PRINT THIS STORY:

CHANGE TEXT SIZE:

Second resorts

Developers and commuters are reinventing the Poconos

By Elizabeth Edwardsen

From the Philadelphia Quakers who sought a nature retreat in the 19th century to the honeymooners who dashed for a heart-shaped tub in the late 20th, the resorts of the Poconos have been drawing visitors of all sorts for nearly 200 years. Now real estate developers are rediscovering this four-county region in the northeast corner of Pennsylvania.

Blessed with a proximity to Philadelphia, New Jersey and New York (and their roughly 28 million commuters and vacationers), the Pocono Mountains loom large in the eyes of tourists and residential developers alike right now. New projects include the Great Wolf Lodge, a $92 million indoor water park and hotel in Scotrun, the first resort to open in the region in three decades.

Other developers have their eyes on some of the grand old resorts built by the Quakers or other Pocono vacation pioneers. The backers of two separate old Pocono resorts are competing for just one state license that will allow them to introduce casino gambling to an area renowned for natural beauty. Several other resorts are planning or have completed improvements such as golf courses or luxury spas. “We’re most certainly becoming a hot prospect,” said Robert Uguccioni, executive director of the Pocono Mountains Vacation Bureau. Uguccioni, who has held that job since 1967, has witnessed the region’s ups and downs. “We have a long tradition of transition,” he said.

But the current intensity of development — with a boom in primary and secondary housing and with attractions opening, reopening or expanding — is unprecedented in his 40-year memory, he says.

The Great Wolf Lodge, a 401-room, all-suite resort aimed at families and containing a 90-foot-tall water park with indoor slides and pools, may have started the new resort boom, says Uguccioni. “A lot of it is the domino effect,” he said. “When they hear something is going up here, people want to take a look.”

But though Great Wolf Lodge was built from scratch, environmental concerns and a local preference for conserving open space means that most future development is likely to occur at existing businesses or resorts, Uguccioni says.

That’s just what Matzel Development has on the drawing board for Pocono Manor Resort & Casino, a $1.4 billion development planned for Tobyhanna Township. This project would include a 750-room hotel, a casino complex, an entertainment venue, two golf courses, a retail-village shopping area and other amenities, all on the grounds of Pocono Manor. The resort would expand out from the manor, a retreat the Philadelphia Quakers built in 1902. The old 257-room hotel will remain open.

CBL & Associates is the partner firm responsible for the planned 616,000-square-foot retail village. Project spokesman Ben Eckerson says the village would be centered on a circular street surrounding a village green and “have the look and feel of a base mountain lodge shopping village like you’d see in Aspen or Stratton or Vail.”

Most of the shops will be single-story units, though some could have two levels, says Eckerson. The one-story shops will have time-shares, condos or “high-roller suites” above them, he says. The developers are talking about a 2008 opening for the retail village.

The future of the retail village and much of the Pocono Manor development is uncertain, however, because things depend to some extent on Matzel’s success in obtaining a license for the casino portion of the project. Eckerson says no decision has been announced on which portions of the project would move ahead should the gaming license not be granted.

The other competitor for that license is the Mount Airy Resort & Casino, owned by Scranton, Pa., businessman Louis A. DeNaples. The Mount Airy Lodge was a popular honeymoon destination that went under in 2001. DeNaples bought it last year and broke ground in July on what he said would be a $360 million gaming and resort complex.

DeNaples’ eventual plans include 400 hotel rooms along with conference, entertainment and parking space. The slot machines could number 5,000. A decision on the gaming license is reportedly due at the end of this month.

Sean Strub is another businessman who is revitalizing a historic property, albeit on a much smaller scale. Strub is president of the Hotel Fauchère, in Milford, Pa. The 16-room boutique hotel reopened this fall after a three-year, $8 million restoration. (Before this the hotel had been closed for 30 years.) Strub says he was totally booked for the first three weekends following the opening.

Strub, who is also president of the Pike County Visitor’s Bureau, says the county’s population has doubled in the 10 years he has been there, thanks mostly to people moving from New York. Many of them are former second-home owners who decided after the September 2001 terrorist attacks to make the Poconos their primary home, he says. “We’re in the process of getting discovered,” Strub said. “We’re kind of on a roll right now.”

The Wilkes-Barre, Scranton and Hazleton metro region, which includes most of the Poconos, has a population of 619,522. The market’s regional mall space is only about 2 percent vacant, but grocery-anchored centers are less in demand, with about 15 percent of the existing supply vacant, according to NAI Mertz Corp. of Pennsylvania, a locally based brokerage firm.

Uguccioni says the failure of some of the older Poconos resorts was not necessarily due to poor management or even sagging demand. “In some cases, the land is worth more than what’s on it,” he said. At least one old resort has recently been converted to senior housing, he says.

Real estate development generally is going strong in the Poconos. “The rise in market acceptance and quality of manufactured housing is driving trends towards development in rural resort areas,” said Anthony M. Graziano Jr., associate managing director of the New Jersey operations of Integra Realty Resources, a real estate valuation firm based in Toms River, N.J. “The second-home market over the past two-to-four years has been strong, and retiring boomers are planning their exit to areas where living expenses are reasonable and recreation is close.”

Graziano says small mountain towns are favored resort spots for Northeastern baby boomers, especially if the towns are within a few hours of the New York-New Jersey metro areas. “Catskill Mountain trends are very similar to Pocono Mountain demographics in terms of providing a rural setting,” he said.

“But it’s the low cost of construction aided by the quality of manufactured homes that is accelerating this development trend. Retailers are responding with big-box and freestanding retail products that are almost nonexistent in the market due to population density and general income demographics.”