A plan to rescue the chronically snake-bit resort at Rocky Gap by permitting slot machines there has hit yet another setback.
A state commission granted a request Tuesday from the company that was granted a license to operate a Rocky gap casino to scale back its plans by more than one-third after failing to line up a lender for a more ambitious project at the Western Maryland resort.
In April, after years of seeking a qualified bidder, the commission awarded a license to Evitts Resort LLC to operate a casino with 850 slots at Rocky Gap, a golf resort and convention center outsize Cumberland that has cost the state tens of millions of dollars since it opened in the 1990s.
But on Tuesday, just days before Evitts is scheduled to close its deal to acquire Rocky Gap from the Maryland Economic Development Corp. (MEDCO), a top executive of Evitts’ parent company told the commission that Evitts had been unable to raise the third-party financing it has expected to use to build a $62 million casino and hotel complex as an addition to the existing lodge.
Tim Cope, chief financial officer of Lakes Entertainment of Minnetonka, Minn., told the panel that Evitts had tried for months to find a lender.
“Financial markets are tough,” he said. “As a startup casino in a somewhat rural area, there is some doubt whether there are enough people up there to support the bigger project.”
Cope asked the panel to let it move forward with a 500-slot casino using the existing meeting space at the resort. He said Evitts would pay for the costs of renovation, which he estimated in the “high 20 millions,” out of its own checkbook. He said the plan would let Evitts begin taking bets in the second quarter of 2013 – about a year earlier that the casino would have opened under the more ambitious plan.
The commission approved the request unanimously.
Evitts expects to replace the lost meeting space within 36 months, Cope said. Cope said the company hopes that once business starts up it will be able to put its original plans for 850 or more machines back on track.
The scaling-back of the number of slots and the overall investment will mean more modest job growth than originally anticipated, Cope said. He said he still expects the creation of a casino within the existing space to create 100 new jobs. That is about half as many as projected under the original plan, he said.
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