Regents to hear UNLV arena plan for football, basketball

Proposed UNLV stadium

Should the proposed arena be built near the UNLV campus?
Yes — 90.0%
No — 10.0%

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The surprise proposal to build a sports arena to replace the Thomas & Mack Center would burnish UNLV’s image, galvanize the sports programs and, at a time of state austerity, provide the campus with a source of nontaxpayer dollars, officials say.

But winning approval to build it won’t be a slam-dunk for the university or the developers who pitched the idea.

The devil, Regent Mark Alden says, is in the details.

Alden is one of 13 Nevada System of Higher Education regents who will review more details at a special meeting Feb. 11 and decide whether to approve further negotiations.

Clark County Commissioner Steve Sisolak cautions that “this has come to the top very quickly” and months of negotiation and hard thinking lie ahead.

Both Alden and Sisolak say they are excited about the idea.

The developers — Edward P. Roski Jr. and Craig Cavileer — have scheduled a news conference Tuesday to unveil specifics of their proposal before presenting it to regents.

Roski, who helped develop the Staples Center in Los Angeles, and Cavileer declined to comment for this article.

This much is known, according to people briefed on the project and familiar with similar projects:

• The arena would cost hundreds of millions of dollars and take at least three years to build. The project could employ 2,000 or more workers in Las Vegas’ depressed construction industry.

• UNLV’s contribution to the public-private partnership will primarily be land — 40 acres or more in what is mostly parking lot at the southwest corner of the campus — and will require little or no taxpayer dollars.

• The tentative design involves 42,000 seats for football games and a structure that would shrink seating to 22,000 or more seats for basketball games, according to regents’ Chairman James Dean Leavitt. It won’t be large enough for the 60,000-plus seats needed to support a professional football team — if ever the NFL were to drop its opposition to a Las Vegas team. (The Thomas & Mack Center seats 18,000.)

• The Thomas & Mack, which is more than a quarter-century old, would be renovated at a cost of at least $10 million and converted to a nonsports venue of shops and other commercial enterprises. A bridge might connect the new and old arenas.

• The Roski-Cavileer project might help retain such lucrative sellout events as the National Finals Rodeo, which is being wooed by Dallas’ Cowboys Stadium.

Click to enlarge photo

Neal Smatresk

But before all this can happen, there are hurdles, any of which could trip up the Roski-Cavileer project:

• Consideration by the Clark County Commission because the county owns some of the land at the site.

• Review by the Federal Aviation Administration on whether the new arena, because it is adjacent to McCarran International Airport, would pose a flight hazard to aircraft. But, according to Leavitt, the arena could be built 20 feet or so into the ground to ease such concerns. (In fact, excavations in Las Vegas are extremely expensive because of caliche, a very hard rock.)

• Review or action by the state Legislature because the project may require special tax treatment or the sale of public bonds. Like for all of higher education, the Legislature holds the purse strings for UNLV. The legislative session ends in June.

• Rivalry from two other arena projects, closer to the Strip, that are months or years along.

The project has excited UNLV officials because of the reputation — and money — of the developers.

Roski is part owner of the Los Angeles Lakers and his company, Majestic Realty, helped develop the Staples Center. He also owns the Silverton in Las Vegas. Craig Cavileer is the casino’s president.

Presumably they would want an exclusive arrangement with UNLV to shut out rival developers.

For the moment, UNLV President Neal Smatresk is saying little.

He noted that “no specific path has been determined” after the regents meeting.

Proposed location

The land in question, mostly a parking lot, is shaped like a lamb chop a few thousand feet away from McCarran and adjacent to the Thomas & Mack.

The site is bounded on the west by Paradise Road and on the south by Tropicana Avenue.

The site is majority-owned by UNLV, but not developed as part of the campus. The rest is largely owned by the county.

Sisolak said he has talked with representatives of Roski and Cavileer, UNLV officials and regents, and has an overview of the project but no detailed design specifications.

“The jobs are a huge motivating factor for me,” Sisolak said.

“Construction costs are really, really low right now, compared to what they were three years ago or five years ago,” he said. Combined with the cost of renovating the Thomas & Mack, the Roski-Cavileer project could exceed $500 million, he said.

Financing the project is key, Sisolak said. The talk so far has centered on what is known as a “university improvement district,” and which would need to be reviewed by the Legislature.

Although almost all the negotiations would be handled at the UNLV and county levels, he said, the Legislature would need to act by its closing, or hold a special session or wait another two years.

Bill Arent, Las Vegas’ director of business development, said he knew nothing about the Roski-Cavileer project, which is outside the city, but such improvement districts were common funding mechanisms.

Property owners agree to tax themselves, then use the money as assets to back bonds sold to the public, Arent said. Typically, $1 could be used to raise $10 or more from the public, an attractive idea at a time of historically low interest rates.

Two other projects have been proposed — one by Caesars Entertainment and the other by Cordish Cos. that has the support of Las Vegas City Hall.

“The first project that’s viable from a business plan perspective and funding perspective and goes forward would likely capture this market,” Arent said.

Sam Boyd Stadium Through the Years

Employees with Sun State Landscaping of Las Vegas continue to install a Turf Technologies Sports Turf at Sam Boyd Stadium Thursday, Aug. 14, 2003. Installation of the turf is nearly 90-percent complete. Launch slideshow »

Also up in the air is the fate of Sam Boyd Stadium, the 36,000-seat football field which is used by UNLV but is several miles from campus. “One thing at a time,” Leavitt said when asked about the stadium’s future.

“We know the value of a stadium to donors, we know the value it will have to the sports programs, we know the value it will have to the university community,” Leavitt said.

“We’re going to turn this into much more of a campus-feeling school rather than a commuter school,” he added. “I can go on and on about the upside to it, and I see absolutely no downside to it.”

Sisolak agreed. “At some point the state is trying to wean universities off all state support for athletics,” he said. “With the state cuts that we’re facing, this is an opportunity to ultimately bring in more money for the classroom.”

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  1. Super interesting. I hope they build!

    If this is accurate, particularly the part about little-to-no tax dollars being used, this seems like a good deal all the way around. It's surprising to me, though, that they're talking about "hundreds of millions of dollars" for a 42,000 seat stadium.

    Besides keeping Vegas competitive with Dallas, an on-campus stadium could really transform the football program. The impact of it should not be underestimated.

    Nevertheless, here comes the complaining...

  2. As the resident complainer I would note that $500,000,000 could provide 28,000 students $2,000 tuition scholarships each year for almost 10 years.

    Who is going to pay for the infrastructure improvements (roads and streets).

    If we took down some classrooms and academic buildings there would be plenty of room for the stadium.

    Close the athletic department.

  3. You are wiping out all those parking spots. Is there a plan for parking? If it doesn't increase taxes, seems like a nice project. I'd rather see open air or retractable dome instead of climate controlled, sterile environment that true indoor stadiums bring. Think Metrodome. Ugly.

  4. "Could exceed $500 million" for the stadium and renovations.

    The dollars are in the details.

    $500 million doesn't buy a lot these days--For comparison the Echelon represents $500 million of land and concrete. When you look at the cost it will be about $12,000 for each seat.

    Lets say the project is financed with 20 percent equity and 80 percent debt--the way homes used to be financed. $100 million down and $400 million over thirty years. The difference is that the developer will want to get paid for his equity investment each year. As a homeowner you only get a return on equity when you sell.

    In terms of interest on the debt-at 5% this an average of $10 million per year just to service the debt. If the project has a life of 25 years the principle works out to be about $15 million per year. If we are lucky the debt portion has a carry of $25 million per year or $500,000 per week for 25 years.

    The equity portion is a bit trickier. Lets assume a 10 percent return on this $10 million per year for 25 years. This guy didn't become a billionairre by getting CD rates. This is about $200,000 per week for 25 years.

    Right now the cost of the facility is about $35 million per year to just finance it.

    Let's say O&M is another $7 million. I assume the facility pays no taxes or anything else. The cost to operate is $42 million per year. For simplicity let's say the total cost is $52 million per year to break even. This is going to require $1 million per week.

  5. Let's assume UNLV has 25 events per year, drawing 40,000 per event that is 1 million paying customers. If each customer pays $50 per seat the place breaks even. These are tough numbers. Where is the athletic department revenue?

    For the place to generate adeqaute revenue to break even and make the place would need to earn $75 for each event, again assuming 25 events and 40,000 paying customers at each event.

  6. The money has to come from somewhere. Think of it as $25/per seat per week. If the football team plays 6 home games per year and the basketball team plays 15, and assuming 40,000 tickets per event (way high for basketball) we are still 4 events short.

  7. The dollars are in the details. In order for this place to break even, it has to be filled regularly. If you think my math is screwy just think about what it takes to pay the mortgage, utilities and upkeep on a house.

  8. What are the naming rights worth?

  9. "You are wiping out all those parking spots. Is there a plan for parking?"

    The parking is the revenue stream which has the greatest potential--Think parking garages and think charging students to use the garages. Just a guess.

  10. If anyone has better numbers bring them on. This is a back of the envelop estimate intended to provide an idea of the magnitude of the financial commitments involved. This is very serious money.

  11. Parking garages, truth be told are not cheap. In fact they can be very expensive.

    Once again, the devil is in the details. You want some good accountants looking over every detail from a financial perspective.

  12. Turrialba, I'm sure, you were a supporter of Maxson and 'getting rid' of Tark also. You are an idiot!
    You will not be asked to do anything except voice your opinion for this project.
    I, on the other hand, I'm excited that my University is forward thinking and may finally get a football venue which is convenient for the student body to attend. I proudly support rebel athletics and see this as a way to truly move UNLV from state support.
    Go back into your bunker, load your weapons and watch for 'those people' turrialba!

  13. I think you're forgetting events such as 10 days of National finals Rodeo, several of Bull Riding, Motorcross, Monster Trucks, Boxing, and Concerts a year beyond athletic events.

  14. 1rebelfan--that is a pretty stupid comment. Looking at the numbers is part of the process. The fact that you want to go to UNLV events is fine, but know what they cost. You are just living in your frustrated jock world. More to life than the Rebels (paying to support the Rebels).

    lvworker--yes, there will be other events. I did not include them, however, I did overstate basketball attendence by 20,0000 per game (I assumed 40,000 attendees per game and 20,000 is a better number as noted in the article).

    Again my point is that we are talking about 1 million people per year to make this work.

  15. You guys are getting yourselves all worked up over pure speculation at this point. Wait and see what they have to say at the press conference on Tuesday. From what I've read so far, the funding seems pretty simple and straight forward.

    BTW, has anyone seen anything in the RJ about the arena? Maybe I missed it but I figured they were just continuing Sherm's policy, "If you can't say anything bad about UNLV, don't say anything at all."

  16. Tony speculation is part of the fun. It gives some context to assess the numbers we will hear about tomorrow.

    This is an interest project from the standpoint of its economics. Assumptions about concerts are interesting given that the casinos are in that business right now. The space at the Thomas Mack center is another unknown.

  17. What is so wrong with Maxson?

  18. Obviously the UNLV events are just a fraction of the events that will be held there, especially if the T&M will not be functioning. THe NFR will be huge. You can almost guaranteee 10 sold out days for that. Not to mention concert events, the potential of NFL preseason games, maybe the Pro Bowl, the Las Vegas Bowl, a more than likely return of the NBA all star game, the UFC and Boxing events. This is Vegas, people will be knocking down the door to use this facility.

  19. If you're speculating, don't forget concessions. Those six dollar beers add up pretty quickly.

    One of the early stories mentioned retail and possibly a hotel. There's some income sources there to be figured in. Also, there will probably be a tax increment financing district around the stadium.

    For you anti-tax folks, if you don't want to pay the extra penny - don't go to these businesses.

  20. I don't understand a couple of things:

    1) How does a 42,000 seat stadium plus $10M in renovations to the T&M cost $500M?! The University of Phoenix stadium in Scottsdale has a retractable dome, a retractable field, seats 78,000, and only cost $455M!

    2) How can a football stadium realistically expect to double as a basketball arena? I know this is done for events like the Final Four, but UNLV basketball begins playing at the beginning of November while the football team is still playing (and well before any bowl games we might hope to host). I don't see how this would work logistically.

    I'd be thrilled for UNLV to get a new football stadium closer to campus. I don't understand, however, the mentality of spending $500M+ on a 42,000 stadium that can't host the biggest-ticket events like the Super Bowl, a BCS Bowl game, the Final Four, etc.

    If you're going to spend $500M on a stadium, why not build something that will bring the most revenue to a city that has the infrastructure, allure, and economic need to host the biggest-ticket events in sports?!

  21. The only thing that gets done with 20% down nowadays is SBA financing. If you don't know about construction or banking, you should probably refrain from banging away at your keyboard.

  22. As a follow-up to my previous comment, it hardly seems like 42,000 football seats is aspiring for much. How many major football programs have a stadium that holds 42,000?!

    Just looking at our local football stadiums for respectable programs:

    U of AZ = 58,000
    UCLA = 92,000
    USC = 93,000
    BYU = 65,000
    Utah = 45,000
    Arizona State = 73,000

    If UNLV plans on becoming a respectable football program (or if we hope to host any major bowl games), it stands to reason that 42,000 seats won't be sufficient. It seems like expanding the seating in a dome would be difficult, so this seems a bit myopic in terms of size.

  23. Remember, sports fans, all of these projects have cost overruns, construction delays, etc. This will end up costing almost double as Jerrydome in Dallas did. Also, during construction things change and costs add up. This will be another white elephant.

  24. Turrialba:

    Just to put your mind at ease per the accademics side of things...

    New construction for students since I graduated in 04... This list is just off the top of my head...
    Engineering building, The Wright building, A new arts facility, Overhaul to put in a law school, New Student gym, a few new dorm buildings, New Student Union, At least one Parking Structure, and an off campus dental school...

    In the last Decade...
    A brand new state of the art library, office space where the old softball field sits...

    In the last 20 years....
    The CBC building complex, Physics building...

    That's pretty good bang for your buck... Not to mention since 2000 there has been free money available to every Nevada student to go to college in Nevada, in the form of the Millennium Scholarship... I mean that is a pretty significant commitment to academia....

    But without athletics we can go one of 2 directions... We could possible be MIT west (not likely)... or more likely we can be just like the University of Phoenix (they're a tier 1 right?)...

    As I have said athletics helps give the university an identity... The ivy leagues even have athletics... Stanford finished top 5 in the nation in football this year... Take it for whats its worth, but athletics is not this burden to academia you would like it to be....

    And I have not even scratched the surface at the amount of money the state has dumped into CSN...

  25. There is a serious parking problem on campus and this proposal apparently will take up "40 acres of land mostly parking lot"? What is the plan for student and faculty parking on campus, particularly the southeast side of campus, near the Student Union, Beam Hall (Business College), the fancy new Greenspun Hall, and the President and his Cabinet's reserved parking spaces?

  26. "The only thing that gets done with 20% down nowadays is SBA financing. If you don't know about construction or banking, you should probably refrain from banging away at your keyboard."

    Jerry,

    As I said these are back of the envelop to get an idea of the amount of money necessary to get this done. If you know about construction and finance, chime in.

  27. Newcomer - I don't think the $400-500M figure came from a reliable source. I think it just came out of chatter that followed an earlier story.

    I could see a $400-500M project cost if it includes retail, student housing, and a hotel as mentioned initially.

    Sam Boyd Stadium holds around 37,000 and we can't fill it unless the visiting team has a large following. Maybe they want to keep seating to something we can hope to fill and maybe there's site restrictions.

    As to BB in a dome. Syracuse plays in the Carrier Dome and the SA Spurs used to play in the Alamo Dome. I'm sure there's others.

  28. Build something. Time to build the "Oscardome"

  29. @Chickenlittle--we have spent quite a bit on buildings. This could be asking for more.

    I guess one question I have is how do you move 42,000 people in-and-out for events.

  30. $500 million a lot, but this is fairly congested area now in an urban area (with an airport in the neighborhood) and getting the roads right could be an expensive undertaking.

    Target Field cost $400 million and seats 40,000.
    The new stadium in Miami, with a retractable roof is estimated to cost over $500 million, including a $100 million for road improvements. In these instances there were municipal/stadium authorities involved which may bring some financing help.

  31. All this speculation about cost and feasibility is moot unless you're privy to the financial information of the Thomas & Mack. Assuming 25 events in a calendar year is ridiculous. PBR and NFR take over two weeks between the two of them. There are currently 6 events listed on UNLVtickets.com and then add UNLV's approximately 16 basketball home games, UNLV football home games, The MWC tournament, Disney on Ice and various concerts.

  32. Real simple Jerry

    Let's pay cash:
    $500,000,000
    25 years

    This is $20 million per year in depreciation and the average return of 10 percent on average balance is another $10 million per year (average balance of $250 million over the life of the project). This is $30 million per year. How about $10 million to market the place and $10 million O&M per year.

    This is $50 million per year or $1 million per week or each seat has to generate about $23.80 per week just to cover the cost for the facility.

    If UNLV gets a decent lease based on the gate, that might be worth while. There will be a lease and some cash flow to the guaranteed from project from the university.

    I assume the developer will be at risk for the other events.

  33. Let's assume the cost to finance and operate the place is $36.5 million or $100,000 per day. This is about $2.40 per seat per day. $50 million per year is $136,000 per day or $3.26 per seat per day. If you sell the place out everyday of the year, terrific.

    If this is the developer's problem, great. However, if the risk is somehow shifted from the developer to the state or UNLV, through guarantees etc, this is where the trouble starts.

  34. Turrialba,
    Please stop writing. You are giving me a headache with so many irrelevant and ignorant comments.
    GO REBELS!!!!! build it.

  35. Too bad Carlos. Better get used to it.

  36. You are a moron Terrialba!!!

    "Yes, there will be other events. I did not include them."

    Nevermind the fact that NFR is the highest grossing event we have in vegas. You have no clue about what you are talking about. And UNLV athletics is part of the fabric and culture of this city - "getting rid of Rebel athletics" is only an option for someone who doesn't understand or care about Las Vegas.

  37. There seems to be a lot of assumptions that NFR will stay if a new venue is built in Las Vegas. This isn't the case, whilst NFR is quite happy with the current venue, most rodeo fans are closer to Texas.
    This will be the determining factor on whether NFR stays in Las Vegas in the long run and whether the Cowboys stadium can accommodate NFR for 2 weeks in December.

    The new stadium/arena would still be competing for UFC and boxing and concerts with the MGM and wouldn't necessarily bring more events to Las Vegas. UFC won't suddenly decide to hold more events in Vegas, when it already hosts around 5 events per year.
    The MGM has been winning these events in the last 5 years because they pay more than the T&M. MGM is prepared to lose money at the gate, to win money at the casino.

    Looking at the numbers there seems to be a lot of risk in this project, which leads me to assume the local government will be asked to underwrite. I want this project to happen, but I don't want Nevada/Las Vegas residents to be saddled with a debt of $100-500m.

  38. @Turrialba....Hey, it's obvious the "jocks" sure did a number on you in High School. Trust me, I know how bad they can be. Still, it is time to let it go. If you don't think this project makes fiscal sens, I can respect that. But to take every opportunity to call out for the elimination of the entire athletic department is just so sad. Especially when no matter obvious the academic, financial and social benefits this department has provided for decades you can't see past the painful memories of every swirly you endured.

    Okay, that being said. You provided some pretty interesting numbers. I am going to give you the benefit of the doubt and just accept you accounting. You've concluded that 50 million a year is the magic number. Wow, that seems daunting.

    Including this one, there have been 40 posts on this so far. Sixteen are from you telling as all -- as many ways as you possible could -- that this project would need fifty million or so in revenue. You have said this 16 times.

    That surely was some good news. You see, according to the OPE Equity in Athletics (a division of the US Department of Education) studies UNLV had decent revenues in 2009-2010 (once revenues earned from it's current facilities were factored in. According to the OPE (http://bit.ly/eFKjpd) UNLV's revenues were in excess on $61 Million. And that is with less seats an no hotel or dorm rent.

    When will realize that a program that's has been credited with benefiting Southern Nevada economy in the upwards of a billion dollars, was able to accomplish that by being fiscally responsible?

    And you should also keep on mind that the State of Nevada also makes money on every one of the tickets sold -- to the tune of 10% of their face value.

  39. Remember that the jobs this brings in will also create tax revenue from the workers aswell. Not only from the jobs, but also the money that they will be spending/Gambling that will create tax revenues. just saying.....

  40. Turrialba is a troll people and you keep feeding him everytime you respond.

    This arena speculation is ON FIRE!!! I love it. Finally some passion from people, it would be interesting to see the number of comments in total this subject has generated. Right after tue Erik Scott subject this has to second.

    This stadium project will consume parking area that hasn't had a car(student, visitor, or any other) parked on it in 10 years. The largest savings for the project will be the land being donated. Which by the way was do ated to UNLV 10+ years ago. The stadium will seat 48,000+-ish, closer to 50,000 then to 40,000. It will have a retractable roof and a newly renovated Thomas & Mack Center will still be the home court to "Your Runnin' Rebels". The total construction cost of the arena itself excluding land aquisition(won't have to) will be in the $350-380 million range.

    "What's wrong with Bob Maxson?" Turrialba that question alone relogates you to the irrelevance pile. The guy single handedly(I guess Elaine Wynn counts too) pushed UNLV educational progression and growth behind for 20 years. The last 20 years, instead of growing year in and year out, was spent trying to recover the momentum of the only profitable depart UNLV has. Go Troll the Long Beach State forums with your silly anti-athletics nonsense. We've seen that snake oil before.