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Berlin, Ocean Pines News Worcester County Bayside Gazette Logo Berlin, Ocean Pines News Worcester County Bayside Gazette

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Casino tells OP growth plan

By Greg Ellison

Downs makes pitch  regarding rezoning and its expansion

(Oct. 22, 2020) As Worcester County officials continue weighing the merits of a proposed text amendment for a Casino Entertainment District at Ocean Downs on Route 589, the potential facility expansion was also vetted by the Ocean Pines Association Board of Directors during its meeting on Saturday.

Ocean Downs General Manager Bobbi Sample reviewed details for a text amendment request that would create an overlay for the A-2 district facility, which was presented in April by attorney Joe Moore.

Sample conceded that the request to Worcester County for zoning modifications has raised concerns and generated confusion.

“This overlay sits on top of our A-2 zoning,” she said.

Although the zoning overlay would allow for a host of possible additions, such as restaurants or outdoor concert venues, the initial goal would be building an adjacent hotel.

Under Maryland law, licensed gaming establishment are not permitted to operate an associated hotel but could lease or sell property tor an outside developer.

“Everything that we will do at the property is going to be geared towards increasing our core businesses, the casino and racetrack,” she said. “We are still a casino but are owned by Churchill Downs, so racing is obviously something that’s important to us.”

In January 2017, Churchill Downs and Saratoga Casino Holdings assumed ownership of Ocean Downs, with Churchill subsequently assuming full control in September 2018.

Sample said the text amendment would largely serves as a “cleanup bill” to clarify allowable uses, which are currently tied to special exceptions granted in 1997 and 2010.

“We’re really just trying to clean up the fact that all of our uses outside of the racetrack, which includes the casino, have all been by special exception,” she said. “Just to make it clear and transparent to everybody what is allowed on that property.”

In 2008, Maryland voters supported a referendum to permit electronic gaming machines at a handful of locations across the state, including one license in Worcester County. Ocean Downs was the sole applicant in the area and began casino operations in January 2011.

The last casino expansion, which got underway in 2013, was completed in December 2017 and added 50,000 square feet that included 10 table games and a restaurant. Maryland casinos were permitted to add table games following passage of a referendum in 2012.

Sample said the overlay district designation would assist with long-term planning in terms of allowable uses, while also noting any future additions would require approval by Worcester County Planning and Zoning Commission.

“We are now surrounded by commercial zoning,” she said. “If it was commercial zoning there would be more than 40 uses.”

Sample said, by comparison, the overlay district would be more limited in scope.

“It was recommended by the staff at the Worcester County [Technical] Review,” she said.

Worcester Planning and Zoning gave the proposal a favorable recommendation on Aug. 6 before sending the matter to the Worcester County Commissioners for potential final approval.

The proposed Casino Entertainment District would require a minimum lot area of 90 acres. Permitted uses and structures would include parking garages, entertainment venues, non-retail recreation areas, outdoor arenas, theaters, restaurants, health clubs or assembly areas.

Sample said despite the extensive list of possibilities, market factors would limit future growth.

“We can’t support a Las Vegas-style property year round here,” she said. “We’re a drive-in destination and there’s just not enough population to bring here for something like that.”

Sample also said higher tax rates, currently set at 47 percent, would provide a disincentive for excessive gaming expansions.

“When we originally opened the tax rate was 67 percent,” she said.

Ocean Downs was granted a tax break after Maryland expanded gaming facilities from a handful to a half dozen after granting MGM Resorts International a license in 2013.

“They reworked everyone’s tax rate,” she said. “Our tax breaks were tied to the fact that we would have less than 1,000 [slot] machines on our property.”

Sample said the potential revenue stream at Ocean Downs is minimal and would not justify losing the 10 percent tax break tied to machine counts.

“There’s not a casino is Vegas as small as this one,” she said.

For now, development plans are focused on having an outside operator construct a hotel on site.

“We can’t have a financial interest in it,” she said.

Sample said lodging facilities would serve marketing purposes for Ocean Downs to attract regular players to visit more frequently.

“We are not currently getting all of gaming wallet for target gamblers, “ she said.

The intent is to compete with current gaming facilities in neighboring states, as well as possible future entities. Portsmouth and Norfolk, Virginia, both just a few hours’ drive away, are proposing referendums for commercial casinos this November.

“Discounts or comp rooms would be limited to members of our player reward club,” she said.

Sample said the casino entertainment district overlay would be an economic driver for Worcester by helping to spread dollars to area businesses.

Approaching its 10-year anniversary in January, Ocean Downs has produced $29 million in impact grants in Worcester County, with Ocean Pines netting more than $2.7 million. Ocean City and Berlin are also both beneficiaries.

“Each of these areas gets a piece of our revenue through taxes that comes directly to this county,” she said.

The funds are restricted to use for primarily infrastructure or public safety needs.

“Those type of things that are directly impacted by the fact that the casino exists here,” she said.

Board member Dr. Colette Horn asked who would foot the bill if a required traffic study identifies road expansions are needed.

Sample said Ocean Downs would be responsible for any associated cost for roadwork.

“It would have to part of our project for us to move forward,” she said. “That becomes a cost of doing business for us if we want to expand.”

The Worcester County Commissioners, who have yet to approve the text amendment request, delayed a previously scheduled public hearing on the matter until Oct. 20.

Sample said concerns also abounded a dozen years ago when the casino was first discussed.

“There were a lot of concerns that the town would go downhill … and that we would steal a lot of business for other local businesses,” she said. “In fact that has not happened and we have been a very good community partner over the last 10 years since we opened.”