ROCKY GAP — The owners of Rocky Gap Lodge & Golf Resort will finance a portion of the conversion of the property into a casino by using the property, furniture and fixtures of the property itself as collateral. Additional collateral for a $17.5 million credit line will be a second mortgage on Lakes Entertainment’s real property located in Minnetonka, Minn.
Evitts Resort LLC, which now owns the lodge and resort, is a subsidiary of Lakes. The lodge and resort are located in Rocky Gap State Park.
The deal with Centennial Bank was closed in mid-December.
The loan will finance part of the conversion of existing convention space into a gaming facility, provide replacement meeting room space and refurbish the hotel lobby and guest rooms, a press release and Securities and Exchange Commission filing said.
Draws on the credit line will be charged an interest rate of 10.5 percent a year, documents indicated.
“Completing this financing allows us flexibility with the remaining cash on our balance sheet to look for other opportunities that will enhance shareholder value. We look forward to opening the new gaming facility in the second quarter of 2013, with the new meeting space to be completed soon after,” said Tim Cope, president and CFO of Lakes.
Ivan Lanier of Greenwill Consulting Group, which represents Evitts in Maryland, recently said the configuration of the gaming rooms would include more space for table games along with slot machines, now that Maryland voters have approved table games.
The current plan at Rocky Gap calls for renovation of the facilities to convert 20,000 square feet of convention and meeting space into a slots parlor with a minimum of 500 video lottery terminals, a bar and a food outlet, company officials have said.
The total cost of the Rocky Gap acquisition and development project is expected to be between $25 million and $30 million.
The purchase price was about $6.8 million and Evitts signed a lease for 260 acres for 40 years with the Maryland Department of Natural Resources, according to company filings with the SEC.
Contact Matthew Bieniek at firstname.lastname@example.org.