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Md. Gambling Could Mean Jackpot for Remote Resort

By Lisa Rein
Washington Post Staff Writer
Sunday, July 27, 2008

FLINTSTONE, Md. -- The road to Rocky Gap shoots across eastern Appalachia with eye-popping purpose, cutting deep through the mountains and riding high above the valleys. Three turns and 111 miles from the start of Interstate 270 in Rockville, crawling traffic has given way to an open highway, an emerald lake by a hotel and golf course -- and a region trying to spin its spectacular scenery into gold.

So far, it hasn't worked. Not with $20 million the state plunged over a decade into the money-losing Rocky Gap Lodge & Golf Resort. Not with an adventure sports complex, a scenic railroad and a host of other speculative attractions, all state-subsidized. Not with the sweat of dedicated public officials who are slowly reviving the onetime railroad town of Cumberland from the ruins of industry. The pull of a beach vacation in Ocean City is too strong, never mind the gridlock.

There is a rescue plan for Rocky Gap: slots. If voters approve a statewide referendum in November, the mountain resort aggressively marketed to young families would add 1,500 slot machines next door. The state parkland it occupies is the smallest of five sites, including two near racetracks, where Gov. Martin O'Malley (D) and the General Assembly envision legalizing as many as 15,000 machines. Rocky Gap is by far the most isolated.

Gambling in a state park beside paddleboaters and hikers -- this is not the image many visitors to Rocky Gap prefer to contemplate. "You would lose people like us if there were slot machines," Jeanette Strachan said in the hotel lobby one recent night after dinner, celebrating her 25th wedding anniversary. "To me it's almost like an encroachment."

The Strachans semi-retired from Derwood to Waynesboro, Pa., nine years ago. "I just have an impression of the kind of people that want to play slots," Gerry Strachan said. "We're not those people." The Sierra Club has come out in opposition, too, citing the potential despoiling of scenic parkland.

"I think you ruin the beauty of this place to do slots," said Roslyn Balch, sipping a beer by Lake Habeeb with her husband, John, after a kayak ride. The couple own a local pharmacy-supply business. "The resort is still in its infancy," John Balch said. "They need to ride it out." But he acknowledged that "the pressure is on politically" to vote for slots.

The prospect that a county with an average income of $25,728 could lure the spenders who have passed it by for so long is impossible for others to ignore.

"This place would be swarming," said Al Pettie, an electrical contractor from Anne Arundel County, finishing a round of golf on the Jack Nicklaus-designed course. Pettie, here for a meeting of his trade association, does not gamble, but his wife loves to play slots when they vacation in the Caribbean. "I'll vote for it," he said. "They might as well capitalize on the revenue."

Whether slots can save their region won't be up to residents of Allegany County, whose population of 73,400 will register a fraction of the statewide vote Nov. 4. As it is across Maryland, opinion here is sharply divided: Gambling is seen either as a moral scourge or a piggy bank that could buoy state services in a weak economy. With two state lines within 10 miles that cross into legal gambling territory in Pennsylvania and West Virginia, there's a heightened sensitivity here that gambling money should be spent on this side of the border.

"I can be at five different places within 20 minutes that have slot machines," said Cumberland Mayor Lee N. Fiedler, who retired as president of the local tire company, one of the area's biggest employers until the late 1980s. The Cumberland airport, just over the West Virginia line, has seven machines, and so does the convenience store across from City Hall in Ridgeley, W.Va. At 4 p.m. most weekdays, buses leave downtown Cumberland for the slots palaces of Charles Town, W.Va., and a racetrack south of Pittsburgh, arriving home at 2 a.m. The mayor concedes that his city of 20,700 probably has its share of problem gamblers. "But I would just as soon see them playing slots in a nice place."

Thousands of young people flee the panhandle every year, census figures show, to suburbs or cities that offer better jobs than Wal-Mart, the federal prison, McDonald's or the CSX locomotive repair shop do. The median home price around Cumberland has risen to $105,000 from $55,000 five years ago. But 5.7 percent of Allegany residents are unemployed.

Gambling advocates say a slots parlor represents a potential economic savior for Maryland's poorest region.

"When you look at our economy, you realize how desperately we need economic growth," said Casper R. Taylor Jr., a former House speaker from a tiny mountain town who pushed $60 million in public-private ventures through the legislature in the 1990s in hopes of luring prosperity to Appalachian Maryland.

Many credit his vision with putting Western Maryland on the map once Interstate 68, the region's only highway, was completed in 1991. He is now a lobbyist for the resort's bondholders.

The $51 million Rocky Gap resort operated in the red for years after it opened a decade ago and owes private investors more than $28 million. The Maryland Economic Development Corporation cannot make its $2.2 million in annual interest to bondholders, although state officials and bondholders are working toward a financial restructuring, said Robert C. Brennan, the agency's executive director. The hotel is on track to take in $12.5 million this year, which will cover operating expenses, but business is off by 15 percent this summer.

The 216-room, five-story hotel is part Adirondack lodge and part upscale resort, with simple, Shaker-style furniture and a spa offering $145 stone massages. The lakeside restaurant stocks $185 Merlots, but the staff roasts marshmallows on a campfire every night. Rooms start at $170 a night. A steady flow of weddings and conferences, from corporate retreats to knitting conventions, takes the edge off the leisure business, which comes up short during the week.

"People say, 'What's wrong with Rocky Gap?' " Brennan said. "I say, 'Have you ever been there?' We're an absolute bargain. How many traffic lights are there in Ocean City? There are 14 traffic lights in all of Garrett County."

General Manager Tim Grambley said the hotel's biggest marketing challenge is creating demand where none existed before. The place is advertised as an "adventure activity resort" that harnesses the area's rugged natural resources for skiing, kayaking, white-water rafting and mountain biking. Although the state park stretches over 250 acres, Grambley said it makes the most sense to put slots on what is now a driving range next to the lodge, for easy access.

He returned to Rocky Gap last year, after seven months managing a hotel project at a casino in Blackhawk, Colo. "It wasn't my cup of tea," he said. Slots here would be different, he said, because the lodge would not run the gambling operation.

But that might not be the case. Barbara Buell, a transplant from Howard County who runs the local Chamber of Commerce, said some potential slots operators have expressed interest in buying the hotel from the state to make the investment viable.

For local leaders, gambling was always in the plan for Rocky Gap. It was just a question of when. "They'll lead to other things," Taylor said of the millions of dollars in slots proceeds the county would receive. The amphitheater he commissioned on the hotel property, now virtually empty, could be a draw for a bluegrass festival with big-name artists that the county can't afford to book right now.

Said Fiedler: "It could be a very, very nice resort that also had gambling."

This report is the first in a series on the five potential locations for slot machine gambling in Maryland.

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