Western Md. bets its future on Rocky Gap Resort: Allegany County hopes a lakeside lodge and golf course will make the area a tourist destination.

March 22, 1998|By Peter Jensen and Debbie M. Price | Peter Jensen and Debbie M. Price,SUN STAFF

CUMBERLAND -- After more than 16 years on the drawing board, a decade of financing struggles, and two years of construction, one of the most daring attempts to revive Western Maryland's flagging economy is finally ready to be launched.

On Tuesday morning, Rocky Gap Lodge & Golf Resort, the $54 million government-backed hotel, restaurant, conference center, and Jack Nicklaus signature golf course resort about eight miles east of Cumberland, will quietly begin accepting overnight guests on a limited basis.

For the project's supporters, it will surely be a moment of triumph. Since its inception, the hotel has risen from its grave more often than Lazarus, derided by opponents as wasteful pork barrel and scorned by the numerous private investors who doubted its potential for profits.

But even as workers finish the 220-room rustic lakeside lodge and continue building an 18-hole public golf course that won't be completed until fall, the uncertainties remain: Is this destined to be a key part of Western Maryland's economic salvation or its embarrassing white elephant?

"Rocky Gap will redefine what Western Maryland is all about," said House Speaker Casper R. Taylor Jr., an Allegany County Democrat and the project's biggest supporter. "I'm confident of its success."

That confidence was not initially shared by Maryland's investment community, and the project's search for financial backers became a thing of legend in Annapolis. After numerous rejections from banks and financiers, the project's supporters turned to the private, nonprofit Maryland Economic Development Corp., known as MEDCO, which was created so the state could develop property in economically distressed areas.

After years of attempts to lure more substantial private support, MEDCO put together a complex private-public financing package that relied not only on taxpayer contributions, but quite heavily on high-risk, high-interest-rate bonds.

The result: Rocky Gap has become a high-stakes gamble. Book enough rooms and attract enough golfers, and all will be well. Fail to do that and millions of dollars in public investment could be placed in jeopardy.

"Will it succeed? I have a tough time with that question," said Sen. John J. Hafer, a Republican who represents Garrett and Allegany counties. "When you have so much trouble finding funding, you have to wonder why so many people don't see this as a great idea."

Woodland retreat

Supporters believe a golf course designed by Nicklaus, one of the most popular golfers of all time, will lure a national, if not international, clientele looking for a quiet, woodland retreat for business meetings.

"This hotel is first class from what I've seen," said Lee Schwartz, owner of a Cumberland newsstand who has been tapped to run the hotel's gift shop. "I think they'll create the kind of experience people will drive two to three hours for."

At stake are the estimated 250 jobs the complex is supposed to create and the millions of dollars more in spending it is supposed to add to the local economy -- from fertilizer for the golf course to light bulbs for the hallways.

In Allegany, a county of 75,000 that lost hundreds of factory jobs in the 1980s and is still suffering with double-digit unemployment rates and wages 25 percent below the state average, jobs are precious.

More than 1,100 people showed up at a two-day Rocky Gap job fair held late last month to fill 150 jobs, nearly twice the number organizers had expected.

So far, about one-quarter of the lodge's rooms have been reserved for its first year, half what the hotel eventually expects to book. The hotel's management says it is comfortable with the public's response so far.

"The sales efforts are beyond our projections," said Thomas A. Ruhs, Rocky Gap's general manager and vice president of Buena Vista Hospitality Group, the company hired to run the resort. "We're very pleased."

Ruhs said he is confident that Rocky Gap can find its niche market: corporate groups and golfers from Baltimore, Pittsburgh, Washington and Morgantown, W. Va., all within a 2 1/2 -hour drive. He described the lodge as Western Maryland's first four-star hotel, a "destination resort" that will draw people to the region for the first time.

Sizable debt

The resort's most obvious obstacle has been the delays in golf course construction. The culprit: Mother Nature.

Rains that have carved mud sluices into the golf course's hilly terrain have postponed the opening of the back nine holes until July and the front course until September, and helped put the project about $900,000 or 3 percent over budget.

Still, hovering over the project is the matter of its sizable debt. By MEDCO's own projections, the hotel and golf course can't generate enough revenue to fully repay bondholders until at least 2004. Until then, it will rely on reserve funds to supplement income from the hotel to pay the debt service.

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