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October 21, 2014

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NBA team ‘under contract’ if Las Vegas builds an arena

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JOB CREATION

According to Chris Milam, the point man for the proposed Silver State Arena, the project would create thousands of jobs. Nevada leads the nation in unemployment, having recently surpassed Michigan, home of the for-sale Detroit Pistons.
Steve Sisolak

Steve Sisolak

Chris Giunchigliani

Chris Giunchigliani

An investment group seeking to build an arena on the Las Vegas Strip claims it is on the cusp of purchasing an NBA team to play in the facility.

For the deal to go through, said Chris Milam, CEO of International Development Management LLC, the group must strike a deal with the county to fund construction of the arena — dubbed the Silver State Arena — slated for the old Wet ’n Wild water park site.

“We have an NBA team under contract,” Milam said, declining to name the franchise. But the deal will take effect only if “other pieces of the puzzle fall into place: One of those pieces will be that a building (arena) is approved,” he said.

The key to Milam’s plan is persuading Clark County to revive its redevelopment area and fund the arena using what is known as tax-increment financing.

Milam is scheduled to make his case to county commissioners at an Aug. 4 meeting.

Commissioners last month discussed arena proposals — three plans have been floated this year — but did not vote on whether they would support construction of any project. Based on their remarks, there appeared to be little support for any arena plan requiring public assistance.

Of the three proposals, two call for formation of a new tax district along the Strip to repay public bonds that would fund construction.

Milam’s plan calls for resurrection of the county redevelopment district. Developers would then be allowed to keep increases in property tax revenue over current levels. Taxes derived from the district to support the arena would be capped at $125 million.

The county dismantled the district — it encompassed a small swath of land that includes the Wet ’n Wild site and some older properties to the east, along Sahara Avenue — a year ago and redistributed its funds to the state and other entities that would have received the money had the district not existed.

Milam will bring his plan to commissioners in their capacity as overseers of the district.

Commissioners have been noncommittal on Milam’s plan, but at least one said their outlook might improve if Milam does, in fact, have an NBA team “under contract” and needs only arena approval for the deal to go through.

Commissioner Steve Sisolak, who has been less than enthusiastic about arena plans requiring public funding, said having a team ready to play in the arena “would be a game changer.”

“It would mean a lot, carry a lot of weight. They’d get a lot more attention,” he said, adding that he’d “like to see those contracts.”

Las Vegas has long wanted to lure an NBA franchise and league officials, though hesitant because of legal sports betting here, have shown some interest. The 2007 All-Star weekend was held in Las Vegas and the league holds its summer league here.

NBA Commissioner David Stern has said relocating a team to Las Vegas is not a possibility until the city builds an NBA-quality arena.

“I think Vegas would be a great town for an NBA franchise,” Byron Scott, the Cleveland Cavaliers’ first-year coach, said Tuesday during summer league games at Cox Pavilion. “But I know there are people in NBA circles who are afraid of the gambling and other distractions you have here.”

Milam wouldn’t disclose the franchise he is working with, but Detroit Pistons owner Karen Davidson has said the franchise is for sale.

Milam is attempting to tailor his pitch to the current political environment, noting the jobs it could create and other community benefits it would provide.

The project would create 4,000 high-paying construction jobs, he says. Once it is completed, he estimates 7,000 direct and indirect jobs would be created.

UNLV’s basketball team could use the new arena at no cost and keep the revenue from ticket and merchandise sales, he said. Beyond the $8 million or so UNLV would reap from such an arrangement, he believes a new arena might help recruitment.

“If you’re a talented kid from anywhere in the country and you have a chance to play in a $400 million pro arena on the Strip, what are you going to do?” Milam said.

In a year, he estimates, the site would host more than 220 events, including NBA and UNLV games, as well as National Hockey League games — he also hopes to secure an NHL team for Las Vegas.

“This might not be the politically expedient thing to do, but it’s the right thing to do for the economy,” Milam said.

But the politics of the project remains one of its biggest hurdles.

Commissioner Chris Giunchigliani, who spearheaded the effort last year to mothball the county’s redevelopment agency, said it matters little to her if Milam has a signed NBA agreement.

“It’s not the right location and it’s a traffic issue,” she said.

In June, commissioners read a staff report critical of creation of special tax districts to issue public bonds to build an arena.

In his report, county Comptroller Ed Finger hinted that the Silver State Arena was different because the redevelopment district was already in place. Further, Milam would begin collecting redevelopment district revenue only after the arena was built.

Commissioners discussed allowing voters to decide whether to support an arena tax district. After a short discussion, they moved on to other business, leading some to believe any prospects for an arena are dead.

Milam, though, said he will continue to work toward deals with the NBA, NHL and UNLV.

“If we lock up those deals, at some point people are going to scratch their heads and say, ‘What’s going on?’ ”

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