Maryland rescues museum, resort

Sports Legend, Rocky Gap get rent break, bond payment from Board of Public Works

November 20, 2008|By Gadi Dechter | Gadi Dechter,

A struggling Baltimore sports museum and Western Maryland resort were put on taxpayer life-support by the Board of Public Works yesterday, over objections by Comptroller Peter Franchot that a state facing huge budget deficits can ill afford to subsidize money-losing projects.

The board's two other members - Treasurer Nancy K. Kopp and Lt. Gov. Anthony G. Brown, sitting in for Gov. Martin O'Malley - voted to allow the Maryland Stadium Authority to forgive $444,274 in unpaid rent by Sports Legends at Camden Yards and to slash the faltering museum's rent from more than $32,000 a month to about $10,000.

"If this vote goes the wrong way, the .... museum will go out of business," said Mike Gibbons, the nonprofit attraction's executive director, before the 2-to-1 vote. Gibbons said plummeting attendance at Orioles games had hurt visitor traffic, but that the new Hilton convention hotel is sending more tourists to the museum.

Franchot expressed doubt that the prominent museum next to Baltimore's baseball stadium was a "viable" project, particularly as consumer spending decreases during the economic downturn.

Kopp and Brown also approved a deal at the Rocky Gap Resort in Allegany County to pay a lump sum of $7 million to bondholders threatening to foreclose on the state-managed project because they have yet to see a dollar of principal on their $26 million 1996 loan returned. The sprawling hotel and golf course in a state park is the planned site of a slots casino that state officials are counting on to help Maryland balance its books.

Bob Brennan, who runs the state office that operates the resort, told the board that he needed $400,000 of a separate $1 million cash infusion that is part of the deal "to get us through the winter," when tourism ebbs in Western Maryland.

Franchot tried, without success, to persuade his fellow board members to delay a decision until next spring, when a gambling operator should be in place at Rocky Gap and perhaps a "better deal" can be struck with the bondholders. But Brennan said the investors, including a New York hedge fund, were "impatient" and that it was imperative that the arrangement be approved immediately.

Under the new deal, the bondholders give up their right to regular principal and interest payments; instead, they will be paid out of operating profits generated by the resort, said Maryland economic development secretary David W. Edgerley in an interview. That makes the resort "foreclosure-proof," Edgerley said, which could benefit the state in attracting a gambling company to the rural site.

Brennan said he hoped gambling-related money would allow the state to "fully extinguish" its liabilities to bondholders. He speculated that a slots operator may want to buy or lease the entire resort, but said after the meeting that he was unaware of any specific interest from developers or gaming companies.

This month, Maryland voters approved a constitutional amendment that allows a 1,500-machine slots parlor to be established at Rocky Gap, one of five proposed gambling sites across the state.

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