Maryland, utility agree on lake purchase State to get first shot at buying Deep Creek

June 03, 1998|By Michael Dresser | Michael Dresser,SUN STAFF

The power company that owns Deep Creek Lake said yesterday it will give the state an exclusive shot at buying the Western Maryland tourist magnet -- if the Glendening administration and the utility can agree on a price.

Gov. Parris N. Glendening called the deal a "momentous first step" toward protecting the interests of property owners and other users of the man-made lake, which attracts an estimated half-million visitors a year.

The agreement was received enthusiastically by Western Maryland business leaders, who consider the lake the region's economic linchpin.

"It's the key breakthrough," said David Moe, president of the Garrett County Chamber of Commerce. "It couldn't have been done without doing it from the top -- the governor to the chairman of the board."

Under the agreement, GPU Inc. will negotiate with nobody but the state for the purchase of the lake. The state and the Morristown, N.J.-based utility set a goal of reaching a sales agreement by July 30 and setting a final price by Sept. 30.

Glendening announced the agreement at a State House news conference at which he was joined by Cabinet secretaries, corporate executives and Western Maryland legislators.

"This is truly a state asset. It is also a treasure from an economic perspective," Glendening said. The governor said that if the deal is completed, the state would maintain the current public access to the lake.

While the price is still not set, the state and the company have agreed to determine the fair market value of the unique asset -- 3,900 acres of lake and 600 acres of buffer land nestled in the mountains of Garrett County.

Advocates of the purchase expressed confidence that the agreement will result in a sale. "I think it's going to happen," said House Speaker Casper R. Taylor Jr., a Cumberland Democrat.

Western Maryland lawmakers, Garrett County business leaders and Deep Creek property owners reacted with alarm in March after GPU, which has owned the lake through subsidiaries since 1942, announced plans to sell off its Deep Creek hydroelectric plant and the lake along with about 50 other sites around the country.

Trend spurred decision

GPU said it would sell the properties as part of a strategic decision -- spurred by a national trend toward utility deregulation -- to leave the power generation business and concentrate on electricity distribution.

The GPU announcement created widespread concern that the lake would be sold to the highest bidder, possibly leading to higher docking fees, increased development pressure and restrictions on access.

Under yesterday's agreement, GPU will separate the sale of the lake from that of the hydroelectric plant.

Del. George C. Edwards, a Garrett County Republican, said the announcement of the prospective state purchase would come as a relief to his constituents. "Because it's a public entity, they can beat on the people involved in government," said Edwards, who was singled out by Glendening as an especially effective advocate of state intervention. With a private outside buyer, they wouldn't have had that assurance, Edwards said.

'A great morning'

The agreement was also applauded by Sen. John J. Hafer, a Republican who represents Allegany and Garrett counties, and by Taylor. "This is a great morning for the state of Maryland. It is a great morning for the leadership of Parris and the Glendening administration," the speaker said.

If the sale goes through as expected, it would resolve the confusing ownership status of the lake and its 65 miles of shoreline. At present, the state owns the water in the lake, but GPU owns the lake bed and the narrow buffer strip that rings the water.

In a March letter, Glendening urged GPU to separate the sale of Deep Creek from those of its other assets and to work with the state toward a "mutually beneficial agreement." The request came with a not-so-veiled threat to use litigation or legislation to tTC protect its interest in the lake.

The governor referred fleetingly to that possibility as he praised GPU at yesterday's news conference. "This could have become protracted and hostile and not to anyone's benefit," he said.

Fred Hafer, GPU's chairman and chief executive, called the pact a "classic win-win situation." "I was delighted to hear how easy it is to sell this man a lake," Hafer said, pointing to the governor.

Any final deal between the administration and the company would depend on its approval at several levels -- including the Board of Public Works, two General Assembly spending committees, the Garrett County commissioners and utility regulators in Maryland and Pennsylvania.

Pub Date: 6/03/98

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