As a resident of Bangor for 23 years, I have been involved in a number of local initiatives related to construction and contracting. As a senior executive, I have also survived several recessions and learned a few things about risk management. The fact is that there is risk in any activity. Even doing nothing presents risk.
From that standpoint, and with some 40 years of construction-related experience, I have yet to see a project with such a low risk-benefit ratio as the Bangor arena.
The project and its genesis have been described in the Bangor Daily News, the pros and cons were perfectly presented in a Nov. 26 BDN editorial, and a conservative but convincing financial projection was made public by the city’s finance director.
What appears clearly is that the stars have gradually aligned over the past five years to allow Bangor to afford an impressive and useful project at the lowest possible cost under a guaranteed maximum price, which eliminates the major financial risks typically incurred by traditional projects. There is no risk of claims, a very limited risk of delays other than weather-related, and no legal expenses. This is because the team currently assembled by Cianbro has a proven track record. They built Hollywood Slots on time and under budget, they have reliable subcontractors, and they are more than well-acquainted with our area.
They are now prepared to start work on the Bangor arena, creating local jobs in the process. But if no decision is made very soon, they will have to move to other projects elsewhere.
The major argument I have heard so far from the project’s opponents is that there is still too much unknown and that, one way or another, there will likely be a shortfall that will have to be funded out of the taxpayers’ pockets. A rough estimate was presented during the Nov. 30 City Council workshop. The possible impact of a shortfall based on the revenues coming directly and indirectly from Hollywood Slots, and assuming no other funding source, was estimated at only 55 per mill, i.e. a $55 annual tax increase for a $100,000 property.
The bulk of the city’s direct revenues comes from property taxes. For the first time in years the residential tax base (45 percent of the total) is shrinking. Making Bangor a destination city by building the Bangor arena would inject more revenue into our local economy and help reverse the trend. Doing nothing would present for all taxpayers a risk much higher than 55 per mill.
Overall, the city’s conservative projections reasonably support a project scope of about $65 million as compared to $80 million for the entire project. The search under way to obtain additional funding will likely close the gap. If not, scope reductions such as dropping the Dutton Street bridge will be easy to make. Attempting to scare Bangor taxpayers with the threat of a potentially huge shortfall is unreasonable.
In fact, the current debate about the Bangor Arena illustrates the gap between people who make things happen and the ones who just wait for things to happen, even if to benefit from them. Entrepreneurs constitute the former category: They are the primary engine of America’s power.
Bangor entrepreneurs do their share despite a difficult business environment. It is the responsibility of our elected officials to keep building the momentum needed by our local businesses to make more things happen for everybody’s benefit and for the future of the younger generations. Some opponents might even enjoy riding the coattails of the venture.
Let’s move ahead and build the arena.
Gerard Tassel is a business consultant and a former trade councilor of the French government. He lives in Bangor.