April 25, 2018
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Final decision looms on proposed Bangor arena

By Eric Russell, BDN Staff

BANGOR, Maine — Discussion about a new arena in Bangor has dominated City Council meetings, workshops and coffee-shop chatter for the better part of three years, and even longer for some.

But as the project moves from abstract market studies and projections to specific design ideas, councilors soon will have to decide whether or not to put shovels in the ground.

At a meeting Thursday, Nov. 18, with project architect Don Dethlefs and construction manager Norbert Young of Cianbro Corp., councilors will finally learn the firm cost of a proposed arena and renovated civic center.

“We’re going to have to move on this one way or the other relatively soon,” said council Chairwoman Susan Hawes, who has been a steadfast champion of a new arena. “The sense of the council right now is, let’s hear what they have to offer.”

To date, the city has committed to nothing. But while councilors may not make any decisions next week, they finally will have all the information they need to either move forward, reassess their options or scrap the idea entirely.

Thaxter Trafton, commissioner of Maine’s Department of Economic and Community Development and former president of the NBA’s Cleveland Cavaliers, has decades of experience managing arena complexes and has followed the debate in Bangor.

“If it’s done, without question it will be the best facility in the state for a wide variety of events,” he said in an interview this week. “I think what scares taxpayers is building a white elephant. The city needs to build something that will be utilized often. You can put a brand new car in someone’s driveway, but if they drive it once a month, they aren’t getting their money’s worth.”

Up to speed

Councilors all agree that the existing Bangor Auditorium is living on borrowed time. Built in 1955 for about $1.2 million, the longtime high school basketball mecca and underused event center is no longer a draw. The Bangor Civic Center, which was added in 1978 for about $1.5 million, also has deficiencies.

The roof of the main building leaks. The heating and cooling systems are inefficient. The kitchen facilities are inadequate. Bangor Convention and Visitors Bureau director Kerrie Tripp has said she loses events every year because the civic center lacks certain amenities, such as top-notch kitchen equipment.

For more than a decade, the city has considered replacing the auditorium or renovating the building, but movement always stalled.

Two years ago, the City Council, led by Hawes, created an arena implementation committee to study options and come up with the best plan to push the project forward. In December 2008, then-council Chairman Gerry Palmer unveiled a sign inside Bass Park signifying the “future site of new arena complex” and announced an ambitious groundbreaking date of 2011.

Then the economy continued to flounder and councilors grew more cautious. They voted to hold off on commissioning a new market study, but eventually overturned that decision after public outcry and pressure from the business community.

In April 2009, the city hired ERA/AECOM of Chicago to conduct a study, and in August of that year, the consultant presented the city with recommendations to build a 5,400-fixed seat facility, expandable to about 7,400 seats. Current auditorium capacity is about 6,000 but is not expandable.

The arena implementation committee spent weeks poring through the study and created its own set of recommendations for the council by December. It’s been in the council’s hands ever since.

Earlier this year, the council took another step by hiring architect Don Dethlefs of Colorado and local contractor Cianbro Corp. to come up with a schematic design and price the project.

The latest plan expands the number of fixed seats to 5,800 and bumps the maximum capacity with general admission seating to 8,050. The project also would demolish the existing civic center, rather than renovate that space, and build new meeting space in a building that would connect to a new arena and, potentially, a sky bridge over Main Street. The existing auditorium would be retained and renovated into convention space.

All along, councilors have been thoroughly impressed with Dethlefs’ design but wary of its cost. They are hopeful that by choosing Cianbro as general contractor, they not only get a well-respected construction firm but perhaps a hometown discount, too.

Funding scenarios

If money were no option, an arena would already have been built.

Initial estimates from a market study conducted last year suggested that a new arena would cost at least $45 million to $50 million. If the city also decided to renovate and expand the Bangor Civic Center, that could add at least another $12 million to $15 million to the project’s cost.

However, until Cianbro gives the city a firm number to work with, supporters and opponents can only discuss hypothetical situations.

Here is what is known about finances:

As host community, the city receives 3 percent of net revenue and 1 percent of gross revenue from Hollywood Slots. To date, Bangor has banked just under $10 million. Based on projections of future Hollywood Slots revenue, the city can expect to earn between $2.5 million and $3 million each year.

If the city borrowed $60 million over a 20-year period at 3.5 percent interest — a realistic estimate based on current lending rates — the annual debt service would be about $4.2 million. If the city borrowed the same amount over 30 years, the annual payment would be about $3.2 million, according to municipal finance borrowing formulas.But because there is money in the bank, the city could apply $8 million from its reserve as a down payment and borrow $52 million over 20 years. That would cut the annual payment to $3.6 million for 20 years or about $2.8 million over 30 years.

It’s important to note that whatever number Cianbro provides the city next week will not include soft costs for items such as furniture, fixtures and other equipment and will not include future operational costs, according to city finance director Debbie Cyr.

Some of the project’s pieces are optional as well. A pedestrian bridge over Main Street is not essential, but Dethlefs said it could act as a gateway into the city and could provide opportunities for cross-business between an arena and Hollywood Slots.

Many are certain that other funding sources will emerge once the project gets going. Earlier this year, Bangor entered into a two-year contract with Eastern Maine Development Corp. to help the city secure additional funding to support the construction of a new arena.

So far, EMDC President Michael Aube has landed at least one commitment — a $1 million earmark from U.S. Sen. Susan Collins into a 2011 appropriations bill — but he’s confident more interest is out there.

Still, some councilors have grown increasingly concerned that, while a new arena would be tremendous for the city, it might also be too expensive.

“What we hear most is that there is incredible support for a new arena, but the city cannot afford it if it means raising taxes,” Hawes said.

Possible opposition

Some residents have grown restless as well. One local resident, upset with what he calls the council’s lack of financial prudence in debating a new arena, has taken his frustration public by creating a website and trying to drum up support for a citizens referendum vote.

At www.bangorarena.com, city resident Steve Sleeper alleges, “The Bangor City Council has started the largest construction project in [Bangor’s] history. They have spent taxpayer money hiring consultants, engineers, architects and contractors without a full vetting and approval by the taxpayers.”

The site lists a variety of facts about the projects and some of Sleeper’s own assessments. It also features recent correspondence between Sleeper and various city councilors.

Sleeper’s site also includes an electronic copy of last year’s market and feasibility study. He said the biggest revelation in that document is that the city cannot afford to build an arena and renovated civic center with slots revenue alone.

Opponents also are concerned that, although the city has committed nothing, it has spent $75,000 on a market study and more than $500,000 for the services of Dethlefs and Cianbro.

Some councilors, notably Geoff Gratwick, have supported the idea of a nonbinding voter referendum. Hawes and others have said citizens have nothing to vote on yet.

Predicting the future

Trafton said using Hollywood Slots revenue is a great way to finance the project, but he acknowledged some inherent risk. That risk could be compounded once a recently approved casino in Oxford County is off the ground.

Debate varies over what impact another casino could have on the success of Hollywood Slots, but a lot could hinge on whether the Bangor operation is able to add table games.

Other variables remain unknown as well.

If the arena is built, councilors have said they would hire a private firm to manage it. 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 $500,000 every year.The total operating and maintenance budget for Bass Park is just over $2 million.

Bringing in a well-respected, connected firm to manage a new facility is less about making sure the lights are turned off and more about generating revenue.

The Hollywood Slots Waterfront Concert Series may provide a good model. Local promoter Alex Gray 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, the series might not have been successful.

Cianbro is another wildcard. The well-known local firm built Hollywood Slots and its adjacent hotel, and many feel CEO Peter Vigue could be a powerful spokesman for the project, particularly in trying to gain private financial support.

Aube with EMDC said potential investors need to see a firm commitment before they are willing to commit, and Hawes agreed that the city has to take the first step.

“At some point, there will need to be a certain leap of faith, but how high can we leap?” Hawes said.

Aube said he is prepared next week to discuss an economic impact analysis recently conducted by a private “friends” group led by Miles Theeman, head of Affiliated Healthcare Systems, and former Bangor Daily News editor Mark Woodward.

“This is a tipping point for the city in terms of re-establishing itself as the regional leader and gateway to eastern and northern Maine,” Aube said. “But we need to show the public that the impact is real.”

Added Trafton: “The market is here. The summer concert series proved that. But it takes aggressive people that know the business to make it work.”“This is a tipping point for the city in terms of re-establishing itself as the regional leader and gateway to eastern and northern Maine. But we need to show the public that the impact is real.”

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