AUGUSTA, Maine - As state lawmakers look to expand gaming in Maine, the city of Bangor will decide by Friday whether to lower the assessed property value of Hollywood Casino by nearly $37 million. Casino officials argue that the abatement request is warranted.
They cite a dip in Hollywood's business since 2012, a more competitive statewide market for gaming and an outside review that shows that the value of the properties have dropped.
But Bangor's assessor told a City Council committee that he believes the casino's current valuation is fair. At that meeting last month, assessor Phil Drew suggested that Bangor hire a lawyer to challenge the abatement request. The city turned to William Dale, a Portland attorney who is currently advising the city of Rockland in a tax dispute with Walmart.
Sitting at a conference table in his City Hall office, Phil Drew says he and Dale have been reviewing Hollywood Casino's current valuation in greater depth. "At this point, I haven't seen anything that showed that the assessment isn't fair and equitable," Drew says. "But on Friday, that formal decision will be made."
Hollywood Casino's current assessment is just over $98 million. That includes the casino, hotel and parking garage on Main Street, and the race track behind the Cross Insurance Center, which Hollywood leases from the city.
"When the valuation for this year came in, for Hollywood Casino's property, it came in higher than last year," says Dan Cashman, Hollywood Casino's spokesman. "When that happens, it makes one want to look into it. So Hollywood Casino enlisted the services of Ernst & Young."
The global accounting firm did its own review and found that the casino's properties had decreased in value - to around $61 million. Cashman says it's this decline in value that's driving the abatement request.
But the request comes at a time of broader uncertainty for the gambling industry in Maine. In 2012, according to the Maine Gambling Control Board, Hollywood Casino raked in nearly $63 million in revenue. By 2014, that total had dropped to just over $54 million.
Meantime, a growing number of state lawmakers, Republicans and Democrats, are calling for comprehensive gaming reform in Maine. A recent report, prepared for the legislative committee, backed such an overhaul, including a competitive bidding process for new casinos in the state.
"We have seen both Bangor and Oxford to be well-managed businesses, employing lots of people, and good corporate citizens," said state Sen. Linda Valentino, a Saco Democrat. "Unfortunately, though, they will be the ones that have the hundreds of thousands of dollars to mount campaigns to defeat these bills coming up in the Legislature - for the reason that they don't want competition."
Jose Flores, the general manager at Hollywood Casino, did not return a call for comment by airtime. But in an April interview with the Bangor Daily News, Flores cited competitive pressures as one reason for the casino's tax abatement request.
"We’re asking that our property tax be revised," Flores told the newspaper, "to reflect the current reduction in our business volumes as a result of continued competitive pressures from Oxford Casino and general softness in the economy."
"As assessors, we're required to take into consideration any value influencing factors, whether it's a mobile home or whether it's a casino property," says Bangor assessor Phil Drew. "You could list economics or the economy as a potential value influencing factor, which all get considered."
But to factor this into their thinking, Drew says his staff must be clearly shown the evidence that a changed marketplace has contributed to a decline in property values. So far, Drew doesn't seem to be buying this argument. Hollywood Casino will have to wait until Friday to find out whether he's been persuaded to change his mind.