Rocky Gap casino license awarded to Evitts Resort

ANNAPOLIS — Former Washington County lawmaker D. Bruce Poole, a member of the state slots commission, said black bears in Western Maryland turned gray while waiting on a license to be awarded for the construction of a slots casino at Rocky Gap Lodge & Golf Resort in Allegany County.

Though it took longer than some may have liked, the Video Lottery Terminal Location Commission awarded a license for an 850-machine facility at Rocky Gap Thursday, setting up the award’s consideration by the Board of Public Works for June.

Evitts Resort LLC would build a 50,000-square-foot facility that could open within 18 to 24 months of the board approving the license award. The board must approve the award because the facility would be built on state land at Rocky Gap State Park.

“This has taken far longer than we ever thought,” said Poole, who was nevertheless pleased to see the award made. The site, in play since 2008, struggled to attract bidders until the state reduced the tax rate on slots revenues at Rocky Gap to 50 percent for the first 10 years of operation. For other state casinos, the rate is 67 percent.

Evitts will spend $54.6 million buying the property, making improvements to the lodge and resort, and building the slots casino. Construction could generate 400 jobs, and 520 jobs could be created once the facility is open. Plans for a second phase, to be built during the facility’s second year of operation, would add another 150 slot machines.

The developer is putting up $20 million of its own money, but must borrow the rest. The award is contingent upon Evitts “promptly” securing that money, said Donald C. Fry, chairman of the slots commission. Fry, also president of the Greater Baltimore Committee, said he did not expect Evitts to have a problem getting a loan.

The facility is expected to generate about $40 million in gross revenues in its first year. The state’s cut would be about $20 million.

The commission had hoped to award the license in March, but two deals that were prerequisites for the contract award were not finished.

Negotiations were not completed between the developer and the Allegany County commissioners on a payment in lieu of taxes, or PILOT. The county cannot collect property tax on the resort property because it is state owned, but will get payment equivalent to those taxes from Evitts under the agreement.

A complicated land lease agreement also had to be worked out among Evitts, the Maryland Economic Development Corp., which owns the lodge, and the Maryland Department of Natural Resources, which owns Rocky Gap State Park, where the lodge is located. The Department of General Services also had to approve the land lease.

The parties agreed to a 40-year lease, plus a 20-year option that could be vested.

Lakes Maryland Development, the parent company of Evitts, agreed to buy out its business partner, Addy Entertainment LLC, in March. Lakes Maryland Development is owned by Minnetonka, Minn.-based Lakes Entertainment, which manages Red Hawk Casino in Northern California and has invested in casinos being developed in Cincinnati and Cleveland.

The Maryland State Lottery Agency’s background investigation, completed in March, found that Lakes had the financial resources necessary to qualify for a video lottery license, satisfying another requirement.

The only slots license yet to be awarded is for a facility in downtown Baltimore. A group led by Caesars Entertainment Corp. is the lone bidder for the license, which could be decided in June, Fry said. First, the lottery agency must complete its background check into Caesars and its local partners. The agency could submit its finding to the slots commission as early as next month.

A special legislative session could be called in August, where adding a sixth state slots license — in Prince George’s County — would be debated.