By Josh Davis, Associate Editor

(Dec. 27, 2018) Hiring of the Matt Ortt Companies this year to oversee Ocean Pines food and beverage operations was the linchpin of a remarkable fiscal turnaround for an association entity that had lost $1.6 million over two years.

About $1 million of those losses were attributed to bad budgeting – and poor performance – at the yacht and beach clubs during fiscal 2018.

The Matt Ortt Company, based on early reports, led a storybook resurrection, with projections suggesting overall food and beverage operations may turn a profit in fiscal 2019.

Still, there was drama early on as membership waited on eggshells for an announcement of what could be done to right the ship.

In January, General Manager John Bailey assured members of the clubs advisory committee that things would be different. To start, he proposed hiring a management consultant to run the yacht and beach clubs.

“It’s likely to be at least a two-year type of contract … One year is to turn things around [and] the second year you’ll start seeing different benefits,” Bailey said at the time.

Committee Chairman Les Purcell said the association did not have a good track record with outsourcing, but Bailey countered, “We haven’t done what I’m proposing yet.”

“Don’t look for us to do things the way we used to do them,” Bailey added.

“Good!” several committee members responded in unison.

By February, the short list was narrowed down to two candidates: the Matt Ortt Companies, which run establishments such as Rare & Rye in Ocean City, and a group led by former Ocean Pines Food and Beverage Director Joe Reinhart.

The association’s board of directors met with both groups, but a decision was delayed until late March, when it was announced the board had unanimously approved a contract.

An association press release said the Ortt Companies would “manage, control and operate the yacht and beach clubs, including all food and beverage operations, janitorial services, banquet functions (weddings, anniversaries, etc.) and special functions, and any other food and beverage function assigned by the Association, subject to the Association’s right to establish reasonable regulations with regard to the use of the facilities.”

In April, the Gazette obtained a copy of the agreement, which showed the Ortt Companies would collect $100,000 a year for the next two years to manage the clubs.

In addition to the flat management fee, Matt Ortt Companies could earn bonuses based on performance against the budget and outright profitability.

On April 19, company cofounders Matt Ortt and Ralph DeAngelus were officially introduced to the Ocean Pines public.

Matt Ortt spoke first, joking the number-one reason his company would succeed was because “my mother lives in Ocean Pines and I’ll never hear the end of it.”

Ralph DeAngelus did most of the talking, several times promising “open and honest communications” with membership.

“I’m going to give you the good and the bad – you’re going to like hearing some things; you’re not going to like hearing other things, but you deserve to hear all of it,” he said. “We need to be transparent with everything that’s going on, so that there’s no ambiguity going down the road.”

DeAngelus said the Ortt Companies inherited a large amount of bad inventory, from a huge stock of rotten food at the beach club, to a surplus of off-brand liquor bought in bulk for both facilities that would be difficult to sell and could hurt the bottom line.

He said the yacht club menu would not resemble Rare & Rye, an upscale facility in Ocean City, but would instead be created to fit the community.

“We know who we’re dealing with. We know what our demographic is,” DeAngelus said. “We know Ocean Pines has a large demographic, but we know that they consider this property … home. And at home you don’t want to get railed.”

“It’s going to be good food, great service at a good price,” he added.

He said the beach club menu would largely be made up of grab-and-go items, with waiters staffed to take drink orders.

To lower food costs, DeAngelus said many of the same ingredients would be used at both facilities, and the company would also tie in food purchases with other Matt Ortt properties to further cut prices.

DeAngelus said renovations at the yacht club were done to improve the flow of the restaurant, and an interior decorator changed the wallpaper and installed new lighting to improve the ambiance.

“You’re going to feel as if you’re in a beautiful restaurant and not a cafeteria,” he said.

He said less was done at the beach club because of a lack of funding, but several improvements were made to bring the building up to code. Leaky sprinkler systems and corroded hot water heaters were replaced, and the deck was resurfaced.

Soft openings for both facilities were held in May, and both operations were up and running as of Memorial Day.

Both were well received and the beach club immediately set records.

“So far, it really has been great. Our results have been exactly what we’ve hoped for,” DeAngelus said after the yacht club reopening. “Sales are strong and the Ocean Pines community came out fast and furious to see us.”

A week later, he said the beach club reopening “went spectacular.”

“We broke the all-time single-day sales record for the beach club on Saturday – on our second day! How funny is that?” he said.

Along with record sales, DeAngelus said attendance figures at the beach club were similarly staggering.

“At one point in time, I think I saw, between the pool and the beach and inside, maybe upwards 2,000 people,” he said.

The warm weather and mostly clear skies certainly didn’t hurt, DeAngelus said, but credit also goes to the new staff.

“Businesswise, we were just prepared. We were staffed for the weather and the impending onslaught of people,” he said. “Don’t get me wrong – we had our fair share of hiccups. You can’t be open just two days and set a sales record and not have hiccups, but for the most part I was very happy with the way things went.”

Success followed the Ortt Companies throughout the year. By November, the clubs committee was raving about the turnaround in its end-of-year report.

According to the report, “Bringing in The Matt Ortt Companies to manage the [yacht club] and beach club has made a tremendous improvement in all aspects of the food and beverage operations at these two locations.

“Many of the problems and issues the [committee] had been reporting on for the past several years have been addressed to great satisfaction by pretty much everyone who has frequented these establishments. The OP community as a whole has embraced the changes and improvements that the Matt Ortt Companies have made,” the report said.

“Contracting to have the Matt Ortt Company manage and run the yacht club and beach club has made a huge improvement to the decor, service, food, finances and customer satisfaction at both facilities. The committee suggests the board listen to and seriously consider any requests they make for items that will enhance the customer experience, and financial benefits to the Ocean Pines Association,” the report added.

In December, during the final regular board meeting of the year, Assistant Treasurer Gene Ringsdorf confirmed the incredible turnaround.

While the overall fiscal year 2018 budget finished in the red to the tune of about $1.2 million, the first six months of fiscal 2019 reportedly finished more than $100,000 in the black.

Ringsdorf said for the six-month period ending on Oct. 31, overall revenues were over expenses by $118,000.

He said yacht club revenues were $317,000 over budget, while expenses were over by $197,000, for a net positive of $120,000. He said the beach club finished positive by about $17,000.

Looking ahead to the end of the fiscal period, he said the association was projecting a net $9,000 loss for the year.

Aquatics (negative $29,000) and the yacht club (negative $13,000) were both projected to finish in the red, while golf, golf maintenance, the Tern Grille, beach club, beach club parking, and marinas looked to finish above budgeted numbers, Ringsdorf said.