City may amend its land deal with Boyd

Dan Kulin

Wednesday, Jan. 19, 2005 | 10:55 a.m.

Las Vegas City Council members may vote today to amend an agreement with Boyd Gaming Corp. to close the company's purchase of downtown property from the city at a price that is, at most, a third of the property's current value, according to county assessor records.

The amendment would end a deal that originally called for Boyd to build a parking garage downtown, and instead put money into a planned performing arts center the company's outgoing president is taking the lead on.

The proposed changes to the agreement would relieve Boyd of any further obligations connected to the 1994 deal -- under which it bought 3.4 acres next to Main Street Station from the city for $1 -- in exchange for $2 million.

The taxable value of the land today is $5.9 million, according to the county assessor, and taxable value is typically signficantly lower than market value.

But City Manager Doug Selby and Boyd spokesman Rob Stillwell said they don't think the land is worth nearly that much.

"The idea that you could sell this for millions is unrealistic," Stillwell said. He said the land is an off T-shape and over Ogden Avenue, which could limit what could be built there.

Selby said the land is "too encumbered" with the railroad tracks on one side and Ogden Avenue running under part of it.

In December 2003, 1.5 acres on the other side of the railroad tracks along Ogden Avenue was bought for $2 million, according to the assessor's records. Unlike the 3.4 acres though, that property is rectangular in shape and along the side of the road instead of over it.

The original agreement for Boyd to acquire the city land came about as part of Boyd's $16 million purchase of the shuttered casino that became Main Street Station. It called for the company to build a 900-space parking garage and reopen the casino in return for the land along Main Street that straddles the Ogden Avenue underpass.

At that time the city was focused on adding parking to a struggling downtown, and had just recently used eminent domain to force the sale of private property for the construction of the Fremont Street Experience parking garage. That action drew criticism and an 11-year legal battle with the private owners including the Pappas family, who ultimately settled with the city last year for $4.5 million.

The Boyd deal was amended several times over the last several years to extend the deadline for building the parking garage. The most recent amendment came in 2002 when the city and Boyd changed the agreement to say that instead of building a parking garage Boyd could donate three acres for a proposed sports arena for the corner of Main Street and Stewart Avenue, plus loan $2 million toward the project.

Today, the council is scheduled to consider a seventh amendment to the agreement that would instead allow Boyd to give money to the city's redevelopment agency and toward the performing arts center expected to be built on the city's vacant 61 acres on the west side of downtown.

However, the council may postpone voting on the matter for two weeks. Selby said Monday he will ask for the delay so Mayor Oscar Goodman can be present for the vote. Goodman has focused on downtown revitalization, particularly the efforts to turn 61 acres owned by the city into a residential, cultural and commercial center called Union Park.

The 2002 version of the agreement with Boyd included a provision that addressed the possibility the arena might not be built -- plans for what was called the Las Vegas Events Center were dropped soon after the hockey team being sought for the arena decided to go to the Orleans.

The agreement said if the center didn't become a reality and Boyd had spent more than $1.5 million on plans for the center then the company could give the city more money to bring Boyd's total contribution to $2 million in order to satisfy the deal for the 3.4 acres.

But City Attorney Brad Jerbic said that if Boyd had spent less than $1.5 million on the project, one could argue that the company would still be required to build the parking garage.

Boyd officials said the 2002 agreement allowed them to pay the city $2 million, minus money already spent on the project, to settle the agreement if the center was not built.

So far, $320,000 of Boyd's money has been spent on the events center project, but no city officials are calling for Boyd to build a parking garage in an area that Jerbic said a parking study has shown has an abundance of parking spaces.

Under the latest proposed changes to the agreement, another $1.68 million from Boyd would be directed to two purposes: $500,000 would be free to be used on any city redevelopment project, and the remaining $1.18 million would be earmarked for the performing arts center. This would bring Boyd's total payout to $2 million.

But company officials say the city makes out well on the deal and that Boyd invested much more than $2 million to get the property.

"We bought it as part of rescuing a property out of bankruptcy," Boyd President Don Snyder said. "This is not about us getting the land for $2 million."

Snyder said the 3.4 acres was part of his company's deal with the city for Main Street Station, which he said cost $16 million to purchase and then another $45 million to fix up and open.

"There were not a lot of people knocking down doors to get this," he said about the land.

City Councilman Lawrence Weekly said that even if the council could take the 3.4 acres back, he doesn't think the city should because that would ruin the positive relationship and goodwill between the city and Boyd.

"It's a great relationship and a great partnership and we all like the idea," Weekly said about a performing arts center.

"It's a good deal for the city because Boyd is a great partner," Weekly said about the proposed change to the agreement. "When most people were pulling out of downtown they stayed."

Weekly said the $2 million price tag was born from the city's efforts to secure land and a hockey team for downtown.

"We were so close," he said. "There was a great level of excitement because we were that close."

But with the hockey team now out of the picture, Weekly seemed equally excited about the performing arts center and Snyder's involvement with the project.

Snyder has announced he will retire from Boyd at the end of March to devote more time to personal interests, including the performing arts center.

Snyder chairs the Las Vegas Performing Arts Center Foundation, and has pledged a $1 million personal donation toward the center.

The center will probably cost $125 million to $150 million to build, and Snyder said the foundation will also work to establish a $50 million to $60 million endowment to offset operating costs.

The arts center is proposed to be one piece of the massive development on the 61 acres that could also include skyscrapers, a new City Hall, a baseball stadium and an academic medical center -- the first piece of which, an Alzheimer's center, is expected to break ground in August.

Snyder said what the company decides to do with the 3.4 acres will depend in part on what happens with the planned development for the 61 acres. For now, Boyd will continue using the land for parking, he said.