In 1996, Alan Gerry, a longtime Liberty, New York, resident and founder of Cablevision Industries, created a not-for-profit organization named the Gerry Foundation with the intent of revitalizing the economy of Sullivan County, which had faced severe hardships following the collapse of the Catskill's Borscht Belt tourism industry.

That same year, the Foundation purchased the original 37-acre (0.15 km2) Woodstock festival field and hundreds of acres surrounding it, with eventual plans for an arts center.

Planning for the arts center, designed by architectural firm DLR Group, began in 2002, and construction on the $150 million project started two years later.

Bethel Woods features a 7,500-square-foot (700 m2) main stage called The Pavilion, with 4,500 covered seats and a natural sloping lawn that can accommodate up to 10,500 people.

Opening the center helped revive tourism, which suffered in the region following the closure of many resorts following the decline of the Borscht Belt.

[5] The opening of the performing arts center in 2006, led to increased development in Bethel, along the Route 17B corridor, and in nearby Kauneonga Lake (formerly North White Lake),[7] and is one of the county's larger economic development programs, despite the initial controversy surrounding some of its funding.