BANGOR – After several months of sometimes turbulent negotiations, the city sealed a $30 million development deal with Capital Seven LLC on Thursday. The Nevada-based company is gearing up to build the state’s first racetrack casino at Bangor Raceway in Bass Park.

Capital Seven representatives – who irked several Bangor city councilors by initiating talks with nearby Brewer and who faced some eleventh-hour competition from an Iowa casino management firm – were visibly relieved after the council’s 5-3 vote approving the deal at City Hall. The parties previously had agreed to an Oct. 31 deadline to sign a development contract and related leases.

“This agreement will ensure that this development takes place in Bangor and should provide, once implemented, a minimum of $2.1 million a year for investment in our region’s economic future,” said Councilor Michael Crowley, who voted in favor of the agreement.

Mayor Nichi Farnham and Councilors Frank Farrington, Richard Greene and John Rohman also voted in favor of the deal, while Councilors Anne Allen, Gerry Palmer and Dan Tremble opposed them. Councilor David Nealley attended but did not participate because he is employed by Capital Seven.

“I’m glad this is behind us,” said spokeswoman Victoria Scott, mother of Capital Seven owner Shawn Scott.

“Now we’ve got to work hard on getting Question 2 passed,” she added, referring to the statewide referendum question seeking approval for slot machines at the state’s commercial harness racing tracks that voters will decide on Tuesday.

Capital Seven’s plan for the city-owned racetrack calls for the construction of a “racino,” the gaming industry’s term for a racetrack with slot machines.

The agreement both parties have ratified calls for construction of gaming, hotel and conference space – if Maine voters give slots the thumbs up.

The project would be carried out in two phases, with the bulk of the investment occurring in the second phase. The construction of the hotel, however, won’t occur until after Capital Seven’s gross revenues – income after payoff to players – hit the $60 million mark.

Shawn Scott, who was not at the meeting, has signed the agreements, said City Solicitor Norman Heitmann. The executed documents were provided to the city Wednesday.

Virtually all of the residents who addressed the council before Thursday’s vote opposed the deal, some because they believed the city could get a better deal if it took more time and others because they weren’t comfortable with Capital Seven.

State Rep. Patricia Blanchette, a former mayor and councilor speaking as a resident, said she had “very, very serious concerns” about the company.

“I think you’re buying a pig in a poke,” she said, adding that she’d done some investigating and had found some troubling information.

“There’s more to this than what the public’s been told – you know it and I know it,” she said, referring to the city’s background investigation of Capital Seven.

Among those who urged the city to hold off were representatives of Kehl Management Co. Late Wednesday, the Iowa-based casino management and development firm announced its interest in bringing a racino to Bangor Raceway. It promised the city a better deal than the one offered by Nevada-based Capital Seven, which has been pursuing the project for months.

In an announcement faxed to area media outlets late Wednesday afternoon, Kehl Management said it would invest $40 million – $10 million more than Capital Seven proposed in its negotiations with the city. During Thursday’s meeting, Kehl’s Bangor legal counsel, Edmond Bearor of Rudman & Winchell, noted that the city had not sought proposals from other potential operators. He said that because Capital Seven’s tentative developer status expired May 1 the city was under no legal obligation to commit to Scott’s company.

Dan Kehl, vice president of the family-operated Iowa company, attended the meeting to reaffirm his company’s interest. He asked the council to delay its decision and take some time to explore the proposal made by Kehl.

“We’d like to be there if Capital Seven is unable to fulfill its obligations to the city,” he said.

In the end, the council voted to authorize City Manager Edward Barrett to execute the agreements because the majority said it was the ethical thing to do since Capital Seven had invested so much time and money in the effort.

Capital Seven got the slot machine question on the Nov. 4 ballot through a citizen-initiated petition it organized.

Various companies owned by Scott have invested more than $1.5 million to allow slot machines to be installed at the state’s commercial harness racing tracks. Capital Seven executive Hoolae Paoa said that his company should be allowed to reap the rewards of its investment.

The slots bill that voters will consider on the Nov. 4 election ballot, or Question 2, requires both state and municipal approval before the machines can be installed at Maine’s commercial harness racing tracks. Bangor voters authorized slots in a citywide referendum in June.

Despite Capital Seven’s assurances that Bangor Raceway remained the site of choice for its $30 million entertainment complex, the company had been involved in negotiations with Brewer, where the company has bought an option on a backup site on outer Wilson Street.

The talks with Brewer had progressed to the point where Brewer officials agreed to put a referendum question seeking local approval for slots on the city’s Nov. 4 election ballot. As of Thursday, the referendum was still scheduled to take place.

Paoa confirmed that the company would comply with Councilor Anne Allen’s request that the company ask Brewer to pull the ballot question.

Paoa said he would discuss that possibility with local officials there and would follow up during a Brewer City Council meeting set for 1:45 p.m. today.

Capital Seven’s project also is contingent upon Scott’s obtaining a license from the Maine Harness Racing Commission. The commission had been scheduled to consider the matter on Nov. 10 but now will address it in mid-December.