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HomeMy WebLinkAbout2008-02-06 Business and Economic Development Committee Minutes � BUSINESS AND ECONOMIC DEVELOPMENT COMMI.TfEE � February b, 2008 � Minutes Councilor Attendance: Palmer, Farringtan, Blanchette, Hawes, D`Errico, Gratwick, � Wheeler Staff Atfiendance; McKay, Heitmann, Barret�, Others: Jon Johnson, Nick Bearce � 1. Request of Bangor Historic Track, Inc. to Lease Land for Additianal Parking Heitmann discussed the proposed agreement between the City and Bangor Historic � Track for additional land for parking adjacent to the area that they_currently lease behind the Irving Station located at Main and Dutton Streefis. BHT intends ta use this _ area for overFlow and employee parking. While a parking lot has already been � constructed an the originally leased area, BHT has determined that they wouid like ta lease the remainder of that lot to create additional parking. The propased agreement will include a pravisian that, upon reasonable notice, fihe City can terminate the � agreement if the land becomes necessary to the City for the new arena/large meeting facility. The dacuments would alsa provide that, in the event that termination is necessary, the City will caoperate with BHT to find an alternative location for its parking . � needs and that BHT will pay rent based upon the same farmula as in their current lease for the existing parking area. Responding to Farrington, Johnson said they would like the arena wifihin the praximity of Hollywoad Slots. Anather alternative is a parking area � at the Round House. If the City places the arena at Bass Park, Johnson said they are hoping that the City will trade of�the parking area for parking at the Round Nause. Again responding to Farrington, if the Round Ha�se area was nat available Johnson said � he would need mare time to laok at it. Johnson did state that the parking area in question shou(d na� hotd up placement of the arena. Barrett suggested that action on this item nat be taken tonight so that staff would have time to talk with BHT. Heitmann � agreed that Further discussions are appropriate. Gratwick agreed that this needs further discussion for highest and best use of the property. Wheeler said that priority cansideration should be given ta the development that the City has as apposed to the � development that it may or may not have. A motion was made and seconded to postpane this discussion ta its next meeting. � 2. Final Report of Committee ta Review the Taxatian of Slot Machine Revenues 3ohnsan brought the committee up to date on an issue currentfy in the hands af the � Legislature's Legal and Veterans Committee. It is a proposal to restructure the gaming tax an slot machines. The slot revenue is currentiy taxed in a two-tiered tax system with two separate bases on which the tax is computed. He had prepared a handout far � the committee to explain th� current tax structure and anafiher handaut to explain the proposed tax structure. The change is very important. He spake about the number which the current tax is calculated an. There is a 1% tax which is called the coin-in, the amount actualiy wagered. It is not actual revenue income but the Law caHs it gross slot � machine incame, which is not a correct term. That is what is actually wagered. For example, a person who plays $20 may wager $280. Hollywood Slats is currently fiaxed � on the $280 which is the number that generally gets published as Hollywood's revenue. It gives the impression that Hallywood Slots earns $600M a year in revenue. It makes them an easy target. He reviewed how slot revenue is actually computed. Many think � � that the 1% tax is tied to what is paid out to patrons, which is not true. Johnson said that the propasal that the Governor's Tax Committee is put�ing forth eliminates the tax � on coin-in and only taxes the actual slot revenue. It changes the tax on the coin-in to a 12.9°Jo tax on the slot revenue. It is important because if the coin-in number is no longer taxed it is nat published and if it's not published individuals will not be told that � Hollywood Slots makes $604M a year in revenue. In order to make the tax revenue neutral, the proposal recammends that the tax on Adjusted Gross Gaming revenue increase from 39°10 tax to 39.25°to. Nollywood will pay a slightly hlgher tax in 2409 and � 2Q10 because of this but it makes as close to revenue neutral as possible. He said the proposal is a housekeeping measure but it is e�rtremely important because in a time of a deficit there are going ta be those who want to raise Hoilywood`s tax�s. He asked for the Committee's support. Responding to Gratwick, Johnsan said he was in the majority vate, which was 9-2 vote. � The minority indicateci it is too early ta make any changes ta the tax law. Johnsan is totally opposed to the minority position. Replying to Gratwick, Johnson said the Hallywood S1ats revenue in the prior year was approximately $40M. � Farrington asked if this prapasal is acceptable ta Hollywood Slats. 3ahnson said yes. As it develaps, Farrington asked if the proposal, as volumes increase, will maintain a fair � sp4it between all invalved, cascade reci�ients. Again, 3ohnson said yes. Respanding to Farrington, ]ahnson said one of the bene�ts of the change in the tax structure is that everyat�e will be very clear on what the tax rate is. The 1°l0 on coin-in is a very � misleading tax because it equates ta a 10% tax on revenue. When it was proposed that it be changed from a 1 ta a 2% it was actually changing the tax on revenue from iQ ta 2Q%. The proposed change would make this very clear. Farrington and 7ohnson talked � abaut coin-in. Wheeler said that Hollywood Slots is the most tightly governed and most highly taxes � enterprise in Maine. He asked how the tax plan on slots difFers from the taxes an pari- mutuel receipts. Johnson said the taxes on slot revenue are paid from the slot revenue right aff the tap. The entire tax is not paid on revenue but actually on the handle. In � harness racing, the tax is actually paid on revenue. In slots, Johnson said he is taxed on three levels; in racing it is anly one level. A motion was made and secanded ta recommend that the Couneil adapt a Resolve in � support of the majority report. The Resalve will appear on the upcoming Council agenda. � Nick Bearce asked if the Tnternational Standard of Accounting Committees, the GAP people who write the US accounting standards or the Securities Exchange Commission � pravide a definition of the revenue for a slot machine. Johnson replied yes. Coin-in is one component of revenue but not the tatal revenue. You minus the cain-aut to campute actual taxable revenue. Maine is the only place in the universe that taxes coin- in. 8earce questioned the roughly 90°lo change in revenue is not a minor housekeeping � matter. Johnson said that's why the 1% of coin-in was replaced by a 12.9% tax on the revenue. Bearce recommended that before the Council adopts a Resalve that they check with a professional accaunting firm for their expertise. Gratwick asked Johnson to � respand ta Bearce. Priar to coming to Bangar, Jc�hnson sfiated that he had been a Chief Financial officer for three large gaming campanies and has dealt with public accaunts for most of his professional career and knows the actual definition of revenue and coin-in is � not revenue. He is a qualified professional. Gratwick felt that an opinion is still � � � worthwhile. Blanchette said it's impartant that the public understand the issue at hand. She said that the Legislature's Apprapriations Cammittee faoked at the coin-in income and felt that Hollywood Slots was making money and decided to tax it. The Committee � was confused. She indicated that the Chair af the Governor's Taxation of Slat Machine Revenue Committ�e is an accauntant. Johnson clarified that one of the members is a certified CPA as well as an attarney. Blanchette said that the majority report will guide � and walk future Appropriation Committee members through the process. They will be looking at a true figure that is being taxed. � 3. Review and Discussion of Arena Locatian Study Barrett said the site study has been updated.and it looked at a number af sites with two � specific locatians: Bass Park and a downtown lacation. Laaking at Bass Park, the consultant originally laoked at two optians. Site one being the south gateway site which is south of Dutton Street. Site two is the current side of Paul Bunyan Park. The � consultant then, after pubfic meetings and discussions with staff, came up with an alternate Bass Park site at the south gateway which wouid basically locate a new building further back from Main Street more or less centered on Duttan Street with a � lesser impact an the Park or the private property awnerships on Main Street. The dawntown site on Oak Street is recommended by the consultant. It is bounded by Hancock and nak near the bridge going to Brewer. The cansultant prefers the Dutton � Street as the first choice and Oak Street as its second choice. Barrett said that staff did nat feel that the Oak Street site was the best site. It is a difficult one for a series of reasons. The consultants provided rating information as well as budget estimates. Barrett pointed out tl�e impartance of directian as ta fihe potential site preferred by �� Council. Farringtan asked about Bass Park narth locatian. Barrett said it sits an top af Paul � Bunyan Park. Barrett reviewed the pros and cons af the sites listed by the consultant. � Gratwick suggested that the study information should be made available to interested viewers. Barrett dPsplayed same photos. � Whi1e a neeessary process, Wheeler ques�ioned how realisfiic it is to try to evalua�e and assess these locations when the City is literally $100M away from even breaking ground. � Hawes said the City does decide where to locate the building and then move forward with the ne�tt implementation step. Befare maving much further, @V81"}/OCl@ Cl�@CIS �4 � decide on the location and ga with the one that is the most common. She agreed with the Bass Park laca�ion. � Blanchette talked abaut the south gate location. Barrett clarified that it sits on tap of the Irving s�ation and the parking lot that Hollywood Slots has off Dutton Street. She talked abaut tying the project into the golf course. �he talked about the new hatel � patrons having access to the course through carts offered by the hotel. Palmer agreed with Blanchette in that it would decrease tra�c in the neighborhaod of patrons traveling ta the goif course. Palmer said a name for the center af Dutton Street is needed. He � agreed that parking is a problem with the downtown site. Defining a locatian with four stakes and red flags would pravide a focus point far the public. He would like to hear � � more from the public before setting flags but he thinks the Council could take a step in that direction for the site. � Charlie Birkel addressed the commifitee regarding the arena location site. He indicated _ that Jon Johnson had a suggestion far location and Birkel suggested that]ohnson � present it ta the Committee. Palmer indicated that �avid Nealley was neact and ther� lohnson. Nealley addressed the � � financial aspect. Regarding the location, he supported a sifie that wouid provide a �� connection from the canventiar� center to the waterfront. lahnsan, as vice chair of the BCVB, suggested the arena is a very important part of � Bangor's future. The BCVB is the marketing arm of Bangor. It has many graups who would love to come to Bangor and all it has to affer but when they learn there is nat a � large enough area to handle their meetings they go elsewhere. $100M is a huge price tag for the praject but that's what it will take to bring people to Bangor. The arena would he{p to generate a lat af traffic and dallars to the lacal economy. On another point, he proposed another layout for the arena which would be less obtrusive. It would � keep Paul Bunyan in his place. It would leave a green space area an Main 5treet. It would allaw for the arena to be constructed and in the meantime the current raceway parking lot could be used for parking. Onee the arena was canstructed, the old one � would be demolished and in its place would be a parking garage with a hotel on top of it. It wauld mave the arena further away from the residential section. The other � advantage to this layout is that Irving and China Harbor wauld not need to be maved and the new Ho!lywoad 5lots would not lose its emplayee parking area. Palmer asked Ring to join the Committee. Respanding to Palmer, Ring said in terms of � the site 1 alternate, provides advantages as weil as challenges. In terms of the overall praject cast, it is camparatively smaller. There is an advantage to multi-level access to � the facility. Mr. 7ohnson`s alternative has been looked at previously by the City. it could have an appnrkunity for the multi-level access as well. It doesn't appear thafi it would fit the space as wel1. Palmer talked abaut taking Jahnson`s sugges�ian and pushing it back � into the hillside. Ring said it cauld be done. One consideration is the importance of being able to keep the existing facility open so as no�to lose bookings during the canstruction project, Barrett said selecting an approximate site does not nail it down to � the exact. One of the issues with 3ohnson's propasal is vehicular access. Barrett said he feels there is a great deal of interest in the Bass Park site, that the site at Bass Park takes certain principles infio account to preserve as much of the park as feasibie, � attempting to avoid intrusion anto private property to the iargest extent possible, keep the current faeiNty open during the constructian periad, and a site design that allows for vehicular flow. Palmer said that preserving as much of the Hollywood Siots parking iot as possible should be listed as a consideration. � Due to a cammitment, Wheeler asked to be excused. Blanchefite talked about keeping the current facility kept in place for operating. She � noted the twa separate buildings: civic center and auditarium. She talked abou� making workable agreements with the University of Maine, Hussan College, or the Air ,� Guard ta hast events, The auditorium could be demolished b�at the civic center would still be available for social functions. Palmer asked Dyer ta be prepared to answer that question with data at a future cammittee meeting. � � � � Hawes talked about the purpose of this specific meeting. She felt a lot of the questions being raised wi11 be answered by the next agenda item, which is the formation of a committee to laok at the actual site design and �nancial aspects. � Palmer recognized Bill Dean of March Street. He works in construction knowing that the project could be completed in phases. He asked abaut the location. He feels Bass Park � is the only location that should be considered. He spoke about the impact of this project on his neighbarhoad. Palmer said the City is sensitive to the residential area. Candy Guerette, President af the Bangor Region Chamber of Commerce, stated that the � Chamber owns its building on leased land from fihe City for $1.00/year. (She gave $1A0 to the City Manager}. The Chamber is receptive ta the Bass Park site. She asked that � the Chamber be included in the process as they will need a new facility and will need ta start a capital fundraising campaign, design work, architectural rendition, and ga through the bid process. She asked that the City consider leaving the Chamber in the Bass Park area and suggested that the City cansider moving it to the opposite end of the � park, across from the BDN. Tom ?? af 39 March Street, said his cancern is the access road and vendar deliveries. � He is concerned that is will afFect the properry values. He does agree with the Bass Park site for the new arena. Barrett said that a�this paint this is a€1 very conceptuai. The City does want to mitigate impacts upon neighborhoods and as it moves forward � this issue will be handled in much greater detail. Hawes said when mare meetings are set up it would be nice if it was in a Council � Warkshap Session to allaw all participants time to speak. She feels it would be mare beneficial ta a11. � lames Gerety, Bangor Malf Manager and President of the BCVB Baard, applauded the Cauncil for maving forward for taking on this very important project which is crucial to Bangor. He added that he wauld support the site 1 alternative. Bass Park is the best � location. He said that the BCVB cannot entertain many requests received due to laek of space for events in Bangor. � Nick Bearce talked about the removal of the Irving Station and China Harbor would remave dollars off the City's tax roll. He hopes that this wil! not be further cansidered. He asked about clean up costs of the gas statipn, if it were to be remaved. �' Barrett said there are a number of issues that have arisen: the e>ctent to which the City wauld need fia keep the current facility apen during canstructian and Dyer will come � � back to the Commitkee with that information; mitigating neighbarhood impacts is something that will have ta go into tR�e planning process as the project moves forward; tying the facility into the Golf Course; and interest in looking at the potentiai of further � moving the facility into the hillside up behind the park. He suggested that there is no need far the Council to take action on this item at their upcoming meeting to ailow for pubEic input. He will schedu(e a Council Warkshop Session for further discussion. � 4. �ormation of a Special Committee on Arena Implementation � Barrett said this has been discussed for quite sometime. The Committee would work to put tagether a much more detailed arena implemenfiatian plan. Palmer said the smaller the group the more effective it will become. Barrett said a two-way dialogue is � � necessary - those interested community stakeholders in a new facility and the City of Bangor. Palmer said the meetings should be televised from the Council Chambers. � Farrington said the financial part should be interlwined with the development and design objectives portion of the committee. Barrett agreed. The financial picture can be _ reviewed based upon projected slot revenues, look at facility design and updating the � marketing study to make sure the sizing is appropriate to need. The project could possibly be phased as well. The consultant had pointed out that meeting space could be added at a later time. Hawes said the committee is very representative of the � stakeholders using the facility. Barrett reviewed the proposed committee structure representation. Palmer recommended a composition of 12 members. Barrett agreed but thought this group would be between 15-17. Hawes said all will bring their own � expertise to the committee which will be needed for the overall site and design. She thought 17 to be workable. A motion was made and seconded to recommend the committee structure on the upcoming Council agenda for final action. Ken Huhn asked � about the process of selection of inembers from the public. Barrett said they would be selected by the Business and Economic Development Committee from individuals nominated by the Council. Anyone interested should contact the City Manager's Office � by phone or by e-mail. The names will be passed along to the City Council. Responding to Guerette, she questioned the number of votes represented by the implementation committee membership. � 5. Executive Session— Economic Development— Negotiations for Disposition of Property— BIA Commercial/Industrial Park— M.R.S.A. § 405(6)(C) (Confidential � Memo provided separately) A motion was made and seconded to move into executive session for items 5 � and 6. 6. Committee Action on Above Item � No Committee action was taken on the above item. 7. Executive Session - Economic Development— Negotiations for Disposition of � Property— Maine Avenue— M.R.S.A. § 405(6)(C) (Confidential Memo provided separately) � 8. Committee Action on Above Item, if necessary No Committee action was taken on the above item. +� � � � � � - _ _ _