Ocean City Today

State, county studies show profit potential at complex

A $9.2 million center losing $183K in operations could return $5.9 million annually
By Brian Gilliland | Sep 07, 2017

(Sept. 8, 2017) Paige Hurley, director of Worcester County Parks and Recreation, said he was tired of having the same conversation as he and staff traveled to trade shows and conferences trying to sell the county to sports tournament organizers.

“The first thing that happens is they ask if we have a space with eight or more fields, and we say no, and then the conversation is over,” he said.

A couple of years ago, the county was presented with the opportunity to build its own sports arena/outdoor complex, which was eventually trimmed to just an outdoor sports complex. Supporting the notion for the outdoor complex is a study performed by the Maryland Stadium Authority, the state agency communities generally work with for such projects.

County staff called the study, which promised tens of thousands of additional hotel stays and tens of millions in direct and indirect spending associated with the complex, “overly optimistic.”

So, county staff went the other way and produced its own evaluation of the economic impacts a substantial sports complex could bring. This study was the foundation of a work session dedicated to the topic between the Worcester County Commissioners and staff on Tuesday.

Merry Mears, director of economic development, when asked her opinion of the staff effort, said she thought the projections would be based on taking the previous study and cutting the numbers in half. She said the internal study goes farther.

“I feel like we’re undercutting the opportunity. This is a very, very conservative effort but it’s still showing a potential for profit,” she said.

First, it would need to be built. The estimated cost to build an eight-field complex on 100 acres, with concessions, restrooms, stormwater management, storage and other related amenities is about $9.2 million.

Commissioner Diana Purnell asked if the county could afford the cost.

County Administrator Harold Higgins said it could, while County Treasurer Phil Thompson said the $10 million concerns him, but that funding partners shouldering some of the burden could be “a game changer.”

For the first three years of operation, staff estimated 12-14 tournaments could be held drawing fewer than 40,000 participants and spectators total, and generating between 14,400 and 21,000 hotel stays.

Based on these numbers, county staff projected revenues of $210,000 against $393,000 in expenses, leaving a deficit of $183,000.

For that cost, however, the economic impact shows almost $2.9 million in additional room rentals, $1.8 million in food and beverage sales and about $1.2 million in miscellaneous spending, for a total of nearly $5.9 million in economic activity.

Sponsorship revenue was set at $25,000 for the purposes of the study, while many parties involved thought that number was too low.

The county and municipalities could realize almost $200,000 in additional tax revenues based on the projections.

Based on the findings, county staff supported the project, and concluded it could have a substantial positive impact on the local economy.

The next step, which the commissioners approved by a vote of 5-2, is to proceed to a site plan study, which entails the county staff identifying potential sites for the facility and submitting them to the stadium authority to review.

The only cost of this process to the county is staff time.

The stadium authority will then produce its own study at a cost between $300,000 and $400,000, of which the county would be partially responsible. That document would provide more in-depth data on what the market potential for the selected site could bring.

County staff and commissioners said they had been contacted directly by interested parties offering their land, but no site has yet been selected.

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