Study: Racino packs economic punch

BANGOR – A combined racetrack and casino, or racino, proposed for Bass Park could generate as much as $75.3 million in annual revenue and an additional $95.6 million in local sales revenues, according a much-anticipated economic impact study released Thursday.

The study, by economists Jonathan Ruben, Todd Gabe and Thomas Allen of the University of Maine’s Margaret Chase Smith Center for Public Policy and its Department of Resource Economics and Policy, was commissioned by Capital Seven LLC, owned by Nevada businessman Shawn Scott. A spokesman for Capital Seven said the study cost about $20,000.

Last fall, the city of Bangor was approached by Capital with a proposal to develop a $30 million entertainment complex at the city-owned harness-racing track at Bass Park.

The project would involve improving the racing facilities and constructing several amenities, including a high-end hotel and a casino with as many as 1,500 slot machines. Proponents say the project also would bolster harness racing, which has fallen on hard times, with revenue from slots, which would have to be approved by voters in Bangor and statewide.

“We’re very excited about bringing those numbers forward to the voters of Bangor,” said Daryn Demeritt, communications director for Pierce Atwood Consulting, a division of the Portland law firm Pierce Atwood, Capital Seven’s legal counsel in Maine.

“This is a great day for Bangor,” added Jim Baldwin, another Capital Seven representative. “This economic study shows wonderful news. Its findings are based entirely on new economic activity. The study validates our projections and validates what we’ve been saying all along.”

The city’s share of the slots proceeds and the amounts it would receive in property taxes and lease payments – dollar figures have yet to be released – could help pay for things such as the arena it wants to build downtown and street repairs, Baldwin said.

In their report, the economists said they expected the facility to draw customers primarily from Maine and parts of New Hampshire, New Brunswick and Quebec, Canada. A portion of Maine’s out-of-state tourist market also is included in the expected customer base.

Other economic benefits, according to the report, include the creation of 314 on-site jobs, most of them full time, with a projected payroll of $5.3 million. The economists estimated the complex would yield annual economic spinoff in the Maine economy of $57.8 million, $6.8 million of that connected to wages and salaries for 318 additional jobs.

In addition to the $95.6 million in sales revenue projected for the Bangor economy, local economic impacts include a projected $6.8 million in wages and salaries for 504 full- and part-time jobs.

Renovations and construction alone, slated to begin this fall and continue into 2006 if approved, are expected to result in 527 new jobs, $9.1 million in wages and salaries and $1.1 million in state and local taxes during that period.

Not addressed in the study include the racino’s effects on the local labor market, added demand for public services and potential social costs associated with crime and compulsive gambling. It assumes that no significant competition, namely gaming complexes, exists in the region.

In their executive summary, the economists noted: “The realized economic impact on Bangor and the state of Maine will depend heavily on the racino’s ability to attract patrons from beyond the Bangor region and from out of the state. For this analysis, we used a 150-mile market area. The actual market area and the amount of tourist visits that ultimately occur will depend, in part, on the quality and attractiveness of the proposed redeveloped harness-racing facility, and the hotel and conference center. If the racino complex … is not of sufficient quality or size, the associated economic impacts presented in this report will not be realized.”

Bangor resident Bill Varney, a local businessman for 40-plus years who owns horses that race in Maine, New Jersey, Pennsylvania, New York and Canada, also spoke in favor of the project. He said that the boost that slots revenue would give purses (the prize money awarded to race winners) would help those involved in harness racing “make a decent living. The purses keep everything going.”

He also noted that enabling horse farms to get by also could help the city preserve some of its remaining large open spaces, some of which are in danger of being divided into residential or commercial lots.

Bangor will vote on the installation of slots at Bass Park on June 10. A statewide referendum to place slots at commercial racetracks in Bangor and Scarborough will take place Nov. 4.

In addition, Capital Seven is negotiating a development deal with the city.

Jonathan Daniels, Bangor’s business and economic development director, said that some of the details of the deal that is being structured will be unveiled Wednesday during a 6 p.m. meeting of the City Council. The council will conduct its regular meeting at 7 p.m. that night because City Hall will be closed Monday, its usual meeting night, in observance of Memorial Day.

Varney noted that if Bangor voters do not approve slots for Bass Park in June, the project could move elsewhere.

According to the legislation Maine voters will consider in November, the slot machines could be installed at a commercial track located “at or within a 5-mile radius of the center of a commercial track that conducted harness racing with pari-mutuel wagering on more than 25 days during calendar year 2002,” like Bangor Raceway did.

Among the outlying communities that fit the bill are Brewer, where Capital Seven has a backup site on outer Wilson Street, Hermon, Orrington and Hampden. According to the legislation, the slots would have to be approved by voters of an alternate community before December 31, should Bangor voters reject slots.

Varney said other communities have expressed interest in hosting the entertainment complex Scott hopes to build here.