HAGERSTOWN, Md. (AP) — Maryland’s Board of Public Works meets Wednesday to consider a deal enabling a casino operator to buy the long-struggling Rocky Gap Lodge and Golf Resort near Cumberland and turn it into a magnet for gamblers.
The panel consisting of Gov. Martin O’Malley, Treasurer Nancy Kopp and Comptroller Peter Franchot will discuss the matter during a meeting in Annapolis, according to the meeting agenda.
Evitts Resort LLC, a unit of Lakes Entertainment Inc. of Minnetonka, Minn., must buy the western Maryland resort as a condition of a license it was awarded by the state in April to operate up to 1,000 slot machines there. The resort inside Rocky Gap State Park is one of five approved Maryland casino sites, of which three are operating. The resort is owned by the Maryland Economic Development Corp.
MEDCO Executive Director Robert Brennan said Tuesday that adding a casino will create hundreds of jobs and help turn the resort into a more stable anchor for economic growth in the state’s mountainous western panhandle.
“I think it’s going to be a real asset not only to the state but to Allegany County and the region,” Brennan said.
The Department of Natural Resources is asking the board to approve a purchase agreement that includes a nearly $6.8 million payment by Evitts. MEDCO would pay into the same escrow account a total of $3 million, half of which MEDCO would recover over time from interest on Evitts’ payments on a ground lease.
Evitts would assume MEDCO’s ground lease on 260 park acres. Evitts would pay MEDCO and the Department of Natural Resources more than $16.5 million over the 40-year lease term.
Brennan said private bondholders whose investments helped finance the state-subsidized resort’s construction will likely receive $7.7 million to $7.8 million — about a quarter of what they are owed. He said they have agreed to write off just over $26 million.
Evitts has proposed investing $54.6 million to buy the resort and build a 50,000-square-foot slots parlor. The casino is expected to open in mid-2013 with 850 slot machines initially, expanding to 1,000 in the second year.
The resort is expected to have 520 employees when fully operational compared with current employment ranging from just over 100 in the winter to about 400 in the summer, Brennan said.
The resort features a 215-room hotel and a Jack Nicklaus Signature 18-hole golf course. It has never met its planners’ expectations as an economic development engine. It incurred an operating loss of $4.3 million in the fiscal year ending June 30, 2011, according to MEDCO’s latest report to the General Assembly.
