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November 23, 2014

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New arena plans promise jobs but seek public money

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Steve Sisolak

Steve Sisolak

Competing proposals for a local arena large and modern enough to house a professional basketball or hockey team are making their way into the hands of Clark County commissioners.

If this sounds familiar, almost three years ago the Las Vegas City Council feted would-be arena developers as virtual saviors, with the prospects of bringing in professional basketball and drawings of a futuristic arena as the anchor for blocks upon blocks of surrounding development. Tagged onto the multibillion-dollar venture was even a Vegas-y name, the Pulse Project.

Then the economy soured and the Pulse failed.

But the idea of using public financing to build an arena has been revived. Two contenders want to build 20,000- to 22,000-seat arenas on or near the Strip, and county commissioners could be debating the proposals in two weeks.

Part of the pitch that commissioners — and union officials — like is that the project would create thousands of construction jobs over an 18-month period.

“What gives me interest is the jobs. That’s a lot of jobs,” says Commissioner Steve Sisolak, who has talked to proponents of both proposals in the past two weeks. In the same breath, he adds, “If this thing goes south like the monorail did, I don’t want the taxpayers to have to bail anyone out.”

One of the state’s most powerful company’s, MGM Mirage, says no tax money should be used on arenas, period.

“If any company, investor or developer wants to come to this town with a checkbook to build an arena, they should do so,” MGM Mirage spokesman Alan Feldman says. “We know, because we’ve built two of them. But the thought that anyone would be allowed to use taxpayer money to help a private interest build an arena is unconscionable — especially in a state in such dire condition that we’re slashing education and cutting subsidies for diapers and dentures.”

Details of both arena ideas aren’t completely laid out, but this is what the Sun gathered from county commissioners and some interested parties:

• One proposal would be for a 20,000-seat arena funded in part through a sales tax collected in a designated entertainment corridor near the Strip. Sisolak figures the tax would be about seven-tenths of a cent. Voters would first have to approve the levy in an advisory question on the ballot in November, he says.

Las Vegas Arena Foundation is the nonprofit group proposing this plan, with former County Commissioner Bruce Woodbury at its helm. Others on the board, which Woodbury says has not been completely filled, include Thom Reilly, a former county manager; Pat Shalmy, also a former county manager and retired president of NV Energy; and Danny Thompson, executive secretary-treasurer of the Nevada AFL-CIO.

Woodbury says his group is separate from Harrah’s, but the plan includes 10 acres behind the Imperial Palace that Harrah’s would donate.

Bruce Woodbury

Bruce Woodbury

The proposal says the project would create 2,100 on-site construction jobs and 1,300 off-site construction jobs. After opening, the arena would directly support 3,000 jobs and create another 1,000 locally. Groundbreaking would likely be next year, Woodbury says.

Total cost for the 674,570-square-foot arena would be about $488 million. The land donated by Harrah’s is worth and estimated $182 million.

• The other proposal comes from Texas-based International Development Management to build what documents call the Silver State Arena. Its seating would vary from 20,000 to 22,000 based on the event. The arena would be between the Sahara and the incomplete Fontainebleau, on the site of the former Wet ’n Wild water park. County records show the 27 acres are owned by Sahara Las Vegas Corp., a subsidiary of Archon Corp. Paul Lowden is listed in state records as president of Sahara Las Vegas Corp. His wife, Sue Lowden, a Republican candidate for U.S. Senate, is listed as secretary and treasurer.

A year ago, International Development Management tried to buy the 27 acres for an estimated $618 million, but the deal never materialized.

In documents filed with the county, the arena proposal would cost $751.7 million ($404 million construction costs; $347 million for the land), and would employ 4,100 construction workers. An analysis by the group said it would create 7,300 permanent jobs and generate $371 million in tax revenue over 30 years. Groundbreaking could be this summer The arena would be completed in the third quarter of 2012, the company says.

To finance the project, the company wants the county to resurrect the redevelopment agency that commissioners killed last year. The site is in a redevelopment zone, so if the agency is reinstated, developers could keep property tax revenue generated as a result of redevelopment. They would use that revenue to pay off bonds sold to finance construction. Clark County would underwrite some but not all of the bonds. Two-thirds of project’s debt would be paid off with tax revenue, with the remainder paid through taxes collected in the redevelopment area.

Echoing Woodbury, Lee Haney, executive vice president of Rogich Communications Group, which represents International Development Management, said Las Vegas “needs the arena to host bigger and better events.”

Commissioners like the sound of that, but they say a lot of the details still need to be worked out.

“If it involves any public funding, then I think the county should own it,” Commissioner Tom Collins says.

Tom Collins

Tom Collins

Commissioner Chris Giunchigliani, who pushed to mothball the county’s redevelopment agency, says she is amenable to increasing sales taxes on the Strip because it “would mostly tax nonlocals.”

Commission Chairman Rory Reid — son of Harry Reid, the senator Sue Lowden wants to unseat — says he is “reticent” to use public money on an arena but cannot ignore any opportunity to create thousands of jobs.

“If I’m going to support any kind of project right now, I have to know that it’s real and that it will benefit the community,” he adds.

Commissioner Lawrence Weekly was on the Las Vegas City Council when, after all the talk about a downtown arena, nothing ever came of it. “I won’t get my hopes up,” Weekly says.

The city’s plans died with the tanking economy.

An arena, though, is still an idea in the city’s downtown plan.

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