Losses accelerate at Rocky Gap resort

Western Maryland project is $18.9 million in red, state report says

February 06, 2003|By June Arney and Bill Atkinson | June Arney and Bill Atkinson,SUN STAFF

Losses at Rocky Gap Lodge & Golf Resort, the sprawling state-owned retreat built to help revive Western Maryland's struggling economy, accelerated last year, pushing the four-year total to $18.9 million, according to a legislative report.

Rocky Gap lost $5.5 million in its fiscal year that ended June 30, 2002, compared with a $3.5 million loss the previous year, a report by the Department of Legislative Services says.

The document also reveals that Rocky Gap's liabilities outstripped its assets by $6.4 million at year-end, a sixfold increase from the prior year, while revenue fell 9.3 percent.

The analysis by Legislative Services is to be presented to lawmakers today at a House Appropriations Committee hearing in Annapolis.

Despite the mounting losses, Hans F. Mayer, executive director of the Maryland Economic Development Corp., a quasi-public agency that developed and financed Rocky Gap, said he is not worried.

"I think we're doing fine," he said yesterday. "We're moving ahead."

Mayer blamed the accelerating losses on the September 2001 terrorist attacks.

"That impacted everyone," Mayer said. "We believe with our new management and support of the bondholders, we'll be fine."

David D. Sanderson, Rocky Gap's director of sales and marketing, said there have been some bright spots at the resort.

Occupancy was up 11 percent in January over the same month last year, he said. He declined to provide occupancy numbers, but said the resort had better summer and fall seasons than it had the previous year.

"We're optimistic that we'll have a good year," Sanderson said.

About eight miles east of Cumberland, Rocky Gap opened in March 1998 after 16 years on the drawing board.

The $54 million state-backed project boasts a 220-room hotel, restaurant, conference center and 18-hole Jack Nicklaus signature golf course in the mountains of Western Maryland.

The project's main proponent was former House Speaker Casper R. Taylor Jr., an Allegany County Democrat, who saw it as an economic boon for his constituents. Supporters have said the golf course alone would lure people from around the world seeking a woodland retreat for business meetings.

The project is backed by $16.4 million in state funds and about $31.1 million in revenue bonds.

Today's hearing comes at a time when Rocky Gap is hoping to revive its business and bring in more tourists and meetings.

Mayer has said that an expansion might help, but has not provided details.

"We're looking to do something at the lodge," he said in a recent interview. "We're not prepared to talk about it."

He said any expansion would require the "approval and cooperation of the bondholders."

"The people involved are very much aware of where the project is and where we're going," Mayer said.

Cumberland Mayor Lee Fiedler said that the proposal that he has heard calls for increasing the size of the swimming pool and adding a conference room and spa.

"What they're finding is it was a mistake" to forgo those and other amenities, Fiedler said.

"It would allow them to fill the rooms year round and bring bigger groups. I think that anything that can help that operation be more successful would be very good for the community."

Fiedler says he is already seeing a turnaround at the resort since Barcelo Crestline Corp. of McLean, Va., took over as manager in April.

"There are more people visiting our city," he said.

"We see them downtown in restaurants. We see them at city hall. We see them coming in town and buying homes. We've had people retire and start businesses here."

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