Big-name private management firms want in on proposed Bangor arena

Posted March 28, 2011, at 6:35 p.m.

BANGOR, Maine — Two well-known and well-connected private management firms are pushing hard to position themselves prominently if and when Bangor voters approve a new $65 million arena and convention center project.

SMG and Global Spectrum, each headquartered in the Philadelphia area, indicated recently that they have strong interest in managing a new facility in Bangor. Both are expected to submit proposals to the city soon.

“We intend to compete and compete hard,” Frank Russo, senior vice president of business development for Global Spectrum, said in a telephone interview last week.

Harry Cann, senior regional vice president for operations at SMG, said in an e-mail that his firm has had an eye on Bangor for many years, and he called smaller, secondary markets like Bangor SMG’s “sweet spot.”

Other national management firms could emerge in the coming weeks as the city seeks formal proposals.

So why are the big boys interested in Bangor, a city of about 33,000 people in the northernmost corner of the Eastern Seaboard?

Both Russo and Cann said Bangor has demonstrated that it’s a viable but underserved market and a new state-of-the-art facility — aggressively marketed — would allow the city to compete against any other community in the region.

The benefits of a private management firm are many, they say. Companies such as SMG and Global Spectrum have a broad network of industry contacts to draw to from, have the ability to block-book events with other facilities they manage and bring name-brand leverage to a city that is trying to re-establish itself.

City Councilor Rick Bronson, who has decades of experience promoting concerts and other events in Bangor and beyond, said private firms have never been interested in the existing facility.

“That they have interest in a new facility is certainly good news for Bangor,” he said.

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The current Bangor Auditorium, built in 1955, and the Bangor Civic Center, built in 1978, are managed by Bass Park, a division of the city of Bangor. Bass Park Director Mike Dyer and his small staff are in charge of operations at both facilities, including marketing them to the world.

Councilors have long said that the city should get out of the management business and turn the facilities over to professionals. With the existing structures, interest has been minimal, but a new building would change that.

“We believe Bangor already has tremendous assets that provide a base for an outstanding downtown destination,” Cann of SMG said. “A new multipurpose venue would complement the assets that already exist and provide an anchor for further development of the destination.”

The city only recently began seeking requests from private management firms, including SMG and Global Spectrum, but the process is on hold pending a citywide vote. Citizen petitioners successfully gathered enough signatures to force a referendum that will ask residents whether they support the construction of a new arena complex in Bass Park.

Among the things voters should consider on May 4, according to Bronson, other councilors and a large group of community supporters, is the interest that has been generated simply by the prospect of a new facility.

The city actually came close to hiring a management firm in 2003, when a new arena and civic center were first proposed. Councilors narrowed a list to three finalists — SMG and Global Spectrum, along with Compass Facility Management Inc. of Ames, Iowa — but broke off negotiations in the eleventh hour.

If voters approve the project in a little more than a month, councilors likely will move fast to bring a management firm on board.

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The City Council’s stated goal has been to have a private management firm in place before the first shovel hits the ground. Ideally, that firm would work closely with architect Don Dethlefs of Colorado and construction manager Cianbro Corp. of Pittsfield to build a facility that meets a variety of needs.

Dethlefs and representatives from Cianbro already have advised the council to bring in a management firm soon, and officials with SMG and Global Spectrum said that they would be interested in signing on as soon as possible.

“It’s extremely valuable to be involved early,” Russo said. “We’re not architects or engineers, but we can provide input on things that will allow maximum usage of the facility, which is what everyone wants.”

Hiring a private management firm would put Bangor in rare company. The Augusta Civic Center is managed by the city of Augusta. The Cumberland County Civic Center in Portland is managed by the county.

The Androscoggin Bank Colissee in Lewiston is operated by Firland Management, a small firm that manages that facility and four others in New York and Michigan.

By comparison, SMG and Global Spectrum manage about 300 arena complexes between them.

Perhaps the best comparison for what Bangor has proposed is the Tsongas Center in Lowell, Mass. Built in 1998 as a collaboration between the city of Lowell and the University of Massachusetts System, the Tsongas Center has been privately managed since its inception, first by SMG and more recently by Global Spectrum. The facility has been home to a minor league hockey team and also hosts all University of Massachusetts-Lowell men’s ice hockey games.

Adam Baacke, Lowell’s assistant city manager, said if he were asked whether the Tsongas Center was strictly a moneymaking endeavor, he would answer no.

“The reasons why they are important are difficult to quantify, but essentially they bring people to the city for positive reasons,” he said. “Certainly, that has happened in Lowell.”

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Bangor’s proposed arena calls for 5,800 fixed seats with a maximum capacity of 8,050 for concerts and other events. The convention center would replace the existing civic center and would include a variety of meeting spaces and a much-needed industrial kitchen.

To pay for construction, Bangor is counting on revenue generated from Hollywood Slots and a portion of the annual downtown development tax increment financing funds. Additionally, a group of local business and civic leaders has formed to explore private funding streams.

Russo with Global Spectrum and Cann with SMG said the presence of Hollywood Slots certainly makes Bangor more attractive.

The project’s estimated construction cost of $65 million does not take into account annual operational costs. The Bass Park budget now is considered an enterprise fund because it generates its own revenue to support operating costs. However, for many years the city’s general fund has subsidized Bass Park operations to the tune of $450,000 to $500,000 annually.

If a private firm is brought in, the city would pay an annual fee, but operational losses likely would be considerably reduced because a new facility would attract more events, according to industry officials. Because Bangor does not have an anchor tenant , having an established contact in the entertainment industry would be crucial.

Both SMG and Global Spectrum indicated that they would retain some or all of Bass Park’s existing staff if they were hired to manage new facilities. Dyer has said he and his staff will roll with whatever changes come their way.

The city has some experience with private management firms in other areas of municipal government, notably Republic Parking of Chattanooga, Tenn., which has been managing Bangor’s parking garages and public parking lots since 1996.

Russo and Cann said they would envision a partnership, but the city ultimately would retain ownership and bottom-line control over a new arena and convention center.

Both will be keeping a close eye on Bangor’s election results in early May.

Editor’s Note: Bangor Daily News publisher Richard J. Warren is a member of the steering committee for the Friends of the Maine Center, a group of area civic and business leaders backing the arena proposal.

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