county's resort heyday.
Calls to Mohegan Sun weren't immediately returned.
Cappelli razed the old hotel and did initial foundation work before abruptly stopping in late 2008 after he couldn't get financing. He lost most of the Concord lands in a court settlement with his former partner, Entertainment Properties Trust.
The former hotel site, which he still does own, is mired in debt.
More than two dozen contractors have liens claiming unpaid bills totaling around $25 million. One of these contractors, the engineering firm, Edwards & Zuck, filed a foreclosure action in state Supreme Court on April 6, claiming its been stiffed $1.6 million.
Cappelli contesting suits
Cappelli said he's confident this will be worked out.
"The lawsuit with E and Z will take years to resolve since we are contesting the basis of the suit," Cappelli said. "We will be amicably resolved with them long before that time. In fact we expect to be resolved with all lien holders within 60 days prior to recommencing construction. The financing markets are more favorable at this time to close project financing."
Edwards & Zuck's managing partner, Matthew Donolli, said Cappelli did call to say he was starting up again.
"We are extremely upset that Cappelli has gone forward with the project and left his professional service partners without payment," Donolli said. "We don't know how real the new project is. Enough is enough for us and we are foreclosing."