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webkey New York State(Photo: Chris Cusumano / Poughkeepsie Journal)

ALBANY – For years, developers had hoped New York would open its doors to private casinos in an effort to convert abandoned or little-used resorts in the famed Borscht Belt of the Catskills.

When voters in November approved private casinos in the state, those developers were quick to outline their plans for facilities like the former Nevele Grand Hotel near Ellenville, Ulster County, or Grossinger's Catskill Resort Hotel in Sullivan County.

But in recent days, one potential casino developer — Trading Cove New York — dropped its plan for a facility in Thompson, Sullivan County. Another, Connecticut-based Foxwoods Resort Casino, signaled it was rethinking its plan for renovating Grossinger's.

Both cited a similar obstacle: Orange County.

Last year, the mid-Hudson Valley county was grouped in with the Catskills region when state lawmakers and Gov. Andrew Cuomo approved a law governing the casino-siting process.

"The possibility of a casino operation in Orange County has made the certainty of securing financing very difficult," said John Gallagher, a spokesman for the proposed Foxwoods Catskills Resort. "However, we are still exploring our options at this time."

Orange County has proven to be attractive to major casino operators, with both Caesars Entertainment and Malaysian casino giant Genting Group proposing facilities in Woodbury and Tuxedo, respectively. Caesars has partnered with Rochester-based developer Flaum Management Co. Inc.

Saratoga Casino and Raceway, which operates a racetrack casino in Saratoga Springs, has also proposed a casino in Newburgh, Orange County, while at least two other proposals have been floated in the county.

The Orange proposals have a major economic advantage over the Catskills: They're closer to New York City. Woodbury, for example, is about an hour from the city, about 40 minutes closer than Ellenville. Tuxedo is just 41 miles from Manhattan.

On Thursday, Trading Cove New York — a partnership that included the Stockbridge-Munsee Community, a Native American tribe in Wisconsin — revealed it would end its quest for a casino, which had been on the table for more than a decade. An Orange County casino would make the Trading Cove proposal not viable, the group said.

The group will look for alternate uses of the 440-acre site, according to a joint statement from Len Wolman, managing member of Trading Cove New York, and Wallace A. Miller, tribal president of the Stockbridge-Munsee Community.

"Trading Cove and the Stockbridge-Munsee Community have concluded, after careful review, that the possibility, maybe even the likelihood, of a destination resort with gaming in Orange County so dilutes the market in Sullivan County that building and sustaining a first-class resort in Sullivan is not financially feasible for us," the statement reads.

Formal proposals for New York casino licenses are due by June 30. Twenty-two entities had initially submitted a $1 million application fee; four have since requested a refund.

The state Gaming Facility Location Board is scheduled to award four licenses this fall in three regions of the state: the Southern Tier, the Albany area and the Catskills/Orange County region.

Lee Park, a spokesman for the state Gaming Commission, pointed to the state law governing the process, the Upstate New York Gaming and Economic Development Act. The law, passed by lawmakers and signed by Cuomo last year, lays out the siting process and defines upstate as north of Putnam, Westchester and Rockland counties.

"This is an open and competitive process in which commercial casino applicants must put forth the best plans to bring economic growth to the state, region and host locality," Park said. "The Gaming Facility Location Board will closely review all the applications according to a comprehensive evaluation criteria to ensure the greatest benefit."

Lawmakers questioned whether including Orange County in the selection process is true to the law's original intent. Orange County's economy is better than those in Sullivan or Ulster, legislators said, and the law is aimed at helping struggling areas with jobs and new revenue.

Sen. John Bonacic, R-Mt. Hope, Orange County, who chairs the Senate's Racing, Gaming and Wagering Committee, said he believes Cuomo wanted to include Orange County in the region so it could share in the 10 percent regional share of casino tax revenue. Bonacic's original proposal did not include Orange County, though he voted for the bill that ultimately passed.

"Orange County was not included in my original legislation because my intent was to locate resort destination casinos in areas which were distressed, mainly with high unemployment and low median income," Bonacic said in a statement Friday.

Assembly Racing and Wagering Committee Chairman James Gary Pretlow, D-Mt. Vernon, Westchester County, expressed a similar sentiment. Like Bonacic, Pretlow also voted for the casino bill.

Pretlow said he believes an Orange County casino could derail the intent of the law.

"I personally believe that the legislative intent was for economic development and to bring people to places that they normally haven't been going," Pretlow said.

Some Orange County casino hopefuls have said they would benefit — not harm — a Sullivan or Ulster project.

"Located north of Route 17's major route to the Catskills, the project will complement, not compete with a casino in Ulster or Sullivan counties," according to a Saratoga Raceway presentation for its proposed Newburgh casino. "Situated minutes from the Hudson River, the project will anchor the East end of an economic revitalization corridor to the Catskills that will positively impact Kingston, Poughkeepsie, Newburgh, Beacon, Wallkill, Middletown and Ellenville."

Lee Silberstein, a spokesman for the group hoping for a casino at the Nevele, said Ulster County "needs the economic stimulus that only the Nevele can provide."

"While competition from Orange County poses a serious challenge to the viability of gaming facilities in Ulster and Sullivan counties, we are confident that our location, the support we have garnered and our plan are strong enough to withstand the competition," Silberstein said.

Jeff Gural, the owner of Tioga Downs in Nichols, Tioga County, the issue in the Catskills is one that the state will need to balance: trying to get the more revenue but also trying to help a struggling area. Gural is trying to obtain a license in the Southern Tier region, which stretches west to Wayne County.

"I think everyone recognizes that Orange County is a better location and a casino in Orange County would make it difficult to finance something in Sullivan County," Gural said. "But I think that's going to be up to the state to decide: Is it more important to get the greater revenue you would get from Orange County or is it more important to help try to help the Catskills revive?"

Jon Campbell: This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Twitter.com/JonCampbellGAN

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