Phila. Council delays vote on special casino zoning for Strawbridge’s site

City Council today put off a vote to apply special casino zoning to the old Strawbridge & Clothier department store after an investor group that owns the top six floors of the building voiced objections to a Foxwoods Casino at the site.

Joshua Cohen, an attorney for Gramercy Capital Corp., said the real estate investment company opposes the zoning because it "was not in our best interests."

Cohen said the building is a "business condominium" and the upper floors are controlled by Gramercy. Its tenants include state government offices, the city's Community Behavioral Health office and Citizens Bank.

Council has tabled the zoning matter until next Thursday.

The surprise delay in a zoning vote came after an afternoon of testimony from officials from Foxwoods Casino and the Pennsylvania Real Estate Investment Trust (PREIT), which purports to own the Strawbridge's building.

At the start of testimony, a PREIT president Joseph Coradino said negotiations with Foxwoods Casino to open a slots parlor in the historic building were ongoing.

"We're hopeful that a transaction can be concluded, but one is not at this point," said Coradino.

He made no mention of Gramercy Capital.

Council must decide whether to zone the Strawbridge's building for a slots parlor. Last September, Foxwoods said it would consider relocating its slots parlor from the waterfront in South Philadelphia to the Gallery mall in Market Street East. Now the developers view the old Strawbridge's site as a better alternative.

Coradino said while the two sides have reached agreement on economic terms of a lease, they are still working on the details of the "gaming partnership."

"We have scheduled meetings over the next week to make progress in our negotiations," Coradino said.

He added that the two sides were "motivated" to reach a deal.

Foxwoods needs to get new casino zoning for the Strawbridge's building, as before it can ask state regulators to move its location. Under terms of its slots license, Foxwoods was supposed to be operating by now. It must now ask the Pennsylvania Gaming Control Board for an extension.

Foxwoods was formed in 2005 as a partnership between local investors and the Mashantucket Pequot Indian tribe, which operators the Foxwoods mega-casino in Connecticut.

But the role of the tribe has receded as local investors take on more financial responsibility for financing the venture.

Brian Ford, chief executive for a partnership representing the main local investors, testified that given the tight credit markets, the original local investors have been asked to contribute more funds in order to proceed with the relocation.

"We went back to original partners and said we need for you to step up," he said.

The main local investors in Foxwoods include three charitable trusts for the family of Comcast-Spectacor chairman Ed Snider; the daughter of entrepeneur Lewis Katz; and the family of developer Ron Rubin.

The move to Strawbridge's would require the renovation of two floors of the department store - a far simpler design than originally envisioned for the waterfront, where Foxwoods planned a hotel, a sprawling casino and parking garage.

Ford said if the project gets city and state approval, Foxwoods could have a casino with 3,000 slots open by "early next year."

He did not disclose how much the renovation would cost, but said, "The ranges are comfortable for our financing."

Although Council delayed a vote on the zoning for Strawbridge's, it did vote unanimously to shift to the city's Planning Commission the authority for finalizing a plan of development.

Council heard testimony from a half-dozen neighborhood groups that object to a downtown casino.

George Moy, a long-time resident of Chinatown, where opposition to the neighboring Foxwoods casino runs high, urged Council to reject the bills.

"There are no specific proposals, no drawings, nothing and yet we are expected to roll over and play dead," Moy said.

Absent from the hearing were members of a broad faith-based and community coalition of casino opponents.

"We have chosen not to subject our people to the indignity of testifying at these proceedings whose only intent is to steamroll through to a predetermined outcome," said Ellen Somekawa, an Asian-American community leader and organizer of No Casino in the Heart of the City Coalition.