Debating the cost of fun in O.C.

Jeff Mushrush thinks the notion of cover charges at Ocean City nightclubs represents nothing but "greed."

"There are some places here where you have to pay a cover charge to eat," said Mushrush, general manager of B.J.'s on the Water-North. B.J.'s doesn't impose cover charges, he said.

But Duane Bell, assistant manager of Fager's Island, said cover charges offset rising entertainment costs at his club, as establishments compete to attract customers.

"A lot of challenge is involved in running a business in a resort town," Bell said. "This can be a tough town. In the end, it's probably what you're used to."

And Roger Rosenblit won't discuss what he does at his club, The Party Block, except to say that customers don't pay cover charges before 10 p.m.

Cover charges long have been commonplace in nightclubs -- and Ocean City is no exception. But the fees are creeping as high as $20 per person in some establishments, causing some differences among club owners and complaints from patrons.

Still, some owners plan to impose such top-dollar rates during the Eastern Shore's last big holiday weekend, Labor Day.

"We go from $5 at 5 [p.m.] up to $15 on some occasions," said Rico Rossi, general manager at Seacrets Nite Club. The highest cover charge at Seacrets will be $15 this weekend.

"Most of our money is made in 120 days," Rossi said. Seacrets is open year-round; its outside areas are closed in October. "Of course, we impose a cover charge, but our customers leave here feeling they've had a good time."

From May to September, Ocean City becomes one of Maryland's largest cities, when its population swells from 7,500 to a peak of more than 325,000. Many of the vacationers come from Baltimore, Washington, New York and other metropolitan areas. The resort's three-mile Boardwalk will be spotlighted on The Travel Channel next spring as one of the five best in the United States.

Income from Ocean City's tourism is about $2 billion per year, according to city officials. Summer tourists brought in at least $1 billion last year, said the city's finance office. Vacationers contributed $6.8 million in hotel room tax revenue alone during the summer months. Total sales and use taxes for Worcester County, where Ocean City is located, brought in $20.5 million from June to August.

"That's about our only source of income," said Donna Abbott, the town's media services director.

Proceeds from nightclub cover charges are taxed as part of Ocean City's three percent amusement tax, said Martha Bennett, the city's chief financial officer. The tax also includes proceeds from movies and amusement rides, as well as from golf and boat rentals.

"Every business has one or doesn't have one according to the business' own plan," Bennett, a longtime Ocean City resident, said of cover charges. "They have existed here for as long as I can remember."

Fees are set by owners, and cover charges are the norm in outlets with entertainment. "Some establishments cater to an older crowd," Bennett added, noting that at places without cover charges, drinks can cost more.

"I've lived here for more than 20 years," Abbott said. "They've always imposed cover charges."

Prices to get into the clubs in the 10-mile stretch from the Ocean City inlet north to the Delaware line have risen, Abbott conceded, but so have hotel and condominium rates.

"Entertainment certainly has become more expensive," Abbott said. "I can remember getting into some big concerts for $10. I know they're charging more than that now."

So in lies the rationale for higher charges, club owners say. The increasingly competitive nature of doing business in Ocean City has necessitated widespread improvements, they said.

At Seacrets, Rossi has added a spring-loaded steel dance floor and a new sound system to its main nightclub, Marley Hall. In addition, 14 digital projection screens are scattered throughout the property. The club also has metal detectors for security and a backup generator in case of a power outage.

Seacrets also expects to spend about $1 million on entertainment this year, he said.

At Fager's Island, Bell said he just renovated to the tune of $1million, including a new lighting system. The cover charge starts at $5 and rises according to entertainment expenses.

He said his entertainment budget has tripled in the past five years -- in part because of the competitive nature of bands and production expenses, which include the costs of acoustics, lighting and staging. The nightclub is open year-round.

Bell, who said most of his business is done between May and September, has not decided how much to charge over Labor Day. He will be charging more than he regularly does. "That's because we're having No Pets for Noah, a very popular band we've been having for more than eight years."

He said Fager's waives its cover charges for customers of its associated hotels, the Lighthouse Club Hotel and The Edge, as well as for many local regulars and patrons of the nightclub's restaurant.

But at B.J.'s, a different perspective prevails.

"B.J.'s primarily is a restaurant with live entertainment as a complement to the food and atmosphere," Mushrush said. The year-round establishment only offers entertainment during the tourism season -- and doesn't book large bands or offer high-tech dance floors.

B.J.'s has no special plans for the holiday weekend, Mushrush said.

Bell attributed some of the divergence on the issue to the principle of relativity. He said that some patrons have complained about rising cover charges, but he pointed out that such fees are not as high as in other cities.

"I just got back from Vegas," Bell said. "I paid a $20 cover in a place where I also was a hotel guest and restaurant patron. That's not happening here."

In Virginia Beach, cover charges generally are imposed as "admission fees," said Fran Janezeck of the city revenue commissioner's office. Revenues are taxed at 10 percent, and the fees are tied to entertainment, she said. City officials do not have an estimate of how much nightclubs charge for patrons to enter their establishments.

Janezeck pointed out that, unlike Ocean City, Virginia Beach does not have a very active nightclub scene. "We're only 31 blocks," she said and added that Virginia Beach is smaller than Ocean City.

If Ocean City nightclub patrons are complaining, they are not doing so beyond club managers, said Veronica Kahn of the Ocean City Hotel, Motel and Restaurant Association. The organization has received no complaints, Kahn said, adding that she was unaware of a dropoff in business because of rising cover charges.

"We're more affected by weather than anything else," said Abbott. She added that until last week, the season has been cool and rainy.

"There are plenty of options here," she added. "People can choose from among a wide variety of ways to be entertained."

At least two of Seacrets' patrons agreed.

"Gasoline prices have gone up a lot this summer," said a Salisbury University student off from work at another Ocean City restaurant. She declined to give her name. "Look around. People still are coming here in droves.

"I'm OK with the cover charges here because you get what you pay for," the student said. "This place is awesome."

A man vacationing from outside Charleston, W.Va., said: "Cover charges are part of the scene down here. If you don't want to pay them, no one's forcing you to come in."

Recommended on Baltimore Sun