Downtown benefits from LVCVA representation

Friday, May 21, 1999 | 11:32 a.m.

Downtown Las Vegas benefitted Thursday from its influential representation on the Las Vegas Convention and Visitors Authority board of directors.

The board approved a $109.5 million operational spending plan for the 2000 fiscal year, but not before Don Snyder, president of Boyd Gaming, convinced other board members to transfer $400,000 out of a contingency fund to back special events at the Fremont Street Experience.

The agency that promotes Las Vegas tourism has a smaller budget for the 2000 fiscal year than last year because one of its funding sources dries up on July 1. On that date, five-eighths of 1 percent of a special room tax will be transferred from promoting special events to backing school construction for the Clark County School District.

The LVCVA lobbied unsuccessfully before the Legislature this year to retain the proceeds authorized by Senate Bill 170, a room tax law.

The LVCVA staff has estimated its loss to be about $12 million.

Because of the reduction in funding, the LVCVA's operational budget is dropping from $111.2 million in fiscal 1999 to $109.5 million in fiscal 2000, which begins July 1. The agency's financial analysts said the total loss in funds wasn't too dramatic because room tax revenues are expected to be up about 10 percent due to increased capacity and visitation.

The operational budget does not include revenues and expenditures associated with the agency's bonding program. It also doesn't include carryover funds from 1999. With those funds added, the total spending plan is about $150.7 million.

Several special events and agencies that promote them will lose LVCVA funding -- among them Las Vegas Events, a private group that is contracted to coordinate some of the city's largest special events.

Snyder, noting that downtown Las Vegas properties have not kept pace with Strip revenues in recent months, said operators of the Fremont Street Experience, a three-block computerized light show that operates hourly every evening, need the promotional money. Snyder's company operates three downtown hotel-casinos, as well as properties elsewhere in the Las Vegas area that won't benefit from special events downtown.

Mark Paris, president of the Fremont Street Experience, said funds from the LVCVA, which are passed through Las Vegas Events, go toward promotion of special events staged downtown on Fremont Street beneath the giant light canopy.

Paris said the funds promote many of the more than 20 annual events conducted downtown. Las Vegas Events stipulates that some of the money be used for out-of-market advertising.

Paris said if the money hadn't been allocated, some special events downtown would have been eliminated or scaled back.

"Instead of having a group like the Dixie Chicks perform for an event, you'd see a local group," Paris said.

He said while the fund transfer approved at the board's special meeting had Fremont Street's name on it, the plan benefits the whole city.

"Don Snyder is concerned about all of Las Vegas," Paris said. "The Fremont Street Experience is one of the most visited attractions in the city and the board has to watch out for Laughlin, Mesquite and downtown and not just the Strip."

Snyder's proposal transfers $500,000 from a $1 million contingency fund built into the budget to Las Vegas Events. Of that, $400,000 was specifically earmarked for Fremont Street. The net result for Las Vegas Events was seeing its contribution from the LVCVA dip from $2.6 million in 1999 to $2.5 million in 2000.

"We realize that we're not alone by virtue of the (Senate Bill) 170 money going away," said Kirk Hendrix, president of Las Vegas Events. "These (cuts) were very hard decisions and the Fremont Street money was one of the last to go."

Hendrix said his agency tracks how the money spent translates into drawing new out-of-town visitors. He said depending on the event, between 6 and 15 percent of a downtown crowd is drawn specifically by the event staged.

Not everybody left the budget meeting happy.

Michael Gaughan, chairman of Las Vegas Events' board of directors, said he was disappointed that the board cut funding to promote events at the Las Vegas Motor Speedway. Gaughan said it did not appear the board considered the rate of return as a factor in deciding what programs to cut.

Gaughan said Las Vegas Events is attempting to persuade speedway executives to stage a second NASCAR Winston Cup event in Las Vegas and cutting promotional funds now won't help the effort.

In the 1999 fiscal year, the speedway received $1.75 million in promotional funds.

The events and agencies that fared the best in the 2000 budget were SFX Live, which has a three-year promotional contract ($1.8 million), the Las Vegas Invitational Golf Tournament ($1.4 million), Professional Bull Riders series ($1 million) and the AAA World Series ($800,000).

The National Finals Rodeo also gets a 155 percent increase in promotional funding in 2000, from $200,000 to $510,000.

Gaughan said he was disappointed the LVCVA would cut funding to the speedway, but continue to back the AAA World Series and two golf tour events, which between them draw less than a quarter the attendance of a major race.

LVCVA officials said funding was left intact for events with which the agency has contractual obligations. The Las Vegas Invitational and the Las Vegas Senior PGA tournament, for example, have three years left on their contracts.

LVCVA President Manny Cortez said sponsorship support offered by the agency is seed money and that the intent is to get events started so that corporate sponsors can pick them up and continue them.

Cortez said the agency is optimistic that room tax revenues will continue to increase. In addition to the openings of Bellagio, Mandalay Bay, Resort at Summerlin and Venetian hotel-casinos in the 1999 fiscal year, revenue increases are forecast with the opening of Paris and the new Aladdin in the next 12 months.