Palace Inn owner sees resort casino as option
Wednesday, March 28, 2007
By Mark Belko and Tom Barnes, Pittsburgh Post-Gazette
Developer Craig Cozza has big plans for the Palace Inn, a longtime Monroeville landmark that closed nearly three years ago, but whether they eventually could involve slot machine gambling could come down to a tenth of a mile or so.
A resort gambling license is one of the options Mr. Cozza, president of Cozza Enterprises in Squirrel Hill, is considering for the old hotel, which he purchased last year for $7.58 million.
The Pennsylvania Gaming Control Board has two such licenses to award to resorts with at least 275 rooms and year-round amenities, but so far has found no takers. A resort could have up to 500 slot machines.
Mr. Cozza said yesterday a resort license is one of the options he is considering for the prime site, at the busy intersection of Route 22 and Route 48. But he added, "We're not actively pursuing it at this point."
He said his main focus right now is getting the hotel up and running again. He is spending in excess of $20 million to transform the Palace Inn into an upscale hotel with 278 rooms, retail shops and restaurants, a large sports bar, and banquet rooms for weddings and other events.
But whether the Palace Inn ever contends for a resort license could hinge in large part on just how far it is from the proposed Majestic Star casino in Chateau, between the Carnegie Science Center and West End Bridge.
Section 1305 of Act 71, the state slots law, says no resort casino can be located "within 15 linear miles" of any other casino.
That means 15 miles "in a straight line, or as the crow flies," not miles as driven in a car, said gaming board spokesman Doug Harbach.
Mapquest measures the driving distance between the Majestic Star and Palace Inn at roughly 15.8 miles. Measured on a map, the linear distance from the center of the Majestic Star site to the intersection of routes 48 and 22 works out to about 13.76 miles, which, if accurate, would disqualify the Palace Inn.
Mr. Cozza acknowledged that in terms of linear miles "we're very close" but said his company has not taken any official measurements.
Professional engineers would probably have to be called in to determine the exact linear distance. That has been done with one possible resort casino applicant in the Poconos to prove that its site is more than 15 miles from the licensed standalone Mount Airy casino in Monroe County.
Gaming board members said it makes no sense to place gaming venues too close to each other.
"You need to separate them in order to separate the marketability of each one," said board member Jeffrey Coy.
State Sen. Sean Logan, a former Monroeville mayor, said he has concerns about the impact a resort casino could have on the Majestic Star. He said he also is worried about further clogging the congested Route 22 and Route 48 intersection.
Mr. Logan also questioned whether the Palace Inn would offer the type of year-round amenities required for a resort license.
State law says such amenities include sports and recreational activities and facilities like a golf course or driving range; tennis courts; swimming pool; health spa; convention, meeting and banquet facilities; and entertainment and restaurant facilities. Resorts must offer at least three to qualify.
Mr. Cozza said the Palace Inn would qualify with a swimming pool, a spa, tennis courts and banquet facilities.
Mr. Logan said he has "a lot of questions and concerns" about any plans for a resort casino at the Palace Inn.
"I'll wait and hear what they have to say. It's an interesting idea, but that's not to say I support it. I'm trying to get all the facts before I make an informed decision here," he said.
Mr. Cozza said he did not think the Palace Inn would compete with the Majestic Star because resort guests, under the law, must spend $25 a person on other amenities before they are able to use the casino.
"I really think it's such a different type of license. [Majestic Star] certainly would be in a better competitive position than us with people [at the resort] having to spend $25 on site," he said.
In a related matter, the gaming board held a hearing yesterday on whether, or how, to change regulations governing resort hotel casinos before a new round of applications is opened in about a month. The only previous applicants, Seven Springs Resort and Nemacolin Woodlands, withdrew last year.
Some discussion focused on whether time-share or condominium rooms rented to visitors should count toward the 275 rooms a resort hotel is required to have.
The length of time a resort visitor would be required to use an "amenity" in order to be allowed to enter the casino also was discussed.
So far, besides the Palace Inn in Monroeville, some resorts in the Poconos and one near Valley Forge have expressed interest in possibly seeking a 500-slot casino license.