Published: July 29, 2008 09:42 am         

Potential slots at Rocky Gap lures business entities

Gaming license holder could purchase hotel; current situation ‘all very iffy’

CUMBERLAND — As advocates and opponents of slots in Maryland strengthen their respective positions over the next 100 days until election day, business propositions abound regarding the future operator of 1,500 slot machines at Rocky Gap State Park.

One idea is to have the gaming license holder purchase the hotel. It’s a possibility that’s both more than rumor and far less than a done deal, according to officials from the Maryland Economic Development Corp.

“The reality is since I’ve been at MEDCO the past four years, there have been numerous calls and inquiries from hospitality and industry groups, investors, all kinds of entities that have all expressed some type of interest in Rocky Gap,” said Bob Brennan, the organization’s executive director. “Nothing is for real. It’s all very iffy, and quite honestly, none of those things materialized.”

“I think with the prospects of the referendum being approved this year, there will certainly be another round of (inquiries) coming in and they will probably want to sit down and talk about how to gain use to the hotel facility,” Brennan said. “We’d be very interested in talking with them.”

Maryland voters on Nov. 4 will choose whether to approve or reject an amendment to the state Constitution that would allow up to 15,000 slot machines. Rocky Gap is the smallest, and by far the most isolated, of the five sites and would house up to 1,500 slot machines in a new $75 million slots parlor.

Rocky Gap is a bit more complicated, Brennan said, because approval of a gaming company to operate slots at Rocky Gap State Park “doesn’t necessarily give them rights to build within the park or, for that matter, within the land which we ground leased.”

The gaming company will need to have a deal in place with the state Department of Natural Resources, MEDCO — which means investors’ consent — and the Department of Business and Economic Development.

“It’s not a slam dunk,” Brennan said. “We have been contacted by a couple parties over the past year. I think once the referendum is over, those gaming companies will come out of the woodwork.”

Barb Buehl, president of the Allegany County Chamber of Commerce and a member of MEDCO’s board of directors, said she’s aware of a “discussion” regarding a potential hotel buyer at Rocky Gap involving two different operators. Buehl declined to name either company.

The conversation “questioned whether or not it would be possible,” Buehl said. “It would be easier if you had management of both (hotel and slots).”

The new owner, then, would oversee shared food services, shared parking and be in charge of room rates at the hotel, Buehl said.

“That’s what it’s been, an expressed interest,” Buehl said. “Whether it’s feasible or not, I don’t know.”

The current bondholders for Rocky Gap include several of the Calvert Group mutual funds in Bethesda and Davidson Kemper Investors. Their desire to restructure the resort’s debt does not impact a potential sale of the hotel, Brennan said.

Restructuring, he said, is an ongoing process and the possibility of a restructure is realistic whether or not the referendum passes.

For now, Brennan said it’s business as usual.

“We’re managing the hotel as if the referendum is not going to happen,” Brennan said. “We believe our primary mission is as it was when first given to us — to have Rocky Gap Lodge & Golf Resort as a tourism initiative, as an economic development project. It has worked out tremendously well.”

Contact Kevin Spradlin at kspradlin@times-news.com.