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Valley Forge Casino: A Main Line Investment Worth the Gamble

Pennsylvania's newest casino resort may soon be a financial boon for the community. If the Main Line will have it, of course.

By J. F. Pirro

Valley Forge Casino Resort’s Jon Lubert has a seat on the gaming floor. (Photo by Jared Castaldi)Budget cuts are common these days. But when members of Valley Forge Convention Center Partners wielded four gigantic pairs of scissors to cut the grand-opening ribbon at the region’s newest casino this spring, they were celebrating  a brand of entertainment—albeit one that’s heavily regulated in a high-stakes industry.

Indeed, there’s a lot of Main Line money invested in Valley Forge Casino Resort. Real estate magnate Ira Lubert is the ownership group’s chairman. And he, his son, Jon (founder of IL Hedge Investments), and the other partners hope to attract plenty of moneyed local patrons in return.

“Main Liners have been looking for a local venue like this—a place where you can feel comfortable that’s within a short distance,” says Villanova’s Michael J. Heller, president of Center City law firm Cozen-O’Connor and part of the ownership group. “This is a high-end product for a high-end area.”

Even so, they could never have dropped the thing in, say, Gladwyne. “No, they wouldn’t want it in our backyard, but we could put it in someone else’s backyard,” says Heller.
 

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George Washington didn’t sleep at the site of the Valley Forge Casino Resort, though he slept nearby. Had he chosen to gamble here, a $10 pub burger at the facility’s Valley Tavern (plus a tax he likely would’ve opposed) would get him a one-day access card to a 33,222-square-foot gaming floor with 600 slots and 50 table games.

One of three hybrid casino-resorts in the state, VFC requires an access plan—in this case, a $10 minimum purchase anywhere in the complex as a guest in the hotels or convention center (which Ira Lubert has owned since the 1990s). There’s also seasonal and annual memberships ranging from $20 to $69. “It’s a challenge for Valley Forge and for the gaming board, but it’s simple: You just don’t walk in here,” says William Ryan, chairman of the Pennsylvania Gaming Control Board. “We have to be faithful to that.”

The $165 million casino joins SugarHouse on Penn’s Landing, Harrah’s in Chester and Parx in Bensalem as the fourth casino within a 29-mile radius. It’s Pennsylvania’s 11th slot-machine casino, but also its smallest. Its March 31 grand opening attracted 2,000 guests and came a day after the state Supreme Court ruled against the rights of Foxwoods investors to retain their revoked Philadelphia casino license. By law, Pennsylvania could one day be home to 14 casinos—a contentious point for some.

“Our interest is in no less than zero casinos in this area,” says St. Davids’ Jim Schneller of the Eastern Pennsylvania Citizens Against Gambling. “Adding casinos is like adding fish to an aquarium. This has never been done to a major American city, and we might not see the moral decay for five or 10 years—especially among youth who are being led down another open cave for irresponsible spending. For those in their 40s and 50s, casinos are brainwashing them to think that today’s the day.”
 

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Valley Forge Casino Resort includes two hotels with 486 combined rooms, seven dining spots, two retail outlets, a nightclub, and a fitness center and spa. There are plans for headline shows that would attract high-limit patrons.

Both Upper Merion Township and Montgomery County have supported the  casino, and both stand to profit from it. One percent of gross gaming revenue goes to the township; another one percent is deposited into a restricted receipts account established by the Commonwealth Financing Authority for grants or guarantees related to county projects that qualify. Upper Merion also benefits from an amusement tax, and the county an occupancy tax on hotel stays.

VFC has also agreed to provide $625,000 for traffic improvements and $142,500 to Upper Merion Township for quality-of-life upgrades. The owners saw the busy corner as the “perfect spot,” says Jon Lubert. “Many of us have put our own net worth on the line, and that’s why we’re all so proud to see this come true.”

The access fee alone helps differentiate Valley Forge. “We feel that we’re special here,” Lubert says.

The space itself represents an incredible changeover from what was once wide-open space used for memorabilia conventions, furniture shows and the like. Its clean lines, curves and high ceilings are all based on a feng shui design. There are no windows, but thanks to the ceiling lines and lighting, it doesn’t feel that way. “We wanted it to be club-like, boutique-like,” says designer Floss Barber of Floss Barber, Inc. “We planned it so everything flows.”
 

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The vibrant carpet pattern came out of famed ’60s designer Emilio Pucci’s playbook. “We channeled him,” jests Barber. “Clients here want to feel like celebrities, so part of it was knowing the gambling patron. It’s really about comfort. Once you’re here, we want you to stay.”

In perfecting VFC’s design, it helped that Barber had time on his side after Parx, the state’s top-grossing casino, appealed the gaming board’s decision to award a Category 3 license to Valley Forge. It took 19 months, but in March 2011, the Pennsylvania State Supreme Court affirmed the awarding of the license, deciding that the venue fit the definition of an established resort hotel under its gaming law.

Construction began last September with $30 million in equity financing from Wynnewood’s CMS/Merion Realty Partners, where the ownership team’s Rich Aljian (of Radnor Township) is vice president. Ardmore’s TN Ward Company was the general contractor.

Valley Forge is front-and-center at Route 422 and the Pennsylvania Turnpike, one of the region’s busiest intersections, so it’s no shock that there’s been some community backlash. Anti-gambling activists have repeatedly cited the negative effects on quality of life—traffic, crime rate, bankruptcies, domestic violence, suicides and so on. They’ve also said that the casino detracts from and disrespects the historic and patriotic atmosphere of the adjacent Valley Forge National Historical Park. Saturating the region with gambling is only a siphon to the local economy, they argue. “People are going to run out of funds for the kids’ college. They’re going to run out of nest-egg money,” warns Schneller.

Schneller’s group has appealed to the U.S. Supreme Court, only to be blocked at every portal. They’ve appealed the access plan, filed for two stays to close the casino, and another to prevent activity at the site.
 

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Aside from the traditional opposition to all casinos, Heller says the community has been supportive. Jon Lubert is more blunt: “The only one who complains is the same one who has complained.”

Others say that the biggest plus has already been realized—jobs, some 900 of them. There were 16,000 applicants, according to Saverio “Sal” Scheri, VFC’s president and CEO.

Valley Forge Casino Resort is the 12th such facility Scheri has opened in the last 29 years. “Nothing here happened by accident. There’s an enormous amount of detail that went into everything,” he says.

As for the opposition, Schneller suggests that groups like his are at a fulcrum. “It’s open, but this is not a proven spot, and their timing is bad,” he says.

In other words, he hopes the Valley Forge experiment fails—which isn’t likely. An expected $64.6 million in gross slots revenue and $28.7 million in gross table revenue is anticipated in year one, according to the state’s gaming control board. The ownership group declined to discuss revenue projections.

From the state’s perspective, there’s a call for vigilance and compliance with regulations, along with the need for cooperation. “That’s the only way that this works for all of us,” says the gaming
control board’s Ryan. “We’ve seen nothing but cooperation.”

To learn more, visit vfcasino.com.