By Guy Leonard, County Times (guyleonard-at-countytimes.net)
HOLLYWOOD, Md. (October 21, 2010)—Economic development and business insiders say that the reported closing of the J. T. Daugherty center, the county’s main conference center located in Lexington Park, is a major shock and disappointment but it also reflects a fiscal reality of the times.
Brian Norris, the chief operating officer of Cherry Cove Property Management of which the conference center is a part, said that the decision to close the facility in January was a financial one.
“It definitely was not a decision that was taken lightly by any stretch of the imagination,” Norris said.
With the increase in the amount of conference center stock in the county, Norris said, he realized the future growth of opportunities for the site were likely limited. What’s more, he said, the costs and effort that went into the site had just become too much to deal with while Cherry Cove sought to expand hotel and other space here and elsewhere in Maryland.
“The return on investment was no longer there for the Daugherty Center,” Norris told The County Times. “It was that there was not enough business coming in and the amount we had to spend corporately on the facility.”
Norris said that the Daugherty Center revenues for Cherry Cove represented just 6 percent of the company’s total take. Norris said that the space at the Daugherty site is slated to become high-end office space, which is still in demand to fulfill small business and contractor needs.
Built less than 10 years ago, the conference center quickly became the county’s top up-scale conference center, but observers say that an increase in the facilities available to handle meetings and social functions may have hurt the Daugherty Center’s bottom line.
Robin Finnacom, head of the county’s Community Development Corporation, said that commercial kitchen facilities available for use at places like the Hollywood and Bay District volunteer fire companies as well as the Crystal Room in Callaway could see an upturn in business with the demise of the Daugherty site.
But what could be more worrisome in the future, Finnacom said, was the U.S. Navy’s plans to bring more of the same inside the base gate at Patuxent River Naval Air Station with the proposed Enhanced Use Lease (EUL) project.
Insiders believe that the construction of the new River’s Edge conference center on base helped drain business from the Daugherty Center.
Norris said that the opening of the conference center on base had a “minor impact” on the Daugherty center’s operations.
“If office space relocates on base it’s going to put pressure on offices outside the base,” Finnacom said.
And the local economy will see the loss of service jobs, said Bill Scarafia, president and CEO of the St. Mary’s County Chamber of Commerce, as well as a major marketing tool for the entire county.
Scarafia said that as the county expands its hotel stock in expectation of getting temporary lodging dollars, it could lose out on infusions of cash based on large parties and other events that will now look elsewhere for high quality conference facilities.
“What you’re going to see is a loss of opportunity,” Scarafia said. “Technically, there’s no other facility of its kind in the county.”
Norris said that employees at the facility might still find work in the Cherry Cove corporate structure, but there were no guarantees.
Scarafia said the center also served as a draw that the chamber could advertise to bring in money to the local economy, but now that option will no longer exist after January 2011.