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Reinventing the Catskills

New investors trying to rebuild resort industry

Rich Newman
Staff Writer

MONTICELLO--Songcha Gallo, the Korean-born wife of Long Island surgeon Victor Gallo, huddled inside a red overcoat as she led a tour of the 355-room resort she's renovating on Sullivan County's Swan Lake. The lobby, nearly finished, boasts a series of crystal chandeliers the size of four-door Hyundais. The centerpiece is a five-ton dragon boat sculpture of hand-carved jade from China. Price tag: $135,000. Boarded up for six years with a badly leaking roof, the former Stevensville Hotel, which will be renamed the Swan Lake Resort Hotel, was in rough shape.

In the banquet hall, "the mold was this thick," Mrs. Gallo said, holding her hands several inches apart. The main kitchen where the roof had collapsed has been completely rebuilt. Last week a worker was acid washing spray-painted graffiti from walls of the indoor swimming pool.

The Gallos say they've sunk $1.7 million of their own money into the property and they've applied for a $4.5 million mortgage to finish the job.

"I am not a rich woman," said Mrs. Gallo, almost apologetically.

They recently bought most of the nearly new furniture from the Pines Hotel in South Fallsburg, which failed despite a $5 million renovation two years ago. They bought furniture for 170 hotel rooms and convention seating for 4,000.

The Gallos are among the new investors in the changing Catskill resort industry. Once world-renowned as a luxurious getaway for Jewish vacationers from New York City, the region is slowly transforming into a more multi-cultural vacation spot. While the resorts are not abandoning their kosher clientele, many are reaching for new niches in the competitive resort and travel industry.

The new investors are hoping to recapture the allure of the "place in the country" where Eddie Fisher and Buddy Hackett once shared a stage at the Tamarack Lodge, where Muhammad Ali trained for legendary bouts with Joe Frazier at the Concord and where Lou Goldstein led thousands in wacky rounds of "Simon Sez" at Grossinger's.

But the changes are coming after some painful losses. The so-called "Borscht Belt" landmarks like the Browns, Grossinger's, and The Pines are closed, perhaps for good. And now the biggest of them all, the 1,100-room Concord, will be sold at auction to pay off more than $20 million in debt. Nevertheless, millions of dollars are being poured into other resorts by developers hoping to cash in on the area's natural beauty and proximity to New York City.

Finding a Niche

The Nevele Grande near the Ulster County village of Ellenville is in the middle of a $10 million renovation. Since last year the Nevele has been largely owned by Liberty Travel which is promoting the resort by giving away free stays to its cruise ship vacationers.

The former Granit Resort in Kerhonkson has also been undergoing a major facelift in recent years and has changed its name to the Hudson Valley Resort.

"Historically, when you look at the trend over the past 100 years or so (the Catskill hotel industry) has never been lower," said Jennifer Brylinski, executive director of the Sullivan County Industrial Development Agency. "It's nice to see that some have been trying to make a comeback." Even with the major kosher resorts closed or struggling to reach a broader market, Sullivan County's hotels and motels remain the largest private sector employer.

In 1997, 1,737 people were employed in its hotels and motels, a number virtually unchanged from 1996. According to the state Department of Labor, only elementary and secondary schools, combined, provided more jobs. Sales tax revenues from hotels and motels in Sullivan County in March through August were up slightly this year to $35.2 million from $34.9 million.

The Villa Roma, out by the Delaware River in Callicoon, though not a traditional Borscht Belt resort, has continued to thrive. "It is an excellent example of a resort that has changed with the times," said Sullivan County Manager Jon Drapkin. People said they wanted larger rooms, so the hotel has been refurbishing them on an ongoing basis, making two rooms for every three. The Villa Roma has also added time-share apartments and condominiums to its mix.

"The conversion of The Browns resort by a condominium developer several years ago has also been a success," said Drapkin. About three-quarters of the 375 rooms have sold over the past three years. The majority of the buyers have been "snow birds" who live in Florida during the winter and vacationers from Canada.

Meanwhile the family-owned Concord, the Raleigh and Kutsher's are seen as the last of an old breed, fighting among themselves for business from convention groups and mid-week senior bus groups by offering deep discounts.

Woodstock and I-86

Looking to the future, Drapkin said much hope is placed on a potential new attraction. Time Warner executive and Sullivan County native Alan Gerry recently purchased the site of the historic Woodstock Music and Arts Fair and 2,000 surrounding acres with plans to create some sort of vast musical theme park attraction. An experimental rock and roll revival concert held there this summer was a logistical if not a financial success, according to concert officials.

In addition, Drapkin said construction of a "gateway" visitors center is planned on Route 17 in the Town of Mamakating. The change this year of Route 17 to Interstate 86 is expected to be a plus for the tourism industry, making the road more recognizable on the map to out of state travelers. But most of the changes to the Catskill resorts are not being made with a blind eye to their histories.

In fact, one tourism official thinks the future of the Concord could be much like its past. Michael Davidson, director of the Sullivan County Visitors Association says if enough money is invested in renovation, the Concord has strong potential as a modern, large convention center with 600 to 1,000 hotel rooms.

The meetings and convention market is a $1.2 billion market in New York state, he said, and "there is no hotel outside of New York City with that many rooms."

And the Gallos, while looking to bring some Oriental flavor to the Catskills, are not overlooking the importance of the traditional Jewish clientele. Along with a Japanese/Korean barbecue restaurant overlooking the lake, with a sushi bar and grills at every table, another dining room will be kosher, serving up pickled herring, chopped liver and beef brisket.

When's the grand opening?

"Passover," said Mrs. Gallo.