All in | Why the business pros behind Black Bear Entertainment are betting on a casino in Oxford
Photo/Tim Greenway
Investors Suzanne and Rupert Grover, Jim Boldebook, Steve Barber, Bob Bahre and Rob Lally of Black Bear Entertainment think a resort casino will bring prosperity to western Maine
Photo/Tim Greenway
Steve Barber, CEO of Black Bear Entertainment, says an economic impact study convinced him to support a casino in Oxford
Along Route 26 in Oxford, where signs advertising local farmers’ native peas and strawberries scatter the roadside, the Burlington Homes of Maine plant sits neglected, weeds creeping up the sides of its faded blue corrugated metal. Its parking lot empty, the building lacks any indication that it once served as one of the area’s major employers.
Shuttered in 2008 to the disappointment of more than 60 workers, Burlington Homes is just one sign of the economic hardships this rural region of western Maine has suffered. The modular home and wood products industries that once anchored the region have struggled to survive the housing downturn, with promises of buyouts and factory restarts punctuating the gradual erosion of a traditional way of life.
For all but two months out of the last two years, unemployment in the region has met or, more commonly, exceeded state and national averages. Peaking at 11.6% in February, the rate now sits at 9.6%, well above the statewide rate of 7.9%.
Now, the town of Oxford and its neighbors are looking toward a new approach toward economic development, one that involves making money without making things. Black Bear Entertainment, a group of Maine business leaders representing industries from frozen foods to auto racing, has proposed building a four-season resort casino here. The group has gathered enough signatures to put the project to a statewide vote in November.
Face time
Locals have had some time to get used to the idea. In 2008, the town and county supported a separate effort to site a casino in Oxford, but the proposal was rejected at a statewide referendum.
This time around, Black Bear Entertainment is betting that a rewritten law, their homegrown roots and track record of job creation will convince voters. Heading up the group is Steve Barber, former president and CEO of Barber Foods in Portland. Since retiring in early 2009 from the family business, Barber has devoted much of his time to the casino effort. He says an economic impact study on the proposed casino — which predicted 800 direct full-time jobs, 500 support jobs and average pay of $17.50 an hour — sold him on the idea. “Within two days I agreed this was a project that I would be proud to be part of,” he says.
Joining him in the effort are Rupert and Suzanne Grover, founders of Grover Gundrilling Inc. in Norway; Jim Boldebook, founder of Creative Broadcast Concepts, an auto ad firm in Biddeford; Rob Lally, co-owner of the Mt. Abram ski resort in Greenwood; and Bob Bahre, former owner of the Oxford Plains Speedway and New Hampshire International Speedway, who has invested with his son and business partner, Gary Bahre.
But while the group’s business experience runs the gamut — Bob Bahre is nothing short of a legend in western Maine — this casino venture is uncharted territory. Consistent with the business models of gaming outfits from Las Vegas to Connecticut, the Oxford casino would see the vast majority of its income fly right back out the door in the form of taxes and player payouts. Even Rob Lally, whose resume speaks perhaps most directly to the resort-style project, reflexively clasps his hand to his chest in a wince when he thinks about how much money the state will take off the top. “It makes my heart stop, how much revenue we’re giving away,” he says.
As is the case for the casino’s visitors, hoping to win big at a slot machine or land a 21 in blackjack, for the facility’s operators, it’s all about the percentages. Even after the players have won back an average 92% of their dollars and the state has reaped its share of nearly half of net slot revenues, Black Bear Entertainment is looking at around $40 million in revenues.
Numbers game
Black Bear Entertainment has invested more than $1 million toward building a casino in Oxford. After being approached by Barber to invest, Bob and Gary Bahre have so far contributed a total $120,000 to fund the campaign.
“I guess I’ve got 40% of the damn thing,” says the elder Bahre of the Black Bear LLC. “That’s what they tell me.” (“They” are right. Bob and his son own 40% of the company). A white-haired man in his 80s, Bahre has a way of amusingly downplaying the magnitude of his business investments. He’s built housing all over the state, owns a number of shopping centers and still has everyone’s ear at the speedway he and his family constructed in Loudon, N.H., which he sold more than two years ago. Many credit him with single-handedly bringing NASCAR to New England. “I’ve done fairly well,” he says.
Getting back to percentages, the state plans to take 46% of the casino’s estimated $55.2 million in net slots income and 16% of the projected $15.6 million in net table game income. Of that, 25% and 10%, respectively, would fund K-12 education in Maine, with the remainder going to higher education, tribal governments, administrative expenses and harness racing, among other areas.
The estimates, compiled by the state, conservatively assume Black Bear will operate 1,000 slot machines (500 fewer than the law would allow) and 54 table games.
So, after those deductions, Black Bear would be left with about $43 million. Subtract administrative, licensing and public safety costs, and that’s more than $39 million. Even after federal taxes and operating expenses (which the state didn’t project) are taken out, a tidy sum remains.
The state’s analysis assumes that for every dollar gambled, nearly 92 cents will be returned as winnings. Player payback figures are a selling point in Las Vegas, where casinos hope to lure customers by advertising them in flashing lights. But the psychology of gambling comes into play, a factor that makes assessing the fiscal impacts of casinos uniquely tricky, says Marc Cyr of the state’s nonpartisan Office of Fiscal and Program Review. Winning players sometimes wager more and for longer, coaxed by the promise of another payout, and jackpot winners are apt to rave to their families and friends about striking it rich, encouraging new business. “Sometimes, the higher payback does a better job of getting money back to the operator,” he says.
Impact statement
Steve Barber says casinos aren’t really “his thing.” He visited Hollywood Slots in Bangor, however, as a form of informal market research, and didn’t even really know how to play the machines. “Why I would want a resort casino is not for the casino experience,” he says.
Barber for more than 30 years oversaw one of Maine’s most storied family businesses, a frozen foods company staffed largely by immigrants that’s now one of the country’s largest producers of frozen foods. His co-investors, the Grovers, founded a precision drilling company in Norway — motto: “The fastest guns in the east”— in 1983 that today employs 70 and was recently recognized by the Oxford Hills Chamber of Commerce as its business of the year. Just up the road in Greenwood, real estate developer Rob Lally co-owns Mt. Abram ski resort in Greenwood, which employs 200. Jim Boldebook in 1983 founded a Biddeford ad agency that today boasts some of the nation’s largest car dealerships as clients. As Boldebook puts it, “We’re all entrepreneurs. Braggedly, we’re all successful entrepreneurs.”
So why, with such combined business acumen, does this group see a resort casino, of all things, as the key to economic development? Because of that four-letter word everyone wants to hear, especially during a recession: jobs.
Black Bear Entertainment projects that the casino would create about 800 full-time positions and the same number of construction jobs, plus 500 support jobs for people in industries that would benefit from the extra tourism traffic. The jobs refrain is the focus of their campaign. A short video on the Black Bear website features the voices of casino supporters lamenting the area’s employment losses and expressing worry that their children will have to leave the state to find work.
But jobs aren’t the only factor in determining the potential economic impacts. William Thompson, a professor and gambling researcher at the University of Nevada/Las Vegas, has found that regional economies often suffer from casinos even as local economies and government budget items may benefit. “It’s going to be northern New England money,” being gambled in Oxford and, for most individual players, lost, he explains. “So if you’re hurting the New Hampshire economy, you’re not really helping the Maine economy.” The larger cities will “cash in” on the education funding, he says, because the state’s population-based formula will reward them with a greater share. “The balance is they’re going to be the gamblers as well,” he says.
Still, if the casino and its operators reinvest their profits into boosting and advertising the region’s tourism attractions, the facility could make western Maine a destination, says Thompson, who hasn’t formally studied the proposal.
Black Bear’s investors expect residents from out of state to make up 30% to 35% of the casino’s business. The 200-room hotel, convention center, concert space, dining options and outdoor recreational opportunities that are planned to accompany the gaming facility (which the state will tax at more typical rates) have Lally sold. Another resort in western Maine would draw new visitors to the region, which certainly couldn’t hurt his ski area, or the fairgrounds or speedway for that matter, he says. “We want to take advantage of all the resources Oxford County already has,” Lally says.
He also points out that the casino’s design and décor will be more Route 26 than Las Vegas strip. A draft rendering of the resort looks vaguely like outdoor retailer Cabelas, with post-and-beam accents and lush landscaping.
The design certainly won’t mimic Penn National Gaming’s Hollywood Slots facility in Bangor, Lally says. While he cites the facility’s “success” in Bangor — the economic boost to the area and lack of evidence to support doomsday predictions about crime — as a model, he’s far from an acolyte. “It’s going to be better,” he says of Black Bear’s project.
“We looked at it as a way to upgrade our area,” says his local co-investor, Suzanne Grover. A former teacher with a firm handshake who speaks emphatically about the project’s potential benefits to education, Grover uses the analogy of a lost child trying to find its parents in describing the region’s search for an economic identity.
In Norway, just a few miles from the casino’s planned future location, is the company she founded with her husband. Employees’ cars pack the parking lot at Grover Gundrilling on a recent sunny morning. At a convenience store across the road, a sign out front promotes the latest lottery jackpot: “Just imagine — $1.1 million.”
Jackie Farwell, Mainebiz senior writer, can be reached at jfarwell@mainebiz.biz.
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