Council Hears Casino Expansion Update

Council Hears

SNOW HILL — At this month’s Local Development Council (LDC) meeting on Monday, the group was given an update on Maryland’s VOLT Fund loan program, a pending expansion to the Casino at Ocean Downs property, an increase in state gaming revenue and the status of annual impact grant funding reports, among other items.

Casino Expansion
During his update to the LDC, Ocean Downs General Manager Joe Cavilla confirmed that table games will be added during the upcoming casino expansion.
“It will allow us to add table games, which will be in the first phase of it. The exact amount of table games will probably be a small offering,” he said.
One of the biggest hurdles with table games is finding sufficient staffing, continued Cavilla. He also clarified reports of the size of the building. While the casino received approval of a site plan listing the addition at 52,879 square feet, the actual dimensions of the building are closer to 35,000 square feet.
John Salm of J.W. Salm Engineering elaborated on the point and explained while the building will technically be about 53,000 square feet, its “footprint” will only be around 35,000, as there will be an internal mezzanine.
Cavilla also touched on the status of a proposed bowling alley and movie theatre that had been in the works at Ocean Downs for more than a year. Though he couldn’t report any certainties, Cavilla predicted that the addition that will contain table games, slots and a small restaurant will take precedence over the bowling alley and theatre.
“I don’t have any new information on that, unfortunately. I would think that the expansion that is being talked about in this article would take priority over that,” he said, referencing a recent media report. “It affects the revenue that would be generated for the state as well as us so any efforts for construction will probably go in that direction.”

Loan Program Update
The LDC first met with Worcester County Economic Development Deputy Director Merry Mears for an update on the county’s involvement with the recent Small and Minority Business Grant program. Worcester has partnered with Anne Arundel County to become one of a handful of fund managers for the program across Maryland. The fund officially began in May.
“We were awarded about $4.3 million together and we have been busy ever since,” Mears told the LDC.
So far two loans have been distributed. The first was for approximately $63,000 earlier this summer to the Kite Loft in Ocean City to help them retrofit their newest location in the Town Center complex on 67th Street. The most recent loan was confirmed just this month to Plakthat, a start-up wood printing business that used its $89,000 loan to purchase a large printer.
“He didn’t have control of the quality of his work,” Mears said of Plakthat owner Wyatt Harrison’s need for a quality printer. “He didn’t know when it would be done.”
Both loans are proving useful to the recipients, she continued, and the interest rates are some of the best available for any business.
“The interest rate is 2.5 to 5 percent, which is very attractive. It is better than any bank loan out there,” Mears said. “We’ve had a little bit of flak from some banks because we are so competitive but we’re not in competition. We are working with anyone we can.”
Loans can be anywhere from $25,000 to $500,000 for small businesses, and Mears said that the county has already received 25 or 30 phone calls expressing interest. The program is set to continue for several more years, and Mears expects a steady turnover with new loans.
“It’s the state’s intention to continue this loan program for the next four years so we look forward to receiving some more funds in the coming years,” she said. “We’re hoping that does happen. It was mentioned when it was first awarded that it would be a five-year program.”

Gaming Revenue Up
Delegate Norm Conway shared news from Annapolis that shows “interesting trends.” State gaming revenue is up $179.4 million, or 27.6-percent over fiscal year 2012. A letter from Stephen Martino, director of the Maryland Lottery and Gaming Control Agency, confirmed the numbers.
“The Maryland Lottery and Gaming Control Agency recently closed out Fiscal Year 2013, and we are pleased to report that the State of Maryland received more than $829.5 million in revenue generated from both the traditional lottery and casino gaming,” he wrote. “Even more noteworthy, that $829.5 million represents an increase of $179.4 million, 27.6-percent more revenue to the state than in Fiscal Year 2012.”
From the money generated just by casinos in FY12, $608.3 million, $284.3 of that has gone into the state’s Education Trust Fund. From there, Conway told the LDC, the money can be applied to pretty much any education project but will only be used for education projects.
“It will be a supplementary type of revenue to education. It’s not reduced what the state is putting in and the state’s place,” he said. “It will be in addition to. It can be in any area … Once it goes out to the subdivisions, it will go out to their projects, I suppose, and education programs that the counties are funding.”

Reports Sought On
Impact Grant Funds
Following a discussion at an LDC meeting earlier this summer, the group has now voted to request reports from the county and all municipalities regarding impact funds, which is the money the casino contributes to local government. The council will now be updated every fall on how towns and Worcester used the funding provided to them via casino revenue.
“We’ll try to get you some consistency so you know what to expect,” Kim Moses, the county’s public information officer, told the LDC. “Each fall meeting, whether you decide to have that in August or September, we’ll have that information for you.”
Impact grant funding so far has been used on things like education and public safety primarily. The town of Berlin got ahead of the ball and sent the LDC a letter outlining their expenditures already.
“During Fiscal year 2013, the Town of Berlin received $227,474.31 in slots impact grant funds generated from the Casino at Ocean Downs,” wrote Mayor Gee Williams. “All funds received during FY 2013 were expended for principal and interest and interest payments for the purchase of 5.25 acres of property adjacent to US 113 and Bay Street Extended in Berlin. The total purchase price of the property of $828,530 was paid off June 30, 2013, two years ahead of schedule.”
LDC member Cam Bunting, who made the original inquiry to see how towns were spending impact funds, said she was pleased that the reports will be coming in every year but is disappointed they weren’t requested a little earlier. She also suggested that the LDC have a meeting in January to review this year’s reports instead of waiting until the spring. The council agreed and scheduled their next meeting for late January.

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