Last Friday, Dick Kempthorne, the U.S. Secretary of the Interior, rejected the applications from 2 tribes to locate casinos in Sullivan County — the St. Regis Mohawk tribe at the Monticello Raceway and the Stockbridge-Munsee tribe elsewhere in the Town of Thompson. Kempthorne, indicated that the proposed locations were too far from the tribes’ existing reservations to justify approval.
The rejection was not unexpected, given Kempthorne’s long-documented opposition to off-reservation casinos, but it still dealt a blow to casino proponents. The only possibility for approval will rest with a new administration and new Secretary of Interior in 2009, who can take up the issue again. For now, at least, it appears that casinos are dead.
There will likely be a lot of speculation on this blog about what this may mean for property values here in Sullivan County. Here are my thoughts. Over the past few years there has been a lot of investor speculation in anticipation of casino approvals in 2 property categories — larger tracts of vacant land (either in close proximity to the casino for commercial development, or in the surrounding areas for construction of worker housing), as well as homes and apartments in the mid-county area that could be rented or flipped profitable to meet the demand for workforce housing. I think it quite likely that some of the investors may now try to get out of their investments, which could drive down prices for those types of properties.
The impact on the overall second home market will likely be minimal. I don’t think the potential of casinos has had much impact on overall second home demand, and in some cases, the sceptre of casino development has been a negative. On the other hand, many sellers have had visions of gold and sugarplums in their eyes, thinking their houses are worth a lot more than they are because ‘casinos are coming.’ This latest setback may bring them back to earth. I don’t think anyone in their right mind can now say, "Casinos ARE coming" and price their property accordingly. Sure, they MAY come, but there’s not clear path to that outcome in the near term.
Personally, I think one of the biggest losers in this will be Bethel Woods. I’ve long felt (and written about on this blog) that the long term success of Bethel Woods will depend on renewed resort and hotel development in Sullivan County. Face it, we just don’t have many hotel rooms for weekend guests, and we’re pretty much down to one resort, the Villa Roma. A lot of potential hotel developers I’ve talked to over the past few years (even before the real estate downturn) considered at least one casino to be key to making the investment work here and extending the season. Without a casino on the horizon, we likely won’t see much happening on the resort development front, with the exception of some small, niche properties.