Small print: Harrah’s gift needs match

Friday, Sept. 21, 2007 | 7:06 a.m.

When UNLV announced on Sept. 10 its largest corporate donation, the other half of the story didn't get much notice.

The bulk of a $25 million gift from the Harrah's Foundation toward construction of an academic building for UNLV's hotel college will be made good only if the university raises another $25 million by the end of 2009.

That caveat was not noted in the prepared statements announcing the gifts, but was mentioned at the ceremony.

The matching-gift requirement means that if UNLV can't find private supporters to help pay for the project, the school would turn to the state Legislature, which has tightly held the purse strings when funding higher education.

Assemblywoman Sheila Leslie, D-Reno, wasn't hopeful for state support. "It would be very difficult in my mind to see the state be able to come up with $25 million," said Leslie, the vice chairwoman of the Ways and Means Committee. "If I were them I would start working on plan B."

So to get their hands on most of the Harrah's gift, university officials have a challenge ahead.

According to the memorandum of understanding that lays out the deal between UNLV and Harrah's, UNLV will receive $2.5 million up front for programming, design and project management of the academic facility. After UNLV secures funding for the balance of the project, estimated at $25 million, the remaining $22.5 million will be paid by Harrah's in three parts: on the signing of construction contracts for the academic building, on the building's ground breaking and when construction is 50 percent complete.

Another Harrah's gift of $5 million, also announced Sept. 10, will go toward research and other related initiatives.

The proposed academic building will be part of INNovation Village, a complex for the William F. Harrah College of Hotel Administration that will include a hotel and conference center that will serve as a laboratory for the research, development and showcasing of hotel-related products and services. Restaurants and retail space also are planned.

INNovation village was the dream of hotel college Dean Stuart Mann, who will serve as a primary fundraiser in tapping private funding sources.

Mann said other hotel, gaming or restaurant companies could be among those asked to help.

Because Harrah's has the naming rights to the academic building, "I think it would be a deterrent for someone to give exactly the same amount as Harrah's," Mann said. "Here's what I would be thinking. If I can find five companies to give me $5 million apiece, we put their names on major rooms or facilities in the building."

UNLV's Lied Library and Stan Fulton Building are among campus structures supported by multiple donors. That's a common model for funding construction, said Walter Sczudlo, executive vice president and general counsel of the Association of Fundraising Professionals.

The money from Harrah's put UNLV about three-quarters of the way toward its goal of raising $500 million by the end of 2008.

Developers hoping to be involved with INNovation Village will be measured in part by their proposals' benefit to the university, and one way they could meet that requirement would be to contribute toward the academic building, said Gerry Bomotti, UNLV Senior Vice President of Finance and Business.

If UNLV opts to go the public route, it will have to persuade legislators to cough up a sizeable chunk of cash when the state has little to give.

In their last session, lawmakers allocated about $90 million for construction and renovation to a Nevada System of Higher Education health sciences program. That was the only money for new construction higher education received. Legislators denied a request for $4.83 million to plan the hotel college building.

State Sen. Bob Beers, R-Las Vegas, vice chair man of the senate's finance committee in 2007, said a struggling housing market and other factors mean lawmakers are expecting the budget to be tight in 2009.

That said, the Harrah's money makes the prospect of funding the academic building more attractive, Beers said.

UNLV President David Ashley said he'll focus on convincing the Board of Regents and legislators that the hotel building should be a priority.

The Harrah's-UNLV agreement says that in the absence of private matching donations, regents must place the Harrah's facility first on its list of capital improvement program funding requests to the 2009 Legislature.

Of what would happen if the building did not top the list, Thom Reilly, Harrah's Foundation executive director, said: "We don't anticipate that being a problem. If it is, we'll deal with it when it comes."

For the most part, the stipulations in the Harrah's-UNLV agreement are not unusual, said Sczudlo, who did not see the document but heard a summary of its terms. The requirement that the Harrah's facility top the regents' priorities "does raise some yellow flags," he said. That a donor would try to influence political priorities through a donation is cause for concern, Sczudlo said.

Reilly said the intent of Harrah's was not to dictate regents' actions but to ensure they "get the money."

Regents Chairman Michael Wixom said the Harrah's facility will be a priority, though not necessarily No. 1. The building will compete with system goals such as bolstering health sciences, a project for which Chancellor Jim Rogers is looking to raise $38 million to match public funding.

Rogers says Harrah's Entertainment CEO Gary Loveman and he agree their lobbyists should talk to every legislator before the 2009 session is under way.

"I would hope that the Legislature would step up and do what I think is the Legislature's share of this project," Rogers said.

"Let's say we've got somebody else we can hit up for $25 million," he said. "I would rather not use this private money to fill this void, but to build something else."

With regard to whether the Harrah's facility will be the system's first priority, he said, "I don't remember saying No. 1. Maybe I used the words 'top priority.' The point is this: We will make every effort to get it through and it's unbelievably important to us."

If the Harrah's project succeeds, it will show private donors that if they throw in, the state is willing to do its part, Rogers said.

"I'm just really delighted because I think it's a vote of confidence in the system," he said of the Harrah's donation. "There's money and then there's real money. And this is real money."