Slots parlor on track for ’08 opening Work stop threatened to delay project a year

BANGOR – A month after a financial impasse triggered a weeklong work stoppage at the site of a $131 million gaming and hotel complex, state and corporate stakeholders have their eyes on the finish line, at least when it comes to revenue sharing.

Penn National, the parent company of Hollywood Slots at Bangor, stopped construction at the 8-acre site across from Bass Park on May 8 in response to a pair of legislative proposals that called for using more revenue from the company’s slot machines as a way to balance the state budget.

Penn National operates 475 slots out of an interim facility in the former Miller’s Restaurant building just yards away from the construction site, but is authorized to run up to 1,500.

A week later, the Legislature’s Appropriations Committee officially killed the two slots revenue proposals as a show of good faith aimed at getting workers back on the job.

Penn National, in turn, resumed work, though company officials said they remained concerned about a similar episode occurring in the future.

With construction crews back at the site, the slots facility, parking garage and hotel complex is beginning to take shape.

Despite the week-long work delay, the project remains on schedule for a mid-2008 opening, Penn National spokesman Eric Schippers said Wednesday.

He credited this month’s progress to the state’s quick response to the revenue problem.

Had the matter not been resolved as quickly as it was, Schippers said, the opening of the new facility could have been pushed back by as much as a year, in large part due to the long lead times for ordering such critical construction material as steel.

To prevent similar problems from surfacing in the future, Gov. John Baldacci last week signed an executive order that would create a committee to review the tax structure for slot machine revenues.

The committee, which has the authority to call on other experts as needed, will report its recommendations to the governor no later than Dec. 1.

A bill has been submitted for consideration during the next legislative session to include the panel’s recommendations.

The executive order came after negotiations involving the governor’s office, the Legislature and Penn National Gaming Inc., which operates the state’s only slot machine facility.

“Our goal is to make sure Maine has the most effective tax structure possible for this citizen-approved venture,” Baldacci said in a press release.

“I don’t support gambling in Maine, and I don’t support its expansion. Nonetheless, we have an obligation to develop a regulatory environment that is predictable and stable,” he said. “The people have said they want this. We have to try to make it work.”

Schippers said Wednesday that the Pennsylvania-based racing and gaming company hopes the study will yield a more sound climate for the millions it is investing in Maine.

In fact, Baldacci’s executive order was enough to prompt Penn National to publicly reaffirm last week its commitment to the Bangor project, currently the largest economic development project in the state.

“We greatly appreciate the governor’s leadership on this matter and the support of Senate President Beth Edmonds, who is sponsoring the study committee bill, as well as legislators on both sides of the political aisle who have expressed their support for this initiative,” Schippers said.

“We believe the governor’s executive order … sends a strong message to our shareholders, as well as to our host community, our hundreds of current and future employees, the harness-racing industry, construction workers and all the beneficiaries in the slots revenue stream that this level of investment in a citizen-approved economic development project in Bangor is not only appreciated, but should have the benefit of a stable and predictable environment in which to operate,” he said.

“As a publicly traded company, we had a fiduciary responsibility to our shareholders to take a cautious approach in moving forward with an additional $131 million until we better understood the long-term risks involved with our investment,” he said.

The purpose of the Committee to Review the Taxation of Slot Machine Revenues is to seek ways to enhance stability for Penn National’s facility while providing the state and other existing statutory beneficiaries the same revenues that would be collected under current law, according to the governor’s office.