HomeMy WebLinkAbout2003-10-07 Strategic Issues Committee MinutesSTRATEGIC ISSUES COMMITTEE
MINUTES -
October 7. 2003
Councilors Present: Anne Allen, Dan Tremble, John Rohman, Frank Farrington, Nichi
Farnham, Gerry Palmer, Richard Greene, Michael Crowley
Staff Present: Ed Barrett and Norm Hettmann
Others Present:
Meeting convened at 5:00 p.m
1. 5:00 p.m. Erewtive Session — lend Disposition — Negotiations with
Capital?
2. 5:15 p.m. Review of letter of Intent between Capital 7 and City of Bangor.
Barrett mid that staff would like to update the Committee on the most recent
version of the letter of intent between the CM and Capital 7. He indicated that
there are a number of conditions that need to be met; Capital 7 needs to exercise Its
option to acquire Bangor Historic Track, Bangor Historic Track must assume its
obligations under this agreement, and Bangor Historic Track would have to obtain a
harness racing license from Maine Hamm Racing Commission. There is a meeting
scheduled far November Id^ regarding the harness racing license.
Phase one is the continuation of the situation that the City has had with Bangor
Historic Track. The term would be for one-year, 2004, with an option for 2005. The
lease would remain the same, $35,000 in lease payments to the City. There is a
provision that there would be retroactive payment to the City should phase two be
implemented where the City would be paid 6% of the assessed value of leased land
per year if the video lottery terminals are installed and operated as is called for In
phase two. In phase one, Capital 7 did commit to spending a minimum of $100,000
for a master plan and Improvements to the exisdng track, grandstand and rating
support facilities. The City has the right to approve the project, and any work
should be completed prior to spring, 2004. They would pay property taxes on the
leased premises and the City would assist with any permitting required for
Improvements and cooperate with the master planning process. The City will agree
to recommend to the Hamess Racing Commission that Bangor Historic Track receive
a license for the 2004 racing season. There will be a continuation of the current use
for activities at Bass Park, including soccer, other uses of the infield and parking.
Barrett said that phase two would include the improvements that will be undertaken
should video lottery terminals be approved. This phase will begin when all of the
necessary approvals and permits are granted for the installation of at least 1,000
slot machines or the maximum number permitted by some law, whichever Is less,
and the actual commencement of the operation of slot machines at Bass Park.
Barrett said that the initial tens would be for ten years with four renew options if
the hotel is constructed, and two renew options if the hotel Is not constructed. With
the hotel we are tailing about a 60-year lease and without the hotel we are talking
about a 30-year lease. The lease area would be the track and associated areas
including the auditorium and civic center, and the Paul Bunyan Park. The property
would be leased at 6% of the assessed value annually. In addition the City would
receive a certain percentage of slot revenues/gaming revenues. Those revenues are
defined as the difference in the amount of money taken in less the amount of
money paid out. The minimum annual guaranteed payment is $1 million.
Capital 7 will commit to $30 million In capital Improvements for a gaming and
conference facility, 20,000 square feet of conference space with 7,500 square feet
of breakout space. Barrett discussed the benchmarks for Capital 7 building a hotel
and parking facilities. He noted that Capital 7 would pay taxes on the leased
premises and improvements. Barrett discussed the City of Bangor's commitment on
phase two such as assist in zoning, permitting and development issues.
Famham noted that Councilor Nealley was not in attendance due to his conflict of
interest.
Crowley asked the City Solicitor to give a timeline of the CWs engagement of
negotiations with Capital 7 over the past 14 months.
Henmann said that the City gave Capital 7 tentative developer status in
January/February 2003 with negotiations to be concluded by May 1, 2003. Once the
status was granted to Capital 7, City staff attempted to put together a meeting for a
round of negotiations. That meeting took 6-7 weeks to schedule. We were unable
W complete negotiations, however, Capital 7 still had tentative developer status.
The meeting was scheduled for shortty after the June referendum. We have drafted
a letter of intent addressing the concems that Capital 7 had. Heltmann said that the
time delay was mostly due to wading for Capital 7 to get back to the City.
Tremble wanted to know if the $60 million benchmark for hotels was an aggregate
sum or for one year. Heltinann said it was $60 million per year.
Heitmann noted that we have a draft letter of intent that has been revised. Capital
7 will discuss this with the Council in executive session to make recommendations
on what If anything should be clanged. This letter of intent should be made
available for Council consideration no later than the next City Council meeting,
October 15".
Farnham wanted to lam If Capital 7 would be present at the next Council meeting
to sign the letter. Heitmann said that his preference would be that Capital 7 send a
signed letter to the Council prior to the meeting.
The Council voted to go into executive session.
3. Executive Session — land Disposition — Negotiations with Capital 7