By Matt Youngfrau
MONTICELLO April 10, 2001 - When developer Louis Cappelli bought the Concord Hotel, he promised to rebuild the old Queen of the Catskills. And, after several delays, a groundbreaking was held last year.
However, part of that project includes a convention center, in which he wants a partner: Sullivan County.
Cappelli pitched his plan to the Legislature on January 11. At the time, Cappelli was vague on whether or not the Concord project would move forward without the convention center.
The legislators asked Planning and Community Development Commissioner Alan Sorensen and the National Development Council to review the data and report back. On March 15, the National Development Council met with the legislators to give them their preliminary findings. Due to the ongoing negotiations with Cappelli, those findings were not made public.
On Thursday, April 5, a special session of the Executive Committee was held to further discuss the issue. Bond Counsel Tom Myers of Orrick, Herrington, and Sutcliff, LLP, was on hand to review what the funding of the approximate $25 million project would entail. Cappelli was scheduled to attend the meeting but could not at the last minute, due to a conflict.
Myers discussed what the legal parameters would be between a public/private partnership. The county would have the option of selling two different kinds of bonds: General Obligation Bonds (the standard type) and revenue bonds. To do this would require a two-thirds vote of approval from the legislators, as it could become an over $20 million debt over a 20-year span.
Revenue bonds would also have to be funneled through another agency. It was suggested that the Sullivan County Visitors Association or the Industrial Development Agency (IDA) might serve in that capacity.
The legislators asked Myers how other similar projects fared. He cited examples from his 15 years of experience, stating that some were unsuccessful and some broke even.
Few, he said, made a profit.
One of the revenue streams discussed was room taxes. Seventy-five percent of all room taxes currently fund the Visitors Association. A suggestion was made that some of that revenue, which ends up in the general fund, could go to pay for the convention center. That idea, of course, led to the concern that the Visitors Association might become short on funds.
From there, the discussion broke down into the legality of the issue and whether the Legislature even wanted to be involved. The legislators, given the scope of the project, said they want to be very careful and not do something illegal or ill-advised.
"We have to explore all opportunities," Legislator Bob Kunis stated. "We should explore if we want to do this or not."
But how to go about that was the most pressing question.
"Where do you go from here?" Legislator Chris Cunningham asked. "Do we entertain this concept?"
"We have not asked what all the legislators opinions are," Legislady Leni Binder pointed out. "Do we have an interest in pursuing this? Are we willing to pursue this?"
"I've gone both ways on this," Legislator Rodney Gaebel said. "He [Cappelli] should go through the IDA and leave us out of it. It is like he is holding the Legislature hostage unless we back his $22.5 million convention center. That is unfair."
"It is outrageous that he is trying to do this," Legislator Kathleen LaBuda said. "I am against this. We have hotels here that are suffering. We can't do this."
"In the next two weeks, we need to think carefully about this," Legislative Chair Rusty Pomeroy advised. "There are obvious problems. We need to look into it."
The Legislators agreed on several points, however. As the plan stands now, they will not back Cappelli's proposal. They are interested in a convention center but said a better plan needs to be created.
Cappelli is scheduled to address the Legislature at another Executive Committee meeting on Thursday, April 19. At that time, some decisions on the project may be made.