MEDCO’s conference center hotels have a record of chronic losses – Rocky Gap & Chesapeake

They were both promoted with the promise of bringing new business, new jobs, and new revenues with boosters claiming they’d be ‘transformational’ of the local economy, a catalyst for the recovery of a depressed area… 

And what have they got? Chronic losses, new bail-out taxes, liquidations. And minimal positive ’impacts.’

Only raw political power could have pulled this off. $31m of state funds for a golf course resort in the Rocky Gap State Park in Allegany County. It was 1996 and then state House Speaker Casper R Taylor Jr brought home the ‘pork’

Consider:

1. Rocky Gap Lodge & Golf Resort in Rocky Gap State Park, near Cumberland Allegany County

Hotel 220 rooms, meeting space, 18 hole golf course

Opened April 1998, capital cost $54m, MEDCO state financing, sold in 2012 for $7m

Result: years of losses by MEDCO (Maryland Economic Development Corp), bankruptcy, sold at a huge loss, now a casino.

2. Chesapeake Bay Conference Center, part of a Hyatt Regency Hotel near Cambridge MD on the eastern shore just over the Bay Bridge

Opened 2002, has made losses ever since it opened

Defaulted on $3.72m senior debt principal repayment due Dec 1 2014… under forbearance agreements in 2014

as of mid 2015 liabilities exceed assets & deferred payments by $165m (net position)

op loss increased $2.63m in 2015

p5 2015

op rev $38.69m op exp $42.16m, op loss $3.48m, non-op exp $10.37m, decrease in net position $13.84m  net position end of year $165m  debt outstanding is $174.3m

http://www.medco-corp.com/PDF/auditedprojectfinancials/2015/CBCC-2015.pdf

2016.03.30

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