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Time to limit Rocky Gap losses

March 11, 2005

Would adding 1,000 slot machines help stem the flow of red ink from the state-owned Rocky Gap Lodge and Golf Resort? Yes, a top state official says.

Perhaps that and other predictions of better days to come are correct, but Gov. Robert Ehrlich and the General Assembly need to put a limit on how many more millions the state will spend there.

Robert C. Brennan, the head of the Maryland Economic Development Corp. said the Allegany County facility lost $5.6 million last fiscal year. That brings total losses for the six years it has operated to $31.1 million.

Brennan told The Associated Press that the loss for fiscal 2004 was $1 million less than for 2003. He said slots would help, but didn't expect them to do the entire job.

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The key to improving the resort's bottom line, Brennan said, is to increase sales there from the last year's $7.7 million to $13 million.

Brennan said the resort is two to three years away from doing that, although the firm that manages it projects a 20 percent increase in sales this year, in part because of a $4.6 million hotel expansion that was completed in September.

Let's assume that Rocky Gap will "only" lose $4 million in each of the next three years. That would still be $12 million spent on a facility that has never fulfilled its economic development potential.

We recommend two things:

· Let state officials decide on a limit to the subsidy over the next three years - and then stick to it.

The mindset now seems to be that since so much money has already been spent, the state can't give up on the project now. Setting limits is not giving up, but being realistic and fiscally prudent.

· Measure the economic impact of Rocky Gap on Allegany County. If it's minimal, there are no doubt better ways to spend millions of dollars to boost that area.

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