Powell Center Upgrade Approved

OCEAN CITY – The Ocean City Council may have provided a stimulus package of its own Tuesday, voting to move forward with plans to double the amount of exhibit space and add a 1,200-seat performing arts center at the Roland E. Powell Convention Center.

Although there are still some hoops for the town to jump through before the plans can become a “work in progress”, it appears that those plans have finally hit the mark, as the council voted 5-2, with Joe Hall and Margaret Pillas in opposition, to opt for the most costly option for renovation while cutting the food and beverage tax in half.

The process to get to Tuesday’s vote varies anywhere from one to three years depending on whom you talk to, but everyone agreed (even those who voted against it) that “option A” was far better than anything that has been brought to the table thus far, and the economic impacts could be vast.

“This plan is much better than what we had before,” said Mayor Rick Meehan, “and any way you look at it, we are still gaining 10,000 square feet of exhibit space, and with the lowering of the food tax, it makes it an even better plan.”

The break down of the total $10.4 million “Option A” includes not only enclosing the existing bay front deck, but also expands it to the west and the south, achieving 20,000 square feet of new space for exhibits and dining, as well as a $600,000 energy and heating efficiency improvements that will be paid for by a grant from President Obama’s recent stimulus package.

“This expansion is virtually the equivalent of the existing main ballroom,” according to City Engineer Terry McGean, “and (option A) will enable us to convert a portion of the existing ballroom to a fixed-seat auditorium while maintaining a full 20,000 square feet of exhibit space in a single room.”

The performing arts center portion of the project had come under fire from some exhibitors who use the current space as the original proposal would have conceivably cut the existing ballroom in half to accommodate the originally proposed 1,700-seat auditorium, but McGean said all the former “naysayers” are on board with the new idea and the amended 1,200-seat center that will be much like the 1,300-seat Sandler Center in Virginia Beach.

Another big reason the proposal passed through council was that $4.1 million of the total sum will be paid by the Maryland Stadium Authority, who unanimously voted to once again be the town’s 50/50 partner in the convention center expansion.

The one intangible that could temporarily stall Tuesday’s vote is that the town must wait for the Stadium Authority to go through the legislative process in order to be granted the right from the State Board of Public Works to buy the bond that will cover its part of the expenditure.

The additional $1.6 million of the total bill that isn’t included in the 50/50 split of the $8.2 million is for the performing arts center, which, according to McGean, the town was unable to request assistance because additional economic studies would have been required that time did not permit.

The turning point in the conversation, however, seemed to take place when Seacrets owner Leighton Moore, who was one of about two dozen business owners who showed up to support “option A”, said that the project could be done while cutting the 1-percent food tax at the same time.

“If anyone’s done the figures, you could do this at a half percent,” said Moore, a former Ocean City councilman. “You could lower your tax down and still fund this project.  Everyone is worried about the economy. Why not look at a way to do everything that we want to do within the confines of what we have already exemplified that we can do?”

The bond that the city would purchase to pay for this project would be paid back with money brought in from the 1 percent food and beverage tax, which was instilled during the last expansion of the convention center in 1995.

Moore’s claim that it could be done by in fact lowering the aforementioned food and beverage tax received quick concurrence from town Finance Administrator Martha Lucey.

“There would be adequate funding with a half percent tax to pay it off in less than 10 years,” she said.

That notion seemed to open the floodgates of discussion, as several of Ocean City’s top businessmen took to the podium to support the upgrade.

“If you cut the tax in half from what people are used to paying, then let’s get this done now,” said Moore.  “You are charged with a job of moving Ocean City into the future and not just staying static and putting things off for a year. Why you wouldn’t vote for this I don’t know, but if a half percent can retire this, it’s a win-win.”

McGean said that the estimated economic impact for this project is $23.6 million annually (excluding the impacts of the auditorium, which have yet to be projected), and up to $2 million annually in fiscal impact, as well as provide numerous jobs and business for the local community.

Mayor Rick Meehan said that lowering the food tax would send the right message to the people of Ocean City that the town was trying to be proactive while remaining somewhat conservative.

“You never want to collect more than what you absolutely need to and if we can do it at a half percent, then it only makes the entire proposal more feasible and in my opinion it is right on to do it this way,” he said.

Meehan also added that the presence of so many in the business community sent a strong message to the council and applauded his colleagues and those in the business community for having the foresight to move Ocean City in a “forward direction.”

Councilwoman Mary Knight thought option A was sending an even stronger message to the public.

“This gives people something to look forward to, and it shows that Ocean City is not backing down, and that we feel good about our town and what it will do for our town,” said Knight. “It’s time to revitalize, and this is the right time to do it.”

Councilman Joe Hall who along with Pillas voted against the expansion, said that though the plan was the best one to come across the table, he was not convinced of the “net gains” for the average taxpayer.

“I see the merits of the project,” said Hall, “but I believe that the numbers are highly exaggerated for the majority of the tax base.  I wanted a clearer economic picture, and I wasn’t ready to grow our operations.”

During the discussion, Hall tried to argue that property taxes would rise because the convention center’s operational deficit would increase due to the expansion, but his claim was quickly refuted by McGean, who said that the projected $167,000 per year in operational deficit caused by the expansion would be covered by a projected $372,000 in new tax revenue.

In the end, McGean said the project could break ground next winter and the design and request for proposal (RFP) process will begin once all the aforementioned intangibles are tied up.

“Once everything is designed and permitted, construction of the new part of the center will be done in 20 months, and the reconfiguring of the existing ballroom into the performing arts center will take four months,” said McGean.

He also stressed that no events will be postponed or moved during the building process, and estimated the newly renovated convention center could be operational by winter 2012.

“This is the type of venue that we need in Ocean City, said proponent and local realtor Peck Miller. “If this isn’t a stimulus package, I don’t know what is.”