BANGOR, Maine — A final market report outlining projected costs for a new arena in Bangor suggests that the city cannot afford to build both an arena and updated civic center if the only funding source is revenue from Hollywood Slots.
The report states that a proposed 5,400-fixed-seat arena (expandable to a maximum of 7,400 seats) and lobby, along with supportive improvements such as a bridge over Main Street, would cost an estimated $57 million. That’s just for phase one.
A second phase, estimated at $16.6 million, would overhaul the existing auditorium and civic center.
Financial projections included in the report reveal that if the city decided to approve both phases, it would accumulate more than $20 million in debt over the next 20 years unless funding sources other than the racino emerge.
Basically, the city would have to borrow money to pay for the project and then make payments out of the racino fund over the length of the loan. Assuming the Hollywood Slots revenue projections are correct and assuming interest on a loan, there wouldn’t be enough money to cover the costs of both phases.
Earlier this year, the city hired two firms, ERA/AECOM and Sink Combs Dethlefs Architects, to assess the Bangor market and provide recommendations to the city on what size arena it should build. The final report, which firmed up the costs associated with those recommendations, will be reviewed Thursday by members of the city’s arena implementation committee.
Any decisions by that committee will need to be approved by the City Council.
“I have said all along, and others have, too, that I don’t personally want to see any debt put on the citizens of Bangor,” City Council Chairman Richard Stone said Tuesday. “I would only support what we could realistically afford.”
The 135-page report proposes a U-shaped, 160,000-square-foot arena that would be built into the sloped hill behind the Paul Bunyan statue. It would house the traditional 85 by 200 feet of floor space and include an updated lobby.
Additional suggestions included a pedestrian sky bridge over Main Street connecting a new facility to the parking garage at Hollywood Slots, a similar bridge over Dutton Street connecting to the parking area at Bass Park, and other minor improvements to the site. The total price now is estimated at $57 million.
The second phase would renovate the existing auditorium and civic center as conference and meeting space to the tune of $16.6 million, totaling $73.6 million for the entire project.
The city of Bangor gets a portion of the racino’s proceeds and has put the money aside in an account. Right now, about $6 million sits in the account. Some city councilors and members of the arena implementation committee have been hopeful that private contributions would emerge, but so far no one has stepped forward. No one has publicly suggested that taxpayers subsidize any portion of the costs of a new arena.
“We hope [other funding sources emerge], but we’re not holding out hope,” Stone said. “We have to assume we’re going to do it on our own.”
Depending on how a new arena complex is marketed, there could be revenue streams once it’s built, but that’s no guarantee, according to the consultants who have said facilities such as the one proposed rarely operate with a surplus.
The consultants’ report does outline some alternate funding scenarios that involve bonding the project over a longer period of time (30 years instead of 20), but Cyr said that’s not an effective option because it would just mean more interest. Another option is delaying phase two until 2018, when the city would be in a better position to afford it.
The most interesting debate Thursday could be how quickly the committee and the City Council want to move based on the recommendations. One of the consultants to city staff said two months ago that the longer Bangor waits, the more the project’s costs could rise.