SugarHouse expansion plans unveiled

After delays from a protracted legal fight among partners and a redesign forced by changing market conditions, SugarHouse Casino is ready to launch its $155 million expansion.

In architectual drawings released to The Inquirer, Greg Carlin, chief executive of SugarHouse, said the expansion would take advantage of the casino's location on the Delaware River.

"We really want to engage the river," Carlin said. "There will be a lot of window space."

The expansion will include a second-floor banquet hall with a wall of windows and a riverside balcony. At ground level, SugarHouse will extend its riverwalk and a bike path along the northern end of the property, located on North Delaware Avenue next to Penn Treaty Park.

While the size of the gaming floor will increase from 58,000 square feet to 85,000 square feet, Carlin said most of the expansion would be used for dining and event space. The project includes a seven-story parking garage.

Late Thursday afternoon, Carlin gave a briefing on the casino's construction plans to Gov. Corbett. SugarHouse generates $120 million a year in state and local taxes, which are used to support schools and provide wage-tax relief in Philadelphia.

Stepping onto the riverfront deck of SugarHouse Casino on Thursday afternoon, Corbett had the same reaction as most first-time visitors.

"You have a great view here," said the governor, admiring the sweep of the Delaware River above the Benjamin Franklin Bridge. "This is gorgeous."

Carlin said site preparation could begin by the end of the year, followed in the spring with the construction of the garage, restaurants, and expanded casino.

But before work begins on the expansion, SugarHouse is spending $6 million to renovate and upgrade its existing casino. Carlin said interior changes would give the casino floor "a warmer look." The outdoor deck for the Refinery restaurant, meanwhile, is being enlarged and enclosed for a VIP lounge.

The expansion of SugarHouse has been many years in the making. The city's first casino opened in September 2010, but the second phase was delayed by the weak economy, as well as a disagreement among partners in Philadelphia and Chicago that landed in Delaware Chancery Court.

The lawsuit over voting rights was settled out of court in January, paving the way for investors to raise financing for the expansion and move forward with the project.

The first steps in the expansion will not even be seen by gamblers and will involve "combined sewer outflows" (CSO) that cross the property.

As part of its original development plan, SugarHouse agreed to upgrade and widen the Laurel Street CSO. The improvements are necessary to ease chronic flooding in Northern Liberties and Fishtown caused by storm-water runoff.

Carlin said SugarHouse has received all the permits to start work on the Laurel Street CSO - a $12 million project. "We have to replace the existing sewer with a state-of-the-art outflow with twice the capacity," he said.

In addition, SugarHouse recently applied to the U.S. Army Corps of Engineers for approval to begin work on the Shackamaxon Street CSO. Located on the northern end of the property, that outflow has to be moved to make way for the expansion.

The Army Corps, which has to approve any changes to waterways, has received public comment and will have to decide whether to grant a permit to SugarHouse. "We don't expect it to be a problem," Carlin said.

The expansion will allow SugarHouse to increase the number of slot machines from 1,600 to 2,100, and table games from 60 to 90. In addition, the casino will have a poker room.

The original design called for a 10-story garage and additional casino space. But those plans were scaled back because of heightened competition among regional casinos.

Carlin said the new design was better suited to current market conditions. "We had to cut back," he said. "This expansion is actually better than what we originally contemplated."

As SugarHouse begins its expansion, the state's Gaming Control Board is considering bids from six groups for a second license in Philadelphia. One contender - Wynn Resorts - wants to build a casino resort a mile north of SugarHouse.

Carlin said the casino market was "saturated at this point." He noted that across the state, revenue from slots has declined for the last 13 months.

Before going into his private meeting with Corbett, Carlin said, "We question the logic for issuing a second license at this time."

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