The Rocky Gap lesson

Rarely has a real estate closing felt so overdue.

With a unanimous 3-0 vote, the state Board of Public Works on Wednesday agreed to sell the Rocky Gap Lodge & Golf Resort to Evitts Resort LLC, taking one of Maryland's most star-crossed government-backed developments of all time off the hands of state taxpayers. Evitts officials in attendance seemed almost shocked by the palpable sense of relief that pervaded the State House.


If it's any comfort to the new owners, they're getting a great deal. In turning over the keys, the government (mostly the state) is writing off in the neighborhood of $55 million, and private investors are taking a $26 million hit. Evitts, in turn, is putting up less than $7 million in cash to buy a 220-room lodge and 18-hole Jack Nicklaus-designed golf course that originally cost $54 million to develop.

The transaction is made possible, of course, by the General Assembly's decision in 2007 to legalize slot machines at the facility that's located in a state-owned park along a 243-acre lake just outside Cumberland in Western Maryland. But even that wasn't quite enough, as lawmakers ultimately had to sweeten the deal by agreeing to lower the state's share of slot machine revenue from 67 percent to 50 percent to attract a qualified bidder.


Somehow the term "white elephant" doesn't seem adequate to describe the 14-year-old Rocky Gap project and its place in local history.

Gov.Martin O'Malleyand Maryland State Treasurer Nancy K. Kopp had little to say before the vote. Comptroller Peter Franchot, someone who usually rails against slots, called it the one occasion when he could support an expansion of gaming in Maryland. And while he noted the considerable losses involved, even Mr. Franchot failed to recognize the true cause of the project's failure — the state's unwillingness to recognize the realities of the marketplace.

Rocky Gap is a lesson not simply in wasteful spending but in hubris. It was built chiefly at the instigation of one man, Casper R. Taylor Jr., who served as speaker of the House of Delegates at the time and represented the district where Rocky Gap is located. Democrats went along with his vision despite the private sector's reluctance to invest in the project. After that initial decision to build, it was just a matter of keeping Rocky Gap alive as over the years the state deferred interest and lease payments and restructured the debt to keep the resort in business.

Mr. Taylor was able to do this not just because he was a powerful political figure but because of the serious economic challenges facing the region. Of all the things said about Rocky Gap during Wednesday's meeting, here was the most stinging: "well-intentioned." Those who voted for it thought they were doing the right thing for the poor and unemployed.

Rocky Gap may have created 200 jobs and perhaps even contributed to a more robust tourism trade in Western Maryland, but at what cost? Surely, it would have been cheaper to have simply handed out $10,000 checks to the first 200 takers in downtown Cumberland each year. Had they done so, they'd still have at least 15 more years of checks to dispense.

The site's relative isolation, the lack of complementary tourist attractions nearby, and its own modest amenities (at least when compared to The Greenbrier or Nemacolin Woodlands resorts) probably doomed it from the start. Whether slots will fundamentally change that circumstance remains to be seen — but at least it's a risk no longer underwritten by taxpayer dollars.

Signing over Rocky Gap was unquestionably the correct call despite the losses. It's even likely that in the not-too-distant future it will be seen as a significant moneymaker for all involved. When the full allocation of 1,000 slot machines are up and running, Rocky Gap is expected to employ 400 people and generate $21 million per year for the state (despite the lower tax). Evitts is investing tens of millions of dollars to build the adjacent casino and upgrade the facility.

But did Democrats in Annapolis learn any lessons from the exercise? If they did, it wasn't articulated at the board meeting. Certainly, the state can't send slot machines (or table games) to the rescue every time a lawmaker's favored project needs an economic boost. Yet legislators may be on the verge of doing just that if they move ahead with plans to approve a proposed casino at National Harbor inPrince George's County later this summer.


What should haunt Annapolis about Rocky Gap is not that mistakes were made, it's the likelihood that they will be made all over again.