Loading...
HomeMy WebLinkAbout2009-02-18 Business and Economic Development Committee Minutes � � BUSINESS AND ECONOMIC DEVELOPMENT COr�IlvII'I"TEE Feb. 18,2009 � � Minutes Councilors Present: Blanchette, Bronson,D'Errico, Gratwick,Hawes,Nealiey,Palmer � Stone and Wheeler Staff Present: Ed Barrett,Rod McKay,Debbie Cyr ' Others: Jon Johnson—Hollywood Slots;Members of Arena Implementation Committee; Members of Bangor Chamber of Commerce;Kerrie Tripp—CVB&member of Arena Committee;Peter Baldacci Penobscot County Commissioner;Charley Birkel(Bangor resident); Brad Ryder,Epic Sports&member of Arena Committee. . � CONSENT AGENDA � I. 2nd Readin�at 2/23/09 City Council Meetin� � Appropriating a$675,000 Grant from the Maine Department of Economic and � Community Development's 2008 River&ont Community Development Bond Program 2. 2°d Readin�at 2/23/09 Citv Council Meeting ' Appropriating a$257,250 Grant from the Department of Housing and Urban � Development Economic Development Initiative Program � A motion was made and seconded to approve the Consent Agenda as presented. So voted. � 3. Cultural Commission—Grant Request from the Bangor Folk Festival for partial funding of the 2009 American Folk Festival,August 28-30, 2009 � This item was discussed at the preceeding the Finance Comrnittee. A motion was made and seconded and passed to recommend City Council approval. ' REGULAR AGENDA (Items were taken out of order) � 4. Arena Mazket&Sizing Study At the BED meeting on Feb. 4,the majority of the councilors decided to put the � arena mazketing study on hold for Cr9 months in order to gain a better insight as to where the economy is going. The remaining councilors felt holding off to be closer to the start r date of actual work might be appropriate to insure that if a study was done it would not . have to be redone at a later date. It was also requested that staff come back to the council � and outline alternatives for direction in the future. Barrett stated that the Special Committee on Arena Implementahon would hke to see the construction start date be either 2011 or 2012. Cash reserves will ha.ve to be � , � �� developed in advance of construction;the estimated cost of a new study is in the$75,000 � range. The council can,at any time,decide to abandon the project should they determine the project is not feasible. If it was decided to either,in the long-term,put it on hold or to abandon a new building,we would have to figure out what we wanted to do. Options � would be to continue to operate the current facility and invest only what was necessary to maintai.n its operations-this would not be the most optimal solution due to the e�ent we cuirently subsidize it,or we could look at closing the£acility or renovating and expand the existing building. A 1999 study estimated that it would cost$12.3 million to do ` significant renovations and expansions;using that number and inflating it up to toda.y's numbers if would be in the$18—20 million range. � Cyr reviewed the financial projections stating that the one thing held constant is the construcrion design cost of about$60.million;for consistency purposes she has continued to use that figure. She further reviewed the associated.costs of build.ing a new azena such as the study,design,demolition of the existing facility and construction of a , new buildi.ng. All projections show that sufficient cash needs to be built up so to be available in the years when the debt service begi.ns.and exceeds what we project for � revenues coming from slots. The other basic assumption on the expense side is that we will pay as you go for some of the up-front costs specifically related to design and any other ancillary costs up-front as well as demolition at the back end. We would only bond � $52.8 million. All estnnates are based on being fairly conservative. The City has always looked at the Racino revenues only as a means to finance this project. It has not factored in whether or not we would be able to obtain any ki.nd of partnership money from private � or public sources or any taxpayer general fund support. Discussion continued on issues such as what parameters should be contained in the RFP.Barrett stated that if we proceed at this point we could do so on the basis of the � responses that we received from the previous RFP—also make sure a couple of things aze done such as that the respondents to the RFP look at renovating the existing facility;and also look at specifically the financial projections that Debbie has put together in order to � do a risk analysis that takes into account how comfortable we should be with those as a basis to make a decision. All of the companies that had responded to the previous RFP have very strong financial capabilities to do that kind of analysis. ' Wheeler read a one page summary he put together on tlus subject that was discussed at the previous BED meeting. He also asked that it be a matter of record that there is no disagreement in his perception among the members of this Council that � Bangor needs a new entertainment/sports and meeting facility. He indicated he was ' willing to proceed with the market study immediately with the specific pazameters pertaining to maximum affardability and future naarket conditions clearly specified. But � there is one condition,that if,before ground breaking occurs,it becomes evident that a further study must be done,that study should not be paid for out of the racino funds but by the Chamber of Commerc�and its 800 members. It is,after all,those members who , stand to profit most by a new arena and convention center. I think this is fair;I will not spend the taxpayers dollars twice to do the same thing. This is my position and it will not change for the 20 months of my remaining term on the City Council. � Johnson stated there aze many questions that cannot be answered without going ahead with the market analysis. He added that the current basketball tournaments,for example,have resulted in the local hotels being extremely busy as well as Hollywood � . , � � Slots. This is the type of crowds that Bangor can attract-there is no doubt there is demand for it. He requested that the Council re-consider its position and move ahe�d � with the marketing analysis. Nealley stated tha.t a State bond package may be possible to help complement what Bangor is doing on the azena project. Also,if the Chaznber of Commerce would � lobby for this bond package,so that the State of Maine comes to the table as a partner with the City of Bangor in funding,this could be the right time. , Jahnson assured the Council and Committee members that Hollywood Slots will � be remaining in Bangor as a business entity—you don't invest$138 million and not stay. Even in this economic climate,Hollywood Slots' numbers are up 2Q%. Their slot revenues aze up yeaz after year as well as the tax money that was ear-marked to fund the � arena project. Hawes asked the Council if there is any interest in revisiting the topic of having this market study done. ' Palmer replied yes;but he also feels that it's important to heaz from the public who aze part of the committee. Stone stated he has no problem proceeding with the study—it wasn't the study,it � was the results that would have come back,which were outside the pazameters,that he was not in agreement with. Bronson feels we need ta think in realistic tenms;then he can encourage the � � members of this committee to go forward with a study as long as they demand from the consultants that realistic results are provided for Bangor. Peter Baldacci,Penobscot County Commissioner, stated that they also want to � assist the City of Bangor in this endeavor. They can help in working with State and Federal government. In approaching the State and Federal government we need to present it as a regional project with the support of Penobscot,Aroostook,Washington, � Hancock and Piscataquis counties. Tripp suggested that the committee should continue meeting. On March 19 from 9 am—4 pm,the first Bangor Day will be held in Augusta.and if there is a clear message � stated now for how we aze feeling regionally and locally we can start pushing that message. As CVB Director she is still getting inquiries from many groups to come to the Civic Center,but because Bangor does not have a large enough convention space for , what they are looking for,we can't accommodate them. People want to come to Bangor, Maine- it is looked at as a great hospitali#y community. Hawes sta.ted that for the record it was never the intent to stop the Arena � Implementation Committee from meeting;the sub-committees are still out there and ' planning to get together. I tlunk we have been looking for a date to get the full committee together again;meeting times have been hazd to find in the past month,but � certainly we're not looking to stop the work of those committees. Barrett replied that there was a meeting planned for toda.y but thought it might be a good idea to put it off for a while but I am sure we'll get back to it shortly. , Hawes asked that if it could be done in a couple of weeks that would be fine. Palmer thinks that in going foiward it is critical for all council members to avail themselves to attend these meetings and get questions answered or at least take a look at � the tapes of the meetings which have a1i been televised since the beginning. � � . , , . � Nealley suggested that with regazd to Bangor Day in Augusta on March 19 that � getting representatives from various iocal�businesses to attend and lobby for this project would hopefully be most effective in getting what we're looking for. Guerette(President of Chamber of Commerce&Arena Committee member) � stated that the Chamber's mission is to provide a vital,healthy business community;we feel we've been doing that. She mentioned the various projects that they have supported such as the East-West Highway,truck weight limits,�ducation,have backed almost every � bond issue and the azena project. We have been very supportive of moving this pmject forward—we recognize the economic impact of it to the region. With regard to the comments that the Chamber should help to pay for tbe arena,we already pay for it in � t�es throughout this region of Penobscot,Hancock,Piscataquis,Washington and Aroostook counties. They're buying goods and services here and that is paying the tax dollars that are coming in to the City and to the state as a sales tax. We have alwa.ys su.pported the local option sales tax each and every time it has come up;the Chamber is � with you on tlus. The Chamber was upset to think that all of a sudden it was going to be slowed dovcm; we would like to see you move forward with the study. The Chamber also , has representative(s)from the City sitting on our Board. Barrett- a Resolve Appropriating money for the market study will be put on the Council Agenda for First Reading next Monda.y(2/23). He will also write up the critezia � that the City wants in the market study and bring that back to this committee in 2 weeks for review in order to make sure everyone approves it be£ore going out with an RFP. Hawes asked that the Arena.Committee meet before the next BED meeting so / that they'll have a chance to discuss what they would like to see in this before it becomes i fina1. Blanchette asked for clarification an the issue of rehabbing the Bangor � Auditorium or is it intended to just limit it to the Civic Center. � Barrett stated that the first choice is a new arena because you could then expand the Civic Center and use that as meeti�g space with a new kitchen;but the possibility of � renovating the auditorium would stay on the table as an option. A motion was made, seconded and unanimously voted to recommend to the full � City Council to proceed with the market study for the Arena. A meeting of the full Arena Implementation Committee workshop(any one can ` attend)will be held at 5 pm on Wed.,Feb.,25�'° Cify Hall Council Chambers. (Notices will be sent out.) � 5. Bangor Economic Activity Update-(postponed.from Feb.4 BED Committee} , McKay reviewed the new retail,restaurant and hotel business developments that have taken place particularly in the last yeaz. The larger projects were all approved and � permitted before the Informed Growth Act was in effect-there's only been one � application in the State of Ma.ine for a large box retai!space over 70,000 sq. ft. since this Act was enacted. The City also provided funds to the Penobscot Theatre to correct code � violations and to do the handicap access as part of their extensive renovations. EMMC is � . , � undertaking a$240 million plan for major expansion and improvements at their campus � on State Street. The new Court House on Exchange 3treet has a completion date of � approximately Oct.2009 with occupancy probably in Dec.20Q9. Many other projects throughout the Crty are being undertaken such as at General Electric,Husson University, a new fire station on Gri�'in Rd.,Maine Marine project to be started this spri.ng and a � Tractor Supply store on outer Broadway just to name a few. The construction pertnit activity most years has averaged between$20 million and$44 million unti12007 when • we went to $112.7 million and in 2008 we were back down to $80 million. For the 2000- � 2006 period we had a total of$189 million;for 2007-2008 we had a total of$192.7 million. Most of the permit activity has been in the commercial sector. Residential construction in 2006,200'7 and 2008 we had a much lugher level then what we had in the � period from 2000-2005. The City's assessed valuation in 2008 was 2.4 billioq an increase of 8%from fiscal yeaz 2007. He also reviewed the labor mazket stats including unemployment rates. , Stone asked what percentage of commercial development area do we have lef�? McKay replied that in the Bangor Mall azea there is sufficient developable sites along Stillwater Ave. on the left a.nd further out on the right(past Hogan Rd.). � Charley Birkel questioned the population figure of 32,000 in Bangor. McKay replied that the Census Bureau provides the information(fhat is collected every 10 years). Birkel - replied that when he worked for the iast census there were many people who � refused to fill out the census forms;he feels that this could possibly be the reason for the lower�gure—he feels that there most likely is 40-45,000 people in Bangor. Barrett stated that the number of people per household has dropped dramatically; � it used to be between 3-4 residents per household,we aze now below 2. In effect you'd have to pick up 30%more housing units to house the same number of people because l�ousehold size has gotten so much smaller;plus there is a mobile population that exists; � we have a large dependent population and students do not alwa.ys get picked up in the census. 6. Neighborhood Stabilization Program � McKa.y stated that there is a required public hearing scheduled on this item for �' Monday,Feb. 23 in consideration of the Federal Neighborhood Stabilization Program that funding was made available for through the Housing and Economic Recovery Act of 2008. The funding comes through the Community Development Program at State level � � and down to the City level. The State is receiving$13,85U,000;the City of Bangor allocation will be projected at$1,085,000. The funds can be used to purchase residences that ha.ve been foreclosed on or abandoned,on a case by case basis. The intent of the � pmgram is to stabilize neighborhoods,to prevent deterioration in nei g hborhoods that might have a concentration of foreclosed properties. We don't have a concentratian in Bangor that we can tell;we do have at the most 3 properties on Lincoln Street out of a , total 10 that were foreclosed,according to the state,recently. On a case by case basis staffwill be working with lenders to find properties that aze vacant,that have been foreclosed or abandoned that the City may acquire,rehabilitate if necessary and re-sell � the properties. And,if necessary,we can finance the sale of the properties using Federal funds. We have to commit all of the Federal funds available to us within 18 months and . � � � �� spend them all within 4 years. The acquisition price the City can pa.y using these funds is � 80%of value; we have to have an appraisal;the owner(usually the lender)would have ta agree to sell the properties to the City for not more then 85%of the appraised value;not less then 25%of the funds available to the State of Maine have to be used to hoUse � individuals whose income does not exceed 50%of the azea median income,but the State is going to approach shelters and so forth to make sure we meet that 25%threshold. This item will also be e�lained at the Council meeting on Monday evening(2/23). Then � on a case by case basis we'll look for opportunities and come back to the committee and Council for approval to move forward on the acquisition,and, if necessary,the rehabilita.tion and the resale of those properties. � Meeting adjourned. � � � � ' � � � � , � � . � � ,