Racino headed to council Penn National’s future: Board to weight permanent slots facility

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Negotiations concerning a Pennsylvania-based gaming and racing company’s plans for a $70 million-plus racino across Main Street from Bass Park in Bangor are on the verge of completion.

A series of votes relating to the deal will appear on the agenda of the next regular City Council meeting, set for 7:30 p.m. Monday at City Hall, city officials confirmed Thursday.

Penn National Inc.’s gambling complex, which will house at least 1,500 slot machines, is proposed for the Riverside Block, which encompasses the land between Lincoln and Dutton streets from Main Street to the railroad tracks.

The permanent racino would replace the company’s temporary facility, Hollywood Slots at Bangor, which opened in November in the former Miller’s restaurant on Main Street. Construction is slated to begin next year. If all goes according to plan, the new complex, including a parking garage, restaurant and retail space, will open in 2008.

Penn’s off-track betting operation, now operated out of the grandstand at city-owned Bangor Raceway, also would be housed in the new facility.

Company representatives said this week that they are optimistic the deal will be completed next week.

“I think everything is looking really good,” Penn National spokesman Eric Schippers said Thursday in a telephone interview. Schippers and Steve Snyder, Penn National’s senior vice president for corporate development, are among the company officials who plan to attend Monday’s council meeting.

“Everyone is working really hard to put the pieces of the puzzle into place,” Schippers said. “It’s been a very complex acquisition with a lot of moving parts.”

“We’re looking forward to a vote in the affirmative, and we are looking forward to getting the [permanent racino] open in 2008,” Jon Johnson, general manager for Hollywood Slots at Bangor, said Thursday.

Bangor officials were confident the six-way deal would go through, but cautioned that when it comes to negotiations, anything can happen.

“It ain’t over till it’s over,” council Chairman John Cashwell said Thursday.

“Ask us Monday night after the meeting,” City Solicitor Norman Heitmann said.

Most of the land Penn National is arranging to buy is occupied by the Holiday Inn-Civic Center, owned by Mahaney Properties, now owned by Kevin Mahaney, son of the late Bangor businessman Larry Mahaney, who died in February.

Larry Mahaney had negotiated an option on the adjacent Main Street Inn, but the option expired March 31, and Penn National wound up dealing directly with its owner, Chiou Lin of Hampden.

The hotel properties, across the street from Bass Park and Bangor Raceway, are among the few commercially zoned properties both large enough to accommodate Penn’s proposed 150,000-square-foot permanent facility with an attached multilevel parking garage and within the 2,000-foot radius of Bangor Raceway defined by state law.

Once the deal goes through, the inns and two houses will be razed to make way for Penn’s project.

Penn and the city also have been working to resolve lease issues with some of Mahaney’s tenants: Remax Advantage, a real estate firm, and Pella Windows and Doors.

The racino deal, which will involve Penn National buying property on Main Street and conveying it to the city, has been the subject of numerous closed-door negotiating meetings conducted by the City Council over the past several months.

Though the parties involved had hoped to close the deal by the end of last year, negotiations took several months longer than anticipated, largely because of its complexity and the number of parties involved.

City Manager Edward Barrett said the racino development project has been among the most complex he’s seen since assuming his position in 1988.

“The only thing that’s even come close is the Shaw’s [Supermarket] project on Main Street,” which involved cleaning up a contaminated former gas works site and acquiring some adjacent land through eminent domain.

Six months after its opening, business continues to be brisk at Hollywood Slots.

The monthly gross wager, which started at $28.5 million last November, stood at $43.9 million at the end of April, according to financial data tracked by the Maine Gambling Control Board.

As of May 15, the state had received almost $8 million in taxes.

As host city and as one of numerous slots beneficiaries set out by state law, the city of Bangor’s share of the proceeds has surpassed the $500,000 mark and is projected to exceed $1 million by the end of the racino’s first full year of operation, according to information provided by city finance director Debbie Cyr. Though some of the terms were not available Thursday, Barrett and Heitmann said some key points of the development and lease agreements councilors will consider Monday include:

. A minimum project investment of $70 million with construction beginning within 24 months and ending no later than 24 months after that.

. A minimum of 1,000 slot machines.

. An initial land lease of 15 years with three 10-year renewal options.

. Annually adjustable rental payment for the harness-racing and related facilities at Bass Park. Rent would start at $104,000.

. The construction of a hotel, a requirement in the original development agreement Penn National took over from its predecessor, Capital Seven LLC of Nevada, now is optional. With two hotel developers currently competing for the right to build at Bangor Waterfront, “we’re no longer as concerned about that,” Barrett said.

. A provision allowing Penn to reconsider the project should the political climate surrounding gambling change to the point where voter approval for slots is withdrawn.

Also on Monday, Hollywood Slots is up for the first annual renewal of its city slots license, Heitmann said.