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StumbleFinancing plan would exempt the taxpayer …
… AT LEAST THAT’S THE PLAN being resurrected by a Chicago businessman who floated the notion of selling arena seating six years ago when Las Vegas tried to lure the Montreal Expos
Spencer Holladay
Wednesday, March 10, 2010 | 2 a.m.
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Sun archives
- New arena plans promise jobs but seek public money (3-4-2010)
- City OKs plan to study downtown arena, entertainment district (11-4-2009)
- Cordish projects include sports-anchored developments (11-4-2009)
- Goodman: 20,000-seat downtown arena could lure NBA team (10-29-09)
- Mayor seeking arena development deal for City Hall parcel (10-28-2009)
- With arena plan dead, what next for former REI Neon site? (8-2-2009)
- City quietly ends arena talks with REI Neon (10-15-2008)
- city holds out hope for arena downtown (8-21-2008)
- Told you, critics of arena play say (8-2-2008)
- Casino plan may survive arena's death (5-30-2008)
In 2004, when Las Vegas had perhaps its closest brush with landing a professional sports team — as the city pursued baseball’s Montreal Expos — a Chicago businessman hatched a plan to finance a stadium here without public money.
Las Vegas, of course, lost that big league bid — and a lock on the National League East cellar — to the nation’s capital. But the businessman behind it, Lou Weisbach, CEO of Stadium Capital Financing Group, which is majority owned by Morgan Stanley Principal Investments, hasn’t given up on the town or his financing plan, which he says has since been implemented successfully elsewhere.
“I believe there’s a need for a new arena, a state-of-the-art arena which would draw the best concerts and best events” to Las Vegas, Weisbach said Tuesday. “Ultimately, it would lead to a professional sports team — Las Vegas would already have had a professional baseball team if it had a stadium.”
Weisbach again focused on Las Vegas last week, after hearing two developers are pushing competing proposals to build arenas on the Strip — one behind Harrah’s Imperial Palace; the other just south of the Sahara.
Clark County commissioners were careful to keep their distance from the proposals when they surfaced. The reason: With price tags between $488 million and $752 million, both would require some form of public funding, an unpopular prospect at a time when the county is looking at a growing budget shortfall.
Weisbach, however, believes he has a solution to pay for either of the projects without taxpayer money.
While working with Mayor Oscar Goodman six years ago to finance a baseball stadium and lure the Expos to it, he came up with a stadium financing plan that The Wall Street Journal dubbed a “sports mortgage.”
Weisbach’s financing plan works like this:
His company sells seating and luxury boxes in much the same way developers sell homes.
The buyers are able to finance their purchased seats over several decades, similar to a home mortgage. They, of course, retain the right to later sell their seats for a profit or transfer them to another owner.
“As the value of tickets goes up, that would create value in that seat,” Weisbach said.
Last year, the University of Kansas and University of California, Berkeley, used the “Equity Seat Right” system to pay for expansions and renovations of their football stadiums.
“It would be great to be able to help facilitate an arena in the place where this idea was born,” Weisbach said, referring to Las Vegas.
At Berkeley, 3,000 seats were put up for sale, with the most expensive going for $175,000 to $200,000, financed over 50 years. Other seats were sold for as little as $40,000 over a 40-year term.
In September, Berkeley reported getting commitments from buyers for 2,000 seats.
Weisbach estimates an arena on the Strip would need to sell 1,000 seats, with the majority of the money coming from the sale of 150 or so luxury suites.
The two arena plans, as proposed, would require the Clark County Commission to sign off on the sale of bonds or a hike in the sales tax to pay for the projects. But Weisbach’s plan, because it doesn’t require public financing, would require little say from the commission, beyond zoning and other planning-related issues.
Chris Giunchigliani
Chad Wilkins, a consultant representing Weisbach’s group, laid out one proposal’s primary selling points. “In today’s struggling economy, this is a mechanism by which investment can be generated without public cost, to say nothing of the hundreds of jobs it would create,” Wilkins said. “It’s a common-sense approach.”
Still, some are sure to point to Southern Nevada’s experience with the financially troubled monorail. It was built with private money and might end up being bailed out by taxpayers.
Steve Sisolak
Commissioner Chris Giunchigliani expressed skepticism that an arena could truly be financed without public assistance, saying the “devil is in the details.”
Taxpayer assistance, she noted, isn’t always “a direct dollar” thing. Even if no upfront investment is required, taxpayers could end up paying for it on the back end through dwindling tax collections, tax exemptions or being on the hook for debt if the plan doesn’t work.
“In this business climate, we first need to have a survey of whether Southern Nevadans even want an arena and would use it,” she said.
In response to such questions, Weisbach was firm: “No taxpayer help. None.”
Commissioner Steve Sisolak, however, was open-minded, saying that “maybe this will turn that dream into a reality.”
If taxpayer dollars aren’t at risk, “it’s definitely worth exploring. It would bring needed jobs and potential business to Clark County — it could be a win all the way around. I’m not seeing the downside right now.”
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Maybe ... covers alot of sins. Public money should not be used to fund any private enterprise, with one exception - the public gets the majority of the money the project makes and the developers eat any and all losses.
You all have to realize the purpose of Morgan Stanley is to separate you from your money, not help you in any way. Did you forget the last mortage idea they came up with - eventual poverty for everyone but the executives at Morgan Stanley.
Fred Conquest
Democratic Candidate for Governor 2010
Will be retiring to Vegas in next 2 years and would definitly buy season tickets if Vegas had a pro football team. Minnesota Vikings could use a new home!
No downside? I think I've heard that before. Oh, ya. Nevada State College was also supposed to be totally privately funded, but it did not turn out that way. This sounds like another funding bait-and-switch scenario to me.
I'm all for it. Turn it into a corporate deal with stakeholders as private investors. It would bring lots of construction jobs here and employee thousands. However, MLB and the NFL would be the major drawers. I'd by season tickets (in a dome stadium only in LV) and I know of several of my co workers who would do the same. I've been to Camden Yards in Baltimore..seats about 45,000 people and it is one of the most beautiful parks that I've been to. I'm not sure that behind Harrah's is the most scenic place to put a stadium. Purchase the Calaway Golf Course on the Blvd and some surrounding parcels. This will give you quick access to the I-215 and I-15, as the grass on the golf course had to be uplifted for water conservation.
Why would we ever expect to get a professional sports franchise in this town? At the height of our "boom cycle" with the happiest mayor in the universe we couldn't succeed in drawing a team, so why would building a sports arena do the trick? This city, this community, would do far better to invest in education and research, clean energy technologies and transit before building an arena.
If you want to create jobs here, stop relying so much on construction and diversify the non-gaming economy.
I'm all for the stadium but I believe near the strip is a bad location. I would like to see it further out like near the speedway. Financing box seats is fine, 50 year mortgage seems a bit much. I don't know about financing the stadium seats. It would be $1000 / year + interest + taxes + maintenance charges for 40 years.
Great idea, I'd buy a seat or two.
Vegas badly needs pro teams here. There are much smaller towns with pro teams. What gives.
Baseball would be the best for Vegas. 80+ games, Vegas weather. Move the lowly drawing Tampa Rays with some incentives.
The Minnesota Vikings are going no where. The Wilf family will fund their own stadium in Minnesota if need be.
Im in for season txt's......maybe a luxury box if the financing is right......gotta have a pro baseball or football team here......it will also create jobs.......
"No public funds"...riiiiight. They told us the same thing when I lived in Houston...the year after the stadium was built they increased taxes to fund the stadium.
I would love for Vegas to get a pro sports team but its not going to happen. There aren't enough people to support a team. There are smaller towns that have pro teams but they also have bigger towns within 50-75 miles to bring in the people. It's all just wishfull thinking.
Build the stadium but not with my tax money
No public money ever for this dream project
I wonder if I could buy one of those seats with a low introductory rate, maybe an Option ARM or something?
^^ LOL
As long as the taxpayers money has no involvement in any way,shape or form, they can build all the gold plated sports stadiums they want.
Doing it for concerts and events...hoping and praying that"...ultimately it could lead a professional sports team..." is like trying to convince someone to buy a time share on the hurricane ravaged Gulf Coast. We certainly have plenty of wonderful venues for concerts and special events...we have venues that are the envy of the Country. Why not try to lure some spring training to Cashman...start out small, and one step at a time.
I've mentioned this before, but I think a basketball-type arena makes less sense than an NFL-style stadium.
First, a large football/soccer stadium could host more one-time events that attract tourists to Las Vegas. (Things like BCS bowl games, the NFL Pro Bowl, World Cup soccer matches, ESPN's X-Games, pre-season NFL games, and - someday - the Super Bowl would each bring in tens or thousands of tourists.) A football stadium could also host UNLV football and, perhaps, an MLS soccer team to generate ongoing revenue with support from locals.
A smaller arena that hosts a local basketball or hockey team would be nice, but locals would have to buy the tickets, and hotels and casinos wouldn't benefit nearly as much from a revenue multiplier.
In short, I think the Thomas & Mack is sufficient for basketball and smaller one-time events (e.g., PBR finals). What Vegas really needs is a stadium (similar to Cowboys Stadium or University of Phoenix Stadium in Scottsdale) to draw major events that bring thousands upon thousands of tourists to town.
Serious's idea about luring a team for Spring Training is nice, but you have to bring in at least 3-4 teams to make it work. Tucson is having a lot of trouble keeping their teams because they have to travel to Phoenix so much, which players hate.
If you only have 1-2 Spring Training teams, they can't just play each other 30 times in a row. If you could draw 4 or 5 teams, then you've got something.
Lets get one thing straight. There is only one professional sport that will work in Las Vegas and that is the NFL.
NHL? way to many home games and we cant even get close to selling out a minor league team.
NBA? 41 home games....the rebels play about 16-17 home games and those dont sell out....
MLB? 81 home games...middle of summer....and again we cant sell out or get even close to filling the 51's games. It would have to be a domed baseball stadium or at least a retractable roof. Sure, it the Yankees or Cubs were in town alot of out of state fans would travel to see the series but it the Marlins were playing here you wouldnt. And a baseball retractable stadium is for baseball, not football, nfr, concerts..
And now for the NFL!!!! 8, count them 8 home games (not counting pre season). Build a retractable dome like in Phoenix. Football fans travel to see their teams. "Lets see we are playing at Las Vegas in November? Oh yeah, we are going to that game!!!!!" And tourists who are in town for the weekend, whether a fan or not would be willing to go to a NFL game while they are here.
An NFL type state of the art stadium would also keep the NFR here. Twice as many seats as the Thomas and Mack would bring even more people to watch it, IE more money for the stadium.....If you build it they will come, but not to see baseball, hockey or basketball....
Having an NFL team would eventually bring the Super Bowl to Las Vegas, REVENUE!!!!
However all that being said, the NFL will NEVER allow an NFL team in SIN CITY. "Come on Man!!!!" They wont even allow Vegas commercials during the "big game".
Oh one last thing. DONT build it on the strip!!!! At least not near the hotels... traffic is bad enough in that area year round but to build a stadium? parking?
Build it at the south end of the strip away from the hotels. There is room for parking, and even a new exit from I-15 just for the stadium.
I think the problem with not selling out the Hockey, Baseball and Basketball games we have is that they're minor league/college. It's hard to get excited about that when 1) their venues, other than T & M, aren't that great, and the teams themselves aren't that great.
I also wonder if the games are having a hard time selling out because we have so many people that work odd shifts...it's not like most cities where a large number of the residents work normal work shifts.
I wouldn't count on the tourists to always go to those games. Sure, maybe here and there, but they have other things they want to do too.
It would be nice to have a pro sports team, but I doubt it would ever happen. Of course money talks so if a basketball team can move to Oklahoma City, I suppose anything is possible here.
MCondo hit the nail on the head. The NFL is probably the only team that would work well in Vegas financially, and there is no way the NFL would let a team move to Vegas (or expand here).
A combo NHL/NBA arena is #2 on the list. It takes up less of a land footprint, traffic is less of a hassle (~20,000 cars vs 50,000+ for a football stadium), and can be used for many other events.
The biggest problem is competition. Unless the casinos are in control of the *entertainment* aspect of the pro sports team (e.g. the arena empties out into or next to a casino like Harrahs plan is behind Bally's) they wont want the competition. The time a tourist spends outside of a casino is less money in their pockets (that's how they think of it). Two hours watching a NBA or NHL game, or the 3-4 hours for a football game is less revenue to them.
Its why any arena would be on or adjacent to the strip. Its why Oscar wants it downtown (so they can funnel the people into the downtown area before and after events).
how many failed sports teams will it take for people to get it???? and how many half empty concert halls does one city need????? the mack, the silver bowl, the mgm grand, and mandalay bay---how can someone say we need another concert hall??? you know all these people have some vested interest in doing this deal!!!!! You know, just like the monorail--it will start off with the locals not paying anything, and end up with the taxpayers bailing out the failed franchise! Personally I can't stand most of the professional players---the vast majority are real pieces of work--they frequent these casinos on a regular basis and mostly stiff the help and treat everyone like dirt--and want you to feel in awe of their presence---like it is some privilege to be serving them. Can you imagine the boom the strip clubs would have if the nba came to vegas?? No wonder oscar wants them here!
MCondo 924's post says it all. And the prices mentioned in this article would be about right. I know with the Chicago Bears season tickets, when Soldier Field was remodeled, my former boss had season tickets right in the first row on the 40 yard line (Pretty good if I say so myself!). Because the tickets (I believe he had to "repurchase them" and will never ever get rid of them) were so expensive, they became part of his Estate to be past down to future generations.
Look, Vegas tried before to get a baseball team with the promise of building a new stadium (I remember when all that was going on and I myself got excited hoping it would be a National league team coming to town) but Vegas was passed over and it will happen again and again. It just doesn't have the fan base. Only people living in Vegas and neighboring States will come to see a pro team and that is not enough; the tourists probably will not since they come to Vegas to gamble and drink not to watch baseball, football or basketball.
"Can you imagine the boom the strip clubs would have if the nba came to vegas??"
And Metro would be putting in a LOT of overtime! CCDC wouldn't have enough cells to put the a-holes in!
god, you bumpkins.
vegas doesn't NEED a pro sports team. GROW UP!
it's like "mommy, mommy...whaaa! whaaa! THAT city has a sports team, i need a sports team".
if you moved here knowing vegas didn't have a sports team...then you obviously really don't need a sports team.
if we didn't "need" one or we weren't able to "lure" ( i love that word...speaks volumes about this business ) one during 2000 - 2005...why would we "need" one now?
i think too many people that live in vegas confuse tourism money and local money.
at around 1.5 million adults, the percentage of the population that could afford to go to games on a consistant basis is very, very small.
and for tourists, unless THEIR home team just happened to be playing the vegas team, the chance that tourist is going to plop down $100+ for tickets, parking, drinks on a sunday is pretty slim.
and yes...it will bring some construction jobs...but then what?
just more $9 and $10 per hour jobs that simply will not provide enough income for those workers to buy houses, cars, etc.
we don't want more of those jobs.
and putting this thing on or near the strip is a horrible, horrible idea. could you imagine the gridlock on sunday afternoon when thousands of cars are leaving the game all at the same time?
just look at the absolute mess it is around tropicana / maryland when there's an event at thomas and mack.
it would almost have to be next to the 215 or 95 so those cars don't have to be on surface streets any longer than they have to.
just like how san diego has their stadium right there at the 15 / 8 interchange and st. louis has their stadium literally steps from 70 / 55 interchange.
Comment removed by moderator. Comment contained vulgar language.