City panel OKs racino fund transfer

BANGOR – Though they agreed that the expense was a legitimate one, city councilors who met Monday as the finance committee expressed concerns about raiding the city’s recently established racino revenue fund.

City councilors established the fund last October, about a month before Penn National Gaming Inc. opened a temporary gaming facility featuring 475 slot machines.

Hollywood Slots at Bangor eventually will be replaced by a larger gambling complex with up to 1,500 machines. That facility will be built on the so-called Riverside Block across Main Street from Bass Park.

The idea behind the racino revenue fund was to account for the receipt and use of the slot revenues, and to set priorities for using the funds.

According to city policy, the racino income is to be used primarily to replace the aging Bangor Auditorium and Civic Center.

But it also could be used for: costs related to keeping the current auditorium going until the new one is built; reimbursing the city for costs tied to attracting and locating the racino in Bangor; and funding expenses resulting directly and solely from the operation of slots in Bangor, such as additional police personnel, if needed.

At issue Monday was a staff recommendation that $291,000 be transferred from the city’s racino revenue fund to the Economic Development Fund. The figure reflects the market value of a city-owned parcel being conveyed to the owner of part of the Riverside Block, less Penn National’s share of the cost.

Councilor Gerry Palmer said that the expense was legitimate, but worried that the racino revenues might be raided for uses that don’t help advance the proposed arena, which a city consultant projected would cost about $40 million.

The council needs to keep an eye on the fund and how it is used, “because this city needs a new arena 30 days ago,” Palmer said, pausing between each word for emphasis.

“The building we have now has been obsolete since the day it was built,” he said.

Though he noted that the more than 50-year-old facility was an “excellent” venue for basketball tournaments, it was lacking when it came to “everything else,” including handicapped accessibility.

Councilor Susan Hawes agreed.

“We need to guard dog that fund,” she said.

“The concern you all have is a concern that staff shares,” finance director Debbie Cyr said. That is why the city developed the racino revenue policy that councilors adopted last fall, she said.

According to a background memo for councilors, the money being transferred would reimburse the city’s economic development fund for expenses connected to a three-way deal among the city, the Penn National Gaming Inc. subsidiary Bangor Historic Track Inc., and Chiou Lin, the owner of the Main Street Inn.

The fund needs to be replenished because the city is gearing up to build infrastructure connecting Maine Avenue to Venture Way this year.

The inn and two houses Lin owned behind it were torn down this summer to make way for the $70-million-plus gambling complex the Pennsylvania-based racing and gaming company is developing across Main Street from Bass Park.

Penn National and the city have agreed to split the cost for acquiring Lin’s property. The city further agreed to convey to Lin 4.65 acres in the city’s Maine Business Enterprise Park off Maine Avenue.

If all goes to plan, design work on a replacement for the auditorium and civic center would start by about 2010, with construction beginning two years later, City Manager Edward Barrett said earlier. The project will cost an estimated $40 million, according to a consultant the city hired several years ago.