Delmar, Millsboro, Georgetown projects all in planning stages

Delaware State News

DOWNSTATE — James S. Rostocki’s plan to develop a casino in Delmar may lack the prominence of a rival proposal to bring slot machines and other forms of gambling to Sussex County, but it got a high-profile endorsement of sorts last week.

A state-financed study, unveiled Tuesday, recommended that Delaware add two casinos — in the Wilmington area and in southwestern Delaware. It did not specify who should build those casinos, but Mr. Rostocki so far is the only person to go public with a plan to create one in the southwestern corner of the state.

His project would arise across U.S. 13 from the Delmar motorsports complex, which includes Delaware International Speedway and U.S. 13 Dragway. Mr. Rostocki, a Wilmington-based developer and real-estate investor, would build a hotel, stores and possibly a conference center along with his casino.

Mr. Rostocki’s venture has been overshadowed by the more ambitious Del Pointe, whose backers promise to open a harness-racing track, a hotel, a shopping center, movie theaters and a water park if they win state approval for a casino in Millsboro. Developers there talk of 6,000 jobs during construction and more than 5,000 positions afterward.

"Before, we were competing against Del Pointe," Mr. Rostocki said. "They’ve always had a little more momentum. But with a state-funded study supporting our proposal, it has given us more momentum and should help attract more investors."

Delmar’s state representative, Republican Clifford G. "Biff" Lee of Laurel, said he has drafted an amendment that would ensure Mr. Rostocki’s project site is eligible for consideration as the location of a casino. Currently, casinos are permitted in Delaware only at existing horse-racing tracks — Dover Downs, Harrington Raceway and Delaware Park in Stanton. Mr. Rostocki would not offer racing.

"If the state is dead serious about adding casinos, I think this area has to be seriously considered," said Rep. Lee, who added that he is acting from a sense of fairness — not from a fondness for gambling. He explained that even after aiding Mr. Rostocki, he may vote against casino expansion anywhere in the state because he sees it as a dubious tool in trying to shore up state finances.

Republican Vance C. Phillips of Laurel, who represents Delmar on Sussex County Council, said he has detected little support for legalized gambling among his constituents. Mr. Phillips, renowned for his pro-business approach to government, has harsh words for the casino business. "State-sanctioned gambling is a great way to tax the poor," he said. "But it is not a great way to build an economy."

But in Delmar, not everyone is alarmed at the possibility of adding "gambling town" to the image of a community with a long history in railroading, a fierce pride in its high school football team and a highly unusual nickname — "The Little Town Too Big for One State." Delmar, Del., and next-door Delmar, Md., jointly provide services to their residents, acting as much like a single town as is possible in a community with a state border running through it.

"I’m hearing positive remarks (about Mr. Rostocki’s project) from most people I’ve talked to," said Mary Lee Pase, a town council member on the Delaware side for the past 16 years. But she added that she is undecided about whether it would benefit Delmar. "People who are against are afraid of problems from outsiders coming in."

Delmar council must decide whether to revise its zoning code to specify that a casino could be permitted on commercial property like that which Mr. Rostocki has under contract to purchase. Ms. Pase said she wants to ensure a casino would cover the costs it would add to the operation of the town government and Delmar School District.

"We are not going into this yes-yes-yes," she said. "It’s one step at a time."

In November, the town surveyed its Delaware residents and found 52 percent of respondents in favor of the proposed zoning-code revision, with 35 percent opposed and 13 percent undecided.

But as Mr. Rostocki waits to see whether Delmar will make that zoning code revision, which is crucial to his moving forward, backers of Del Pointe say they already have nearly all necessary approvals from Millsboro and the state.

"Site work will begin the day after legislative approval," said housing developer Preston Schell, who is teaming with fellow Sussex businessman Gene Lankford on Del Pointe.

And while Mr. Rostocki seeks more partners, Mr. Schell said potential investors are awaiting Del Pointe’s getting a state go-ahead. "We’re confident (financing) won’t be an issue," Mr. Schell said. "We have enough money to get started."

Del Pointe also has an influential advocate in state House Majority Leader Peter C. Schwartzkopf, D-Rehoboth Beach, who said, "The thing I like about the Del Pointe scenario is that it would stick with our principal of helping the horse-racing industry," which, in turn, would help the farmers who raise, board and train horses.

But the consultants who favored southwestern Delaware as a casino site over Del Pointe’s south-central location recommended against increasing the number of racetracks. The tracks are partly funded by casino income, and the consultants said that launching additional tracks would result in the funding being spread so thinly that the statewide quality of racing would be diminished.

Indian River Board of Education also has weighed in on Del Pointe, which would be near Sussex Central High School. In September, after hearing citizen complaints about the possibility of safety problems and unhealthy influences on students, the board voted 6-3 to express opposition to a casino’s "being built within close proximity and/or adjacent to any of (Indian River’s) school campuses."

The state report, which is to be forwarded to the General Assembly this week, was prepared by TMG Consulting of New Orleans. First, though, it will be discussed Tuesday morning by the group that agreed to pay $98,250 for it, the Video and Sports Lottery Study Commission. The commission was formed by the legislature last year to look for ways in which gambling can beef up state revenue.

Especially galling to Mr. Schell was TMG’s determination that Del Pointe, some 20 miles from Rehoboth Beach, would not attract enough beach tourists to make Millsboro a better casino location than Delmar.

TMG relied on state tourism statistics showing 3.2 million visitors to Sussex County in 2007. But coastal business leaders contend that count is woefully inadequate. The Rehoboth Beach-Dewey Beach Chamber of Commerce claims that 3.5 million visit downtown Rehoboth Beach alone and nearly as many visit the surrounding area, which includes Dewey Beach, Midway and numerous Rehoboth Bay communities.

"They used a number that’s half of what we have," Mr. Schell said.

Also in the running for a Sussex County casino is a group that includes Philadelphia-area developer Michael Pouls, Kent County developers Constantine Malmberg and Ruby Schaeffer, Dover law partners Glenn Mandalas and Kevin Baird and Dover-based gaming-investment analyst Frank Fantini.

They would construct a casino and revive racing at the former harness track in Georgetown, which has been dormant for several decades. "We think our project makes sense because racing has occurred there," Mr. Mandalas said.

"Georgetown Downs" would be on U.S. 9, a primary route to Delaware beaches.

Georgetown, like Millsboro, is in south-central Delaware — outside the area favored by the consultants. Mr. Mandalas, too, argues that the consultants greatly underestimated the tourist market from which a south-central location would draw.

That leaves Mr. Rostocki as the only would-be Sussex casino developer who may be entirely pleased with the consultants’ work.

"We’re excited that they agreed with our vision," he said. Each developer "thinks their project is the best. Now we have a state report saying ours is best."