BANGOR, Maine — City councilors largely have agreed that if and when a new arena complex is finally built, a private firm should be brought on board to manage it.
But when should the city start looking for management firms?
That question was posed this week by members of the council’s finance committee, who voted to schedule a council workshop in September to settle on a strategy.
“I believe that we should, at some point, interview firms and see what value they have beyond what we already have,” council Chairman Richard Stone said. “It seems to me that an outside firm would have a broader network to work with in terms of collaborating on events.”
In late June, councilors asked a newly hired architect and construction manager to design and price a 7,400-seat-capacity arena to replace the 50-year-old Bangor Auditorium. Colorado-based architect Don Dethlefs will work hand in hand with Cianbro Corp. of Pittsfield to formalize a plan similar to what was proposed in a market study commissioned last year.
Plans call for a U-shaped arena adjacent to the existing auditorium as well as new conference space and pedestrian bridges over both Dutton Street and Main Street to Hollywood Slots.
The schematic design is expected to come back to the City Council by mid-October, at which time the city will have firm cost estimates and can decide whether to put shovels in the ground or walk away.
Most councilors agreed that private firms should be brought into the discussion soon after the design is approved.
The current Bangor Auditorium and Civic Center is managed by Bass Park, a city-run department. Although it’s considered an enterprise fund, which means it generates its own revenue to support operating costs, the city’s general fund has subsidized auditorium operations to the tune of $450,000 to $500,00 every year, Finance Director Debbie Cyr said.
It has been that way for as long as she can remember.
“From what we’ve heard from consultants, any operation like this is expected to have a loss,” Cyr said. “But a private firm often has more contacts and more bulk purchasing opportunities.”
Councilor Cary Weston said the Hollywood Slots Waterfront Concert Series is a good example. Local promoter Alex Gray has worked with Live Nation, one of the largest concert promotion companies in the country, to bring big-name musical acts to Bangor. Without the backing of Live Nation, Gray probably wouldn’t have been able to draw Tim McGraw and others.
Weston said the same thing could happen with a new arena and civic center.
“What we’re talking about in terms of privatizing is not to make sure windows are locked and doors are closed but someone who can bring revenue. There is a big difference between promotion and production,” he said. “The revenue potential is not the concerts or single entertainment events. The revenue comes from conferences and meetings.”
Cyr said the city has experience with private management firms overseeing municipal operations. Republic Parking, a private company that manages Bangor’s parking garages and lots, is perhaps the best example.
The city has discussed privatizing the auditorium and civic center many times in the past. In fact, in 2003 Cyr said the city came extremely close to signing on the dotted line with a private firm, but that didn’t pan out.
Councilors said the timing could be right once a new facility is built.
“A new facility is certainly going to be more attractive than the current facility,” said Councilor Rick Bronson, who chairs the finance committee.
Weston said the idea of privatizing Bass Park could even include Bangor Municipal Golf Course, which sits on adjacent land.
If the city hired a private firm to manage a new arena and civic center, Cyr said it’s important to note that the city would be required to pay the firm an annual fee. Still, that likely would be less than the $500,000 the city commits each year to fund Bass Park operations.
Funding for a new arena has been the subject of consternation among councilors and some members of the public. Initial estimates from last year’s market study suggested that the proposed arena would cost at least $45 million to $50 million. A revamped civic center could add at least another $12 million to $15 million. More precise costs would be included in the schematic design.
To pay for a new arena, the city has about $8 million in the bank from Hollywood Slots proceeds and expects to borrow the rest and repay it through future slots revenue. Additionally, the city has contracted with Eastern Maine Development Corp. to help secure grant funding or private investments.
Recently, U.S. Sen. Susan Collins earmarked $1 million in a 2011 Transportation, Housing and Urban Development Senate Appropriations bill to help fund a new arena in Bangor.