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June 13, 2011

Slots commission readies Rocky Gap bid

The state slots commission is ready to issue a new request for proposals to develop a casino at Rocky Gap resort in Western Maryland. The panel also approved slight changes to the bid for a far larger project in Baltimore.

Rocky Gap and Baltimore are the last of the five slots licenses available in Maryland, and state officials have had a tough time attracting qualified bidders to either project -- Rocky Gap because of its remote location in Allegany County and Baltimore because of its higher financial requirements.  

At a meeting today in Annapolis, the Video Lottery Facility Location Commission determined that the Rocky Gap RFP could go out by the end of next week. It will be the state's third attempt to lure a developer to the money-losing state-owned property and will reflect the General Assembly's attempt to sweeten the deal by lowering the tax rate from 67 percent to 50 percent.

Proposals would be due in mid- to late-September, said Donald C. Fry, chairman of the slots commission. The panel also approved technical changes to a request for proposals on the Baltimore site.

Fry said he will work with city officials to clarify that would-be developers can count the fee to lease the city-owned land near the stadiums toward the state-mandated capital improvement, and that applicants' $22.5 million initial licensing fee may be refunded if the slots panel rejects the bid.

The RFP tweaks also will clear up confusion about zoning and minority business participation, Fry said.

Proposals for the Baltimore project -- which, at 3,750 slot machines would be the second-largest in the state -- are due July 28.

Fry said he believes both remaining licenses will attract multiple applicants. Robert Howells, procurement officer for the Maryland Lottery, said he is "optimistic" that Baltimore will see a good response to its RFP and said applicants were "well on track" to meet the deadline, though the city is just beginning this week to meet with individual parties interested in the site.

Potential applicants have expressed skepticism about financial viability of the project. license holder would turn over 67 percent of slots revenue to the state and more than $8 million per year to the city.

The slots developer also would pay the $22.5 million licensing fee and foot the bill for any environmental cleanup at the casino site.

"It makes the project incredibly difficult," said William Kress, a lobbyist for Clairvest, a Canadian private equity group weighing a bid. "The tax rate and other financial obligations are so high that there's not a great deal of room for error."

He said his clients are interested because "the gaming market is under-served in Baltimore."

Other potential applicants include a group led by local attorney Hassan Murphy, who said at a pre-bid conference last month that the Baltimore proposal "presents some interesting challenges."

Also attending the conference were representatives from Florida-based Peebles Corporation and from Caesars Entertainment in Las Vegas. Here's the full sign-in sheet.

Western Maryland officials also are hopeful about the project there. Dallas-based Paragon Project Resources is among several firms that have considered applying.

Groups that have long expressed interest "are coming back much more seriously" now that the tax rate has been lowered, said Robert C. Brennan, executive director of the Maryland Economic Development Corp., which oversees operations at Rocky Gap.

Posted by Julie Bykowicz at 7:05 PM | | Comments (1)
Categories: Slots
        

Comments

There is a reason nobody is rushing in to do the projects. Tax down from 67% to now 50%..........Nevada is 6.75%. Reduce to the same rates as horse racing tracks.

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About the bloggers
Annie Linskey covers state politics and government for The Baltimore Sun. Previously, as a City Hall reporter, she wrote about the corruption trial of Mayor Sheila Dixon and kept a close eye on city spending. Originally from Connecticut, Annie has also lived in Phnom Penh, Cambodia, where she reported on war crimes tribunals and landmines. She lives in Canton.

John Fritze has covered politics and government at the local, state and federal levels for more than a decade and is now The Baltimore Sun’s Washington correspondent. He previously wrote about Congress for USA TODAY, where he led coverage of the health care overhaul debate and the 2010 election. A native of Albany, N.Y., he currently lives in Montgomery County.

Julie Scharper covers City Hall and Baltimore politics. A native of Baltimore County, she graduated from The Johns Hopkins University in 2001 and spent two years teaching in Honduras before joining The Baltimore Sun. She has followed the Amish community of Nickel Mines, Pa., in the year after a schoolhouse massacre, reported on courts and crime in Anne Arundel County, and chronicled the unique personalities and places of Baltimore City and its surrounding counties.
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