Proponents of the proposed new Bangor arena have not revealed all the facts about the $65 million project to be partly financed by revenue from Hollywood Slots. Many statements have been exaggerating the benefits and downgrading the risks of the plan.
Two economic impact reports — the ERA/AECOM report of December 2009 and the Eastern Maine Development Corp. Economic Impact Analysis of October 2010 — Maine Gambling Control Board data and documentation from the city finance director were used as research for this column. These sources contain details that Bangor residents should know before they vote on May 4.
Proponents have stated the arena will generate 400 permanent new jobs, but this is misleading. In fact, according to the economic impact report, these so-called “new” jobs actually represent full-time equivalents — a combination of part-time, seasonal, and event-related jobs — not 400 individual full-time jobs.
Many of these will not be within the city of Bangor. The report states that the project will result in only 20 full-time jobs associated directly with the facility and 298 jobs — many of them part-time — as a “direct” result of the new arena. The report also assumes 107 jobs from “indirect” impact of the arena.
Proponents have stated that the arena will result in $26 million in new spending, the actual amount stated in the report is $17.1 million of direct spending. The balance of $9 million will actually be “indirect spending,” assumptions that employees hired by local businesses will spend their wages in the regional economy.
Also according to one report, the facility’s operating deficit is estimated to range from $225,000 to $520,000 per year. It is a given that Bangor’s tax-paying residents are expected to subsidize this deficit, as they do with the current facility. There is no plan for the arena to be self-sustaining. This is separate from the bond obligation on the debt.
Bangor’s finance director has documented that the city of Bangor currently has bonds totaling more than $96 million for pensions, sewer and municipal projects. The arena cost projection will bring the total city bond indebtedness to $153 million.
For the arena debt, the only private revenue is from Hollywood Slots, which, even with rosy projections of increasing revenue, will be insufficient to make those payments. Problematic to this plan is a local and national trend of declining revenue in casinos and there will be increased competition of additional gambling casinos in Maine.
The TIF funds (property tax dollars) are already needed to make up the difference in the current shortfall. Those funds dedicated to a 30-year bond payment will no longer be available for the previously planned purposes of the less glamorous expenses of city projects. The taxpayers will likely absorb those expenses intended for the TIF funds. And should either of these sources become insufficient, taxpayers will be responsible for the debt payment.
There’s no doubt that Bangor residents desire an event facility they can be proud of and most understand that the current facility is not up-to-date. One of the reports proposed doing the project in phases.
Perhaps it would be wiser to postpone building the arena and to spend $25 million to $30 million (a bond which could be fully financed by the Hollywood Slots current revenue) for a new convention and meeting facility. Large meetings and conventions are the types of events that keep people in the area for several days, resulting in a higher impact on the regional economy than the one-night entertainment or sports events that would take place at the arena.
Residents of Bangor need to consider the facts regarding the arena as currently proposed. This is not the highly beneficial or low-risk proposition it has been portrayed to be.
We hope you join us in voting “NO” on May 4.
Linda Thomas works at a Bangor hospital. Pauline Civiello is an office manager at a small business in the city. Both live in Bangor.