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PHILADELPHIA-Foxwoods Casino’s decision to abandon its site at the Philadelphia waterfront in favor of the Gallery at Market East has not deterred Sugarhouse Casino, which is planning its own gaming parlor on the Delaware. If it happens, the move will, however, have a major effect on the city’s Market East area.

The company’s decision to move its $670 million project from the waterfront was the result of a compromise between the casino’s developers, Philadelphia Entertainment and Development Partners—a joint venture between Foxwoods Development Co. LLC and a group of investors known as Washington Philadelphia Investors LP—Mayor Nutter and Gov. Rendell. The company had previously agreed to consider other sites after local residents and businesses objected to the building of the Foxwoods and Sugarhouse casinos. A report endorsed by Mayor Nutter found that the casinos did not fit into the 10-point action plan for redeveloping the Delaware waterfront.

Despite the opposition, Sugarhouse will continue work on the site of its proposed $550-million waterfront casino, according to a company spokeswoman. The spokeswoman tells GlobeSt.com that Sugarhouse is in a much stronger position than Foxwoods was in and is therefore not considering moving the casino to another location.

“We have the best site in the city,” the spokeswoman says. “Foxwoods’ original site was in an area with a lot of commercial activity, so there was a lot of concern about traffic congestion. We’re further north, we don’t have any neighbors on three sides of our property, this is not a commercial area.

“We also already have our permits from the city,” she continues. “Foxwoods wasn’t zoned yet. We have our zoning permit, we have our rough grading permit, and we have permission from the Army Corps to do some additional excavation work. We’re in a further permitting process with the Army Corps right now that we believe will be concluded soon, and we’re actually doing work on our site.”

The plan to move Foxwoods to the Pennsylvania Real Estate Investment Trust-owned Gallery at Market East has yet to receive final approval, but if it goes through, it could be a boon for the Center City area, which is also receiving a shot in the arm through the expansion of the Convention Center.

“The Gallery has not been a failed retail complex,” says Steve Gartner, president of Philadelphia-based Metro Commercial Real Estate. “In fact, many retailers do very well in it and around it. The challenge it has is the same with many vertical projects. The upper levels have never been as successful for retail as the street and lower level, which connect to the regional rail station. So, if ownership can creatively figure out a way to maximize the upper floors, the addition of the casino could be a great win for the project.”

Of course, the addition of a casino to the already busy Center City area is bound to bring problems that need to be addressed. “Everybody hopes it’ll be a very successful casino location, but with success comes people and with people come traffic and the difficulty getting gamers to the site,” says Gartner. “Those issues will have to be handled in a way that will enhance what’s there and don’t create a situation that’s bad for neighboring properties.

“The Gallery sits immediately adjacent to the convention center, which like all convention centers is extremely busy for bursts of time and extremely dead for long periods of time,” he continues. “A casino in this location would create a more continuous draw of visitors to Market East, which I think would significantly enhance retail, restaurants and other commercial activities there. So from that point of view, if the impact of it as far as traffic and congestion can be effectively managed, this could result in a very positive change for Market East.”

If handled correctly, Gartner points out, the casino could become a catalyst for entertainment venues in the area, as other upscale casinos have before. “If it could become that kind of upscale catalyst, then it would be a tremendous boon to Philadelphia,” says Gartner.

A final point in the plan’s favor is the fact that the casino, being located in an existing building, might be able to open more quickly than if it was being developed from the ground up. Nothing can happen, however, until discussions with the city and neighboring communities regarding the casino’s impact on the neighborhood are carried out and the proposal is presented to the Gaming Control Board.

“I imagine they’ll have to do a lot to the building, but PREIT is a very adept urban developer and they can certainly figure out how to make it work,” says Gardner. “I think it’s exciting, I think that no matter what, gaming is here in Philadelphia, that’s not going to change.” Calls to PREIT and Foxwoods seeking comment were not returned as of press time.

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