Casino Developer Now Wants to Revive the Concord Hotel

The company whose longstanding proposal to build a Las Vegas-style casino in the Catskills was derailed by the federal government last month is expected to announce this week that it is working with the owners of the dormant Concord Hotel to build a luxury resort and conference center on the 1,600-acre property.

Instead of building a casino at Monticello Raceway, as it had planned to do under the rejected proposal, the company, Empire Resorts, would instead move the harness track and its more than 1,500 slot machines 2.5 miles — from Exit 104 on Route 17 to Kiamesha Lake and the Concord, once the largest and one of the most famous Catskill resorts.

According to real estate executives and town officials who have been briefed on the project, the presence of the racetrack and the slot machines would enable the owners of the Concord, the developers Louis J. Cappelli and Scott Rechler, to finally rebuild it. The hotel closed in 1998, although its well-regarded golf courses are still operating.

But the Mohawk Indian tribe, Empire’s partner in the casino venture, opposes the move, fearing that Empire Resorts is abandoning plans to build a 0 million casino at the Raceway. The Mohawks, whose reservation straddles the Canadian border, issued a press release on Wednesday calling the plan an “express breach” of its gambling agreements. State law limits casino rights in the Catskills to Indian tribes. “We’re dismayed and angered,” said Lorraine M. White, the Mohawk chief. “We will pursue the protection of our interests through the courts, if necessary.”

On Wednesday evening, Empire Resorts denied that it had abandoned the Mohawk casino project. But the company acknowledged that it was in discussions with the owners of the Concord about a joint development, possibly involving the relocation of the track to a 160-acre parcel at the Concord.

Empire’s stock price jumped to .65 on Wednesday before closing at .46, down one cent. Empire’s stock had been as high as .70 a share last year, but plummeted to 86 cents after the Interior Department ruling.

The dispute comes only a month after the Interior Department scuttled the Mohawks’ proposal to build a casino at the track, despite preliminary approval, a successful environmental review and strong support from local officials and Gov. Eliot Spitzer. The Interior Department ruled that the Mohawks’ reservation was too far from the proposed casino.

On Jan. 11, the tribe, with financial support from Empire Resorts, sued Dirk Kempthorne, the secretary of the Interior, calling his decision arbitrary and capricious. Empire said on Wednesday that it would continue to work with the Mohawks on joint litigation strategy. But Empire sent a letter to the tribe saying that it would end “predevelopment work” on the project, although the site would remain available for a “future St. Regis Mohawk gaming project.”

The maneuvering between the Mohawks and Empire Resorts is only the latest twist in the many during the 12-year effort to build an Indian casino and revive the Catskill economy. At the same time, Mr. Cappelli, who has built residential towers and hotels in White Plains and elsewhere, has been unable to do much with the Concord, or the Grossinger’s resort in nearby Liberty, N.Y., in the nine years since he bought the two properties.

Anthony P. Cellini, the supervisor of the Town of Thompson, which includes the village of Monticello, said that he had talked with Mr. Cappelli briefly about his latest project, which the developer said would create 3,300 jobs. The developer said he believed he would get approval from the State Racing and Wagering Board to move the racetrack, while keeping the horse paddocks at their current location, Mr. Cellini said. It is unclear whether the new track would require an environmental review.

“It’s a good idea, but will they follow through on this,” Mr. Cellini said. “We’ve been working with Louis for almost 10 years.”

The town granted Mr. Cappelli site approval last year to build a conference center, hotel and spa, along with condominiums and town houses.