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The new operations agreement with MSA changed the cost-share arrangement from a 50/50 split to 60/40 deal with the stadium authority picking up the larger share.

(Oct. 11, 2019) The evolution of Ocean City’s Roland E. Powell Convention Center continues, as the City Council last Monday formalized a new cost-sharing agreement with the Maryland Stadium Authority to pay for the third phase of  the facility’s expansion and renovation.

The new operations agreement with MSA changed the cost-share arrangement from a 50/50 split to 60/40 deal with the stadium authority picking up the larger share.

Work is scheduled to begin this coming April and end in December 2021. 

Phase 3 will cost $37.5 million, with the city responsible for $15 million and the MSA covering $22.5 million. 

Additionally, state legislation authorizing the new formula boosted both the state and the city’s annual contribution to the convention center capital reserve fund from $50,000 to $100,000. 

The city pays for its portions of renovation costs through the resort’s food tax, said City Engineer Terry McGean, who presented the agreement to the council.

He said the costs should pose little issue, as the city hasn’t had trouble generating its share, despite reducing the food tax from 1 percent to .5 percent in 2009. 

While the convention center expansion has been expensive  —around $60.6 million total — the revenue and employment it has, and will create, far outweighs the cost, McGean said.

Prior to the expansion in 2009, the convention center generated $160.5 million in direct and indirect spending, and created 1,500 jobs. 

McGean said the projected revenue and job growth for phase 1 and 2 were $29.8 million and 365 jobs, and $4.2 million and 45 jobs, respectively. 

In FY2018, the state reported that the building’s actual economic impact was $217.4 million and 1,990 jobs. 

“Actual growth since the completion of phases 1 and 2 has been $56.9 million and 490 jobs,” McGean said. “So results have exceeded the estimates.” 

Phase 3 is expected to continue this upward trend, with a gain of $57 million in tax revenue and 570 jobs. 

“Every expansion that we’ve done … has been very successful, and the building has outperformed what we anticipated,” McGean said. “We’re excited to get this done and to get this open.” 

The project began in February 2009, when the City Council approved the then two-phased project.

“The space wasn’t large enough, and it didn’t have the amenities that a lot of our building users were requesting,” McGean said. “We couldn’t bring new people in because we had grown as much as we could in the existing building.”

Phase 1 focused on adding space to the lower exhibit hall, 14,218 square feet, and the ballroom, 12,663 square feet, and creating views of the bay, which, at the time, could only be seen from the truck loading dock. 

McGean and his team moved the truck dock from the west side of the building to the south side, added an exhibit room underneath, and tore down an old stage and raised the ceiling to shift the ballroom to the west to achieve the desired bay views. 

The first phase cost $9.1 million dollars — $5 million to the city and $4.1 million to the MSA.

In phase 2, the performing arts center was added. McGean said he and his team knocked down a piece of the ballroom floor and first floor exhibit hall to create an open two-story space to add a 1,200-seat auditorium with a performing arts stage. 

This phase cost $14 million, with the city and state paying $7 million each. 

McGean said phase 3 had the same goal as phase 1 in further expanding the convention center’s square footage, as its use has quickly outgrown its capacity. 

He said set-up and cleanup for an event takes around two days each, while the event itself could take two to three days. At its current size, this meant the convention center could only accommodate one event per week. 

“One of the v… advantages to what we are doing is the ability to have multiple events at the same time,” McGean said. 

The project will add 30,000 square feet to the main exhibit hall, increasing its square footage to 90,000 square feet. 

An MSA feasibility study in 2016 concluded the additional space would result in between $2.6 million and $3.5 million in additional tax revenues for the state and $1 million for Worcester County.

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