By Michael Dresser, The Baltimore Sun
12:50 PM EDT, September 19, 2012
Comptroller Peter Franchot on Wednesday denounced a revised deal that allowed the company licensed to operate a casino at the Rocky Gap resort in Allegany County to reduce the scale of the project as a "complete bait and switch" on the part of the company.
Franchot had questioned why the modified deal, which cut the number of slot machines at the resort from 850 to 500, did not have to be brought back to the Board of Public Works for approval.
"Don't you get the sense we're being played for fools here?" said Franchot, addressing his question to an assistant attorney general who said a new vote was not needed.
The board had approved the original plan by Evitts Resorts to build a gambling hall with the 850 slots when it voted on a ground lease agreement with the company in June. However, six weeks later Evitts came to the state commission that chooses sites for slot machines and reported it was unable to borrow the construction money to carry out that plan. It proposed instead the 500-slot plan, with the machines to be located in already existing conference space at the resort for the next three years. The commission approved the change, which let Evitts close on the acquisition of the money-losing lodge from the quasi-public Maryland Economic Development Corp.
Franchot questioned why the commission allowed Evitts to radically change the proposal just six weeks after giving the board a glowing assessment of the casino's prospects. He suggested the panel should have rejected the revision to "preserve the integrity" of the process.
"This is what I view as an abandonment of the original proposal," he said. "The vendor isn't delivering the product they promised us -- the people of the state."
The comptroller charged that company officials should have reported when they presented the original deal to the board that they were meeting resistance in the capital markets.
"They had to know when they were talking to us that they were going to have this situation," he said.
Franchot noted that the revision meant fewer construction jobs, fewer permanent jobs and "the demise of a very nice conference center."
Evitts' revision put the state in a bind because it was counting on the closing of the deal on Rocky Gap to let it get the heavily subsidized Rocky Gap, which never met the expectation set for it in the 1990s, to take it off its hands.
Franchot acknowledged the dilemma, noting that he voted for the original deal to get a "hulking white elephant" off the state's hands. The comptroller, an opponent of casino gambling, routinely votes against such contracts.
Treasurer Nancy K. Kopp noted that the law requires Evitts to replace the conference space it will use for the slot machines within 36 months or to risk losing its license. But Franchot questioned the value of that guarantee.
"What are the chances that that situation is still around three years from now?" he said.
According to Maryland Lottery director Steve Martino, the scaled-back Rocky Gap slots parlor is expected to open about Memorial Day next year. Whether it can also offer table games depends on the result of a November ballot referendum on gambling expansion. Before it offers table games, Evitts would also have to certify that it has plans in place to replace the lost conference space.
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