City considers ‘racino’ request Developer proposes new racetrack, gaming facility at Bass Park

loading...

BANGOR – City officials will grapple tonight with the decision whether to start negotiating with a developer who wants to pump $30 million into the harness racing facility at Bass Park

The developer’s track record – mixed success in other states -could make it a difficult decision.

City councilors are slated to consider a request for tentative developer status from Capital Seven LLC, the company that operates Bangor Raceway, during a meeting at 7 p.m. today at City Hall. The proposal also will be discussed during a 5 p.m. workshop.

Tentative developer designation allows the city to negotiate a development agreement with a designated party for a specified period, City Solicitor Norman Heitmann said Friday. The purpose of awarding that status is to see if a development agreement can be negotiated that is acceptable to the city and the developer.

According to the council order, the deadline for coming up with a deal would be May 1, though Heitmann said an extension could be granted if warranted.

Capital Seven is one of several business concerns owned by Hawaiian businessman Shawn Scott. Scott may attend today’s meeting.

For most councilors, the meeting will offer a first encounter with Scott, whose representatives recently approached the city with a proposal to develop an up to $30 million gaming and entertainment complex at Bass Park.

Scott was tentatively scheduled to meet with city officials on at least three occasions in the past two months. Scott, however, was unable to keep those appointments.

As of late Friday, Scott’s appearance in Bangor was still on, city staff said. Attempts to contact Scott last week through his offices in Bangor and Las Vegas were unsuccessful.

During presentations for city officials, Hoolae Paoa, Capital Seven’s chief executive officer, said that what is being proposed for city-owned Bass Park is a new concept in entertainment called a “racino,” a combination racetrack and casino.

The idea is to bolster the sport of harness racing, which has been in decline, by combining it with gaming and year-round entertainment.

Tentative plans for the complex, called Bangor Historic Raceway, include a rebuilt track, a new grandstand, clubhouse and stables, a hotel-conference center offering as many as 250 luxury suites, an upscale restaurant, and parking for 2,500 vehicles. Paoa said that the company is prepared to spend as much as $30 million on the project.

Before that can occur, however, Capital Seven must clear several hurdles at the city and state levels.

In addition to seeking tentative developer status from the city, the company also is lobbying for a state referendum to introduce video lottery terminals, or slot machines, into the state at Bangor and Scarborough.

On Thursday, slots proponents submitted slightly more than 64,000 signatures in their effort to put the question on the November ballot. The Secretary of State’s Office now must determine if there are at least 50,519 valid signatures, or the equivalent of 10 percent of the total votes cast in the last gubernatorial election.

If approved, the petition will be presented to the Legislature as bills that can be approved or rejected by the lawmakers. Should legislators fail to approve the initiative, it will automatically be placed on the Nov. 4 ballot for voter consideration.

The machines could not be installed until also approved by Bangor voters in a local referendum. According to Heitmann, the earliest a city referendum could be conducted is 60 days after state approval.

Paoa said the company plans to redevelop the Bangor racetrack regardless of whether it wins permission to install slot machines, but that some aspects of the development, such as the proposed hotel-conference center, hinge on the availability of slots.

In making Capital Seven’s case for redeveloping Bangor’s track, Paoa touted the jobs and revenue a racino could bring to Bangor and the state, both of which are projecting bleak budget times.

According to the 118-page report “Gaming and Racing: A New Breed of Entertainment,” prepared by gaming industry analysts from Bear, Stearns & Co. Inc. of New York, dozens of states are bracing for budget shortfalls this year. Some states, Maine among them, face deficits in the area of $1 billion.

The firm is keeping an eye on about 15 states – New York and Pennsylvania among them – that could give racinos the green light, especially if the economy remains unhealthy.

According to Paoa, the company projects $43 million in operating costs and $86 million in annual revenues.

Under the terms of the referendum, 9 percent of slot revenues would be used to bolster the harness racing industry and 3 percent would help fund the state’s agricultural fairs.

A portion of the revenues would go toward a variety of social services – 10 percent for prescription drugs for senior and disabled residents and an additional 3 percent would be used to fund scholarships for Mainers enrolled in the University of Maine System or the Maine Technical College System.

In addition to new tax revenue for the city, the complex couldd boost the local economy by making Bangor a destination, not only for harness racing fans but for those interested in the slots and other proposed amenities, he said.

Paoa also said the racino would support 314 on-site jobs with a projected $4.8 million payroll. The Bangor racetrack accounts for 140 seasonal jobs.

According to a brief biography on the raceway’s Web site, at www.bangorraceway.com, 35-year-old Scott has a decade of experience in the gaming industry, including two years at the helm of Delta Downs Racetrack & Casino in Vinton, La.

After redeveloping Delta Downs, a thoroughbred and quarter horse operation with a six-month live racing schedule and a year-round off-track betting facility, Scott sold it to Boyd Gaming, one of the industry’s heavyweights.

Jack Hebert, a citizen member of the Calcasieu Parish Pari-Mutuel Live Racing Facility Economic Redevelopment and Gaming Control Assistance District, credits Scott with saving racing in Louisiana and for such economic benefits as increased jobs and increased traffic for area businesses, many of which he said were on the verge of going under. The racino that opened there last February was the first in that state.

A former chief of detectives, Hebert said that Scott had a successful track record with Delta Downs. “If there were any problems, I wouldn’t have supported [the redevelopment project],” he said.

In New York, however, another of Scott’s businesses called Mid-State Raceway Inc., has had less than stellar success.

Last month, the New York State Gaming and Wagering Board refused to issue Vernon Downs a license to conduct pari-mutuel harness racing in 2003. The reasons, according to the notice, were that issuance “would not serve the public interest, convenience or necessity and the best interests of racing generally,” and that the applicant, Mid-State Raceway, “failed to conduct racing in according with the terms and conditions of its 2002 track license and violated the orders of the board incorporated as conditions of licensing.”

Stacy Clifford, the board’s public information officer, said Friday that Mid-State has filed for an administrative appeal and that Vernon Downs currently has permission to operate the video simulcasting aspect of its operation under a court-ordered stay, pending the outcome of the administrative hearing.

Some issues that proved a problem for the board, according to published reports, included the track’s recent history of financial losses and failure to pay $450,000 in back taxes, $250,000 of which have since been repaid. Clifford said the board also was concerned about Scott’s close business ties with John Baldwin, a business partner. The board wanted to conduct a financial background check on Baldwin. Baldwin initially declined but has since said he was willing.

Erroll Additon of Leeds, chairman of the Maine Harness Racing Commission, said the Bangor Raceway has been granted a 2003 track license, pending the results of a background check expected to be completed by early February.

If the plan moves forward, it likely will do so without the support of Gov. John Baldacci, who also has made clear his opposition to plans for a tribal casino, according to his spokesman, Lee Umphrey.

“Racinos, like casinos, do not fit into the governor’s economic plan,” Umphrey said last week. “He’s open to promoting the tradition of harness racing but he does not think racinos are the best way to do that.”