Public or private: Debate over arena financing intensifies

Tuesday, Dec. 5, 2006 | 7:07 a.m.

Imagine if Las Vegas resort developers argued that the public should pay part of their construction costs because the new business would bring jobs to the state and raise tax revenues.

Voters wouldn't treat the idea kindly, said Alan Feldman, spokesman for MGM Mirage, Nevada's largest casino operator. "I am confident that of our 1.8 million people, it would be 1.8 million to zero not to build a hotel."

Yet local officials are considering the same financing equation for a proposed arena - and Feldman is among the Las Vegas public and private figures who believe that the idea is equally bad. "I think the notion of public funding for an arena is absurd in a city like Las Vegas."

Feldman was speaking for only MGM Mirage. But as recommendations for a new arena are presented to Clark County and Las Vegas officials this week, Feldman's comments demonstrate the substantial opposition that awaits any attempt to use tax money to subsidize the new structure.

Feldman and at least some public officials doubt the wisdom of spending tax money on a new arena when the community needs to devote more resources to health care, child welfare and public safety.

A task force studying the possibility of a new arena gives its final recommendations to County Commission today and to the Las Vegas City Council on Wednesday.

The task force, which includes tourism, local government and gaming officials, found that UNLV's aging Thomas & Mack Center will have difficulty retaining its current events and attracting new ones thanks to seating constraints, congestion and parking problems.

The task force identified 17 potential sites for an arena and recommended four - two in the city and two in the county, on Las Vegas Boulevard south of the Las Vegas Beltway. The group also estimated a price tag of $404.7 million, not including the cost of infrastructure and acquiring property.

"Public participation will be an important component of the financing structure," the report says.

Without public money, the task force estimates, an arena would lose an estimated $10.9 million annually over 30 years - or $17.3 million a year if an NBA or NHL team, which would want part of the arena's revenue, is part of the picture.

Would taxpayers want to foot the bill?

"Having an arena is clearly a benefit," Feldman said. "But I think there's a huge difference between want and need."

County Commission Chairman Rory Reid is equally skeptical. "I think the private sector is really going to have to step up or this won't happen," Reid said. "There's a lot of people talking about it, but no one has come up with a concrete proposal."

Guy Inzalaco, a partner in Olympia Land Corp., which owns one of the four recommended locations, said the community has options other than simply paying higher taxes.

"There are financing vehicles available for the county that don't include raising taxes," Inzalaco said. Those include tax increment financing, property tax breaks or infrastructure improvements. Under tax increment financing, the additional property tax revenues generated by a property's increased value are used to fund a designated project.

Olympia's potential site is on 250 acres off of Interstate 15 between Cactus and Starr avenues.

"We believe we have a great site that makes a lot of sense and we would definitely play a role on the private side," he said. The site would allow development such as hotels, condos and casinos that could benefit from the presence of an arena.

Apparel wholesaler Fred Nassiri owns another recommended site - 64 acres bordered by I-15 and Las Vegas Boulevard and Blue Diamond and Warm Springs roads.

Lisa Mayo, his consultant, said that even before the task force began meeting in May, Nassiri had been in talks with Dallas-based DreamScape Development Group about building a domed stadium as part of a larger development that would include condos, hotels and casinos.

"As soon as this (report) is approved Tuesday and Wednesday, I'll be on the phone and setting up appointments," Mayo said. Nassiri could submit plans for a new arena within two weeks, she said.

"I don't necessarily think that tax revenue has to be part of the arena itself," she said, adding that public infrastructure improvements and property tax breaks might be enough to make the project feasible.