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Board of Public Works OKs slots deal for Rocky Gap

ANNAPOLIS — After years of delay stemming from a lack of interested and quality bidders, a group that will build a slots parlor at the debt-ridden Rocky Gap Lodge and Golf Resort was approved Wednesday by the Board of Public Works.

Evitts Resort LLC will build a 50,000-square-foot, 850-slot facility that could open by mid-2013 at Rocky Gap Lodge and Golf Resort.

Evitts Resort LLC will build a 50,000-square-foot, 850-slot facility that could open by mid-2013 at the remote lodge in Allegany County’s Rocky Gap State Park. The slots parlor will ultimately be expanded to 1,000 machines.

The board, comprised of Gov. Martin O’Malley, Comptroller Peter Franchot and Treasurer Nancy K. Kopp, had to approve the award because the facility will be built on state land at Rocky Gap State Park. The board’s vote was unanimous.

The state and numerous private investors are losing millions in the deal, which was only struck to try to turn what Franchot called “one of the biggest white elephants ever imposed” on state taxpayers into a money-making operation.

Among the state Department of Natural Resources, the Department of Business and Economic Development, Allegany County and the Maryland Economic Development Corp., more than $60 million in debt is being written off. Private investors, owed more than $34 million, will lose $26.6 million of that investment.

“The final outcome represents compromise,” said Donald C. Fry, chairman of the state’s Video Lottery Terminal Location Commission, which awarded Evitts a 15-year slots license in April.

As part of a ground lease, Evitts will pay the state Department of Natural Resources $150,000 in each of its first two years. The department will also get $1 per round of golf played on the property and $3 for each occupied room in the lodge. The two surcharges are expected to total more than $150,000 a year.

From years three to eight, DNR will continue to receive $150,000 annually, plus 0.9 percent of the gross operator share of slots revenue over $275,000. DNR will get a final annual payment of $187,063 in the ninth year of the lease. The department will continue to receive surcharge revenue and 0.9 percent of the operator’s gross slots revenue through the remainder of the lease, which stretches 40 years with a 20-year option.

MEDCO — the current leaseholder — will get $275,000 each year through lease years three to eight and a final payment of $237,936.

The facility is expected to employ 400 contractors during construction and 520 employees once open with a full complement of slots.