BANGOR – A city councilor who has been a vocal critic of Bangor Raceway racino developer Capital Seven LLC and its owner, Shawn Scott, called Monday night for the resignation of a council colleague recently named the company’s executive vice president.

Councilor Anne Allen asked Councilor David Nealley to step down from his seat of three years because of the “muddy water” she said resulted from his dual roles as an elected official and as a corporate officer for Capital Seven.

Her demand for Nealley’s resignation came at the end of the council’s regular meeting, during the period reserved for city officials’ “good nights” and other tidings.

Instead of stepping down, Nealley sidestepped the issue.

After extending holiday wishes to fellow city officials and the meeting’s audience, Nealley discussed the hundreds of turkeys he and other Capital Seven representatives had handed out earlier that day to more than 300 area jobless people who turned out for the company’s Dec. 8 job fair. Capital Seven also distributed turkeys to several local charities, he noted.

The potential for conflict has some in Bangor, Allen among them, suggesting Nealley should choose between his job and his elective position. None of the other seven councilors present Monday reacted to Allen’s statement or joined in her call for Nealley to step down.

Nealley has consistently maintained that his position with Capital Seven did not affect his ability to perform his city duties, noting that the council dealt with dozens of matters each week that did not involve the racino, which he noted was among the biggest development projects the city has seen in some time and has the potential for bringing to the area some badly needed jobs. The region’s need for investment and jobs led to his decision to join Capital Seven, he said.

On Monday, Nealley noted that his uncle was looking for work and that until early this year, he was too. This did not escape the attention of his daughter, who has added the area’s jobless to her prayers. He said he hoped the community would “pull together” to help make the racino project happen. Nealley declined further comment on the matter after the meeting.

Allen was one of the three city councilors who were on the losing side of the council’s 5-3 vote on Oct. 30 to enter a $30 million development pact with Capital Seven, which is in the process of developing a racetrack casino that would mix slots, harness racing and year-round entertainment at city-owned Bass Park.

Critics of the city’s deal with Capital Seven say it was struck in haste, especially considering the late interest of other potential developers, including an Iowa-based competitor that proposed $40 million in improvements to the harness racing track at Bass Park and guaranteed the city a minimum of $1.5 million a year, both figures substantially higher than Capital Seven’s proposal.

Last month, Allen and Councilor Gerry Palmer lent their names to a petition seeking to undo the city’s vote to partner with Capital Seven. On Dec. 1, the council held a special meeting for the purpose of hearing presentations from the Iowa company and two others ready to step in should Capital Seven be unable to meet the terms of its agreement with the city.

On Dec. 2, Nealley suggested these actions might need to be addressed through legal action because they fly in the face of the city’s development pact with Capital Seven, which stipulates that the city will assist the company in its effort to obtain a racing license.

Since then, however, the results of a state investigation into Scott’s suitability to hold a state harness racing license, which he needs in order to bring his racino plan to fruition, have been made public. The findings have raised questions about Scott’s “moral character” and “financial suitability,” two key criteria the Maine Harness Racing Commission must consider during its licensing deliberations. Licensing hearings began last week in Augusta and will resume on Jan. 8.

“Since the 30th of October, it has become clear to the public as to why we opposed the agreement and why that agreement fell short of the best interest of the public,” Allen said Monday night. “And since October, the community and region [have] witnessed a real erosion in the public’s perception of the council’s role as a protector of the public interest.”

Consequently, Allen said she saw a need for a “cleansing process to restore the integrity of the council. … The first step in that long road should be a decision by Councilor Nealley to step down from the City Council. To threaten to sue the city on one hand then undertake a councilor’s responsibility on the other hand defines muddy water at best,” she said. “I believe that Councilor Nealley should step down to restore integrity to this council.”

Though it has led to some concern and an internal struggle for the nine-member council, Nealley’s post with the racino developer is not prohibited by the city’s ethics code. Nealley has complied with all aspects of the code, disclosing his financial interest in the racino project and relationship with Capital Seven.

Since his fellow councilors determined he has a conflict of interest, Nealley has not participated in deliberations or votes related to the project or represented or negotiated for Capital Seven in its dealing with the city.