Measure speeds through on last day of legislature
(April 12, 2019) State lawmakers waited until the last minute of the legislative session, but did manage to secure $24.5 million in bonds to finance the third phase of expansions at the Ocean City convention center.
Since testifying during a House Appropriations Committee hearing in February for House Bill 178, cross-filed as Senate Bill 177, city officials were kept in the dark regarding potential passage of the funding.
The legislation remained mired at the committee level for more than a month, but last Friday the Senate Budget and Taxation committee issued a favorable report and HB 178 was passed by a 44-0 vote.
On Monday, the House Appropriations Committee also issued a favorable report and SB 177 was passed on third reading, by a 133-0 margin later that day.
Speaking on Tuesday, City Manager Doug Miller said the down-to-the-wire passage was inspiring for both Ocean City and the state as a whole.
“We’re elated,” he said. “This third phase will allow us to bring in so many more conventioneers and different groups.”
The third phase of expansions at the Roland E. Powell Convention Center consists of a 30,000 square foot addition to the main exhibit hall, with exhibit space increased space from 60,000 square feet to 90,000 square feet.
Miller said while obviously a boon for the resort, the convention center growth would also net the state increased tax revenue.
In 2016, the Maryland Stadium Authority produced a feasibility study that indicated adding 30,000 square feet of exhibit space would result in between $2.6 million and $3.5 million in additional tax revenues for the state, and up to $1 million for Worcester County. SB 177 includes annual bond debt service payments of $1.75 million from fiscal 2022 through fiscal 2039.
The funding request looked to be on track in 2018 after similar legislation, HB 133, was approved by the Appropriations Committee and passed by a 130-3 floor vote in April, but the bill subsequently failed to leave the Senate Rules Committee.
Brimming with optimism, last August Gov. Larry Hogan, accompanied by Mayor Rick Meehan and Maryland Stadium Authority Executive Director Michael Frenz, held a press conference at the convention center to announce he authorized the Maryland Stadium Authority to pursue funding during the next legislative session in January 2019.
The 2018 legislation would have allowed the Stadium Authority to assume $21.7 debt capacity, with $20.4 million bond proceeds to cover construction costs, with Ocean City contributing $14 million towards construction, and both entities contributing $50,000 annually to a capital improvement construction fund.
The revised legislation passed this week requires the resort to contribute $15 million towards construction, with total building costs budgeted not to exceed $37.5 million. Additionally, annual contributions for the capital improvement construction fund was increased to $100,000 for both entities.
After the council initially approved the third phase of convention center expansions in November 2016, the city passed a bond issue to earmark $15 million for the effort.
The convention center was opened in 1970 and initially enlarged in 1996. Since that time a pair of expansions, which constructed the Performing Arts Center, renovated the ballroom and replaced an exhibit hall, were completed in 2012 and 2015.
Miller said when the expansion is completed the extra square footage would be useful for numerous returning clients, many of whom have grown in size and require increased space.
“We don’t want to lose them to anyone else,” he said.
Miller said the larger footprint could also accommodate conventions, which the city has previously turned away.
“The only groups that we’re not going to be able to get are those big, big events that need an airport,” he said. “That’s the only segment of the convention business that we can’t cover.”