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March 31, 2015

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Developers lobby lawmakers for arena financing



A rendering of the proposed stadium complex behind Mandalay Bay.

For nearly two hours Thursday, a parade of out-of-state developers and their cadre of Nevada lobbyists delivered their pitches to state lawmakers for three competing arena proposals seeking government financing.

Each team used grandiose terms to describe those projects: Transformational. Monumental. Last-of-its-kind opportunity.

Majestic Reality’s Ed Roski promised his proposal for an arena, retail shops and student housing would take UNLV athletics to the next level.

Christopher Milam of Texas vowed his project would at last attract a professional sports team to Las Vegas.

Port Telles of Baltimore-based Cordish Company, promised his arena proposal would revitalize downtown Las Vegas.

But to deliver on those promises, each needs the tax dollars their projects would generate. That brought each of them to Carson City this week to try to convince lawmakers to spend the final days of the legislative session crafting legislation to do just that.

But Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, issued a pointed warning.

“We have to talk about the policy,” she said. “Folks forget we have to make sure the policy is right.”

That’s not something the Legislature has proven particularly adept at when it has tackled huge tax incentive legislation for so-called public-private projects in the final days of a session.

Kirkpatrick, who has spent the past three sessions trying to fix rushed government financing and tax incentive legislation, mentioned a couple of well-intentioned but problem-riddled examples.

In 2005, lawmakers passed a problematic green buildings bill that gave developers up to $1 billion in unanticipated tax breaks. And in 2003, lawmakers passed controversial STAR bonds legislation that syphoned tax dollars away from schools.

Senate Majority Leader Steven Horsford, D-North Las Vegas, said he wants to create an even playing field for each of the projects to compete for financing.

Generally, each of the three projects would be able to use a different mix of tax revenue for financing, including property, payroll, live entertainment, tobacco and sales taxes.

But only one project will get the tax dollars.

Whoever can piece together the financing, convince the Clark County Commission their project is best and get shovels in the ground within 18 months will win the government financing.

A bill by Horsford, however, has pitted each developer against the other. And each company’s team of lobbyists is working to insert provisions that might give their project a leg up.

For instance, the city of Las Vegas believes the Clark County Commission would never approve a project that goes to it. Instead, it wants a regional planning commission with city, county and school officials to make the decision.

It also wants the ability to use tax dollars from the entire redevelopment district to finance the project, rather than just those generated by the arena — a provision Horsford opposes but could still be possible under the amended bill.

UNLV likely would collect substantially more property tax revenue to help finance the project.

Milam wants the ability to assess a 12 percent surcharge on tickets and concessions. In another example of last-minute legislative maneuvering, that 12 percent surcharge was written into an entirely separate bill — Senate Bill 502, a medical tourism bill.

Horsford acknowledged that he wrote the original bill after asking each project team what they would need to make their financing pencil out. But he said lawmakers would ensure the legislation is written fairly.

“Sometimes things get rushed through at the last minute and consequences get determined later and people need to fix it,” he said. “I completely agree we need to be deliberative about this process.”

In the meantime, Caesars Entertainment, which is behind a ballot measure asking voters to increase a special Strip sales tax to finance its proposed 27,000-seat arena, is largely cut out of the deal.

Horsford’s bill applies only to arenas with at least 35,000 seat. Nothing against Caesars, Horsford said, he just thinks Las Vegas needs a bigger stadium to retain important events in danger of leaving and attract new ones.

Lobbyists for Caesars have proposed an amendment that would shrink the seat-count to fit their project, but Horsford doesn’t seem willing to deal on that point. No one from Caesars testified Thursday.

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  1. They want to build it, let THEM pay for it. The last thing we need is another mega project on the strip. If they are going to build it, let them do it on some of the empty ground south of LVB and the 215. Much better access, LOTS of parking space and easier for locals to get to, after paying exorbitant ticket prices.
    I don't believe that Las Vegas can support any kind of 'pro' sports team anyhow.

  2. The government should not act as a venture capital firm. A business should raise its own capital. If the private sector doesn't want to finance the project chances are its because the project is a losing endeavor. No corporate welfare.

  3. I'm with you fellows on this one. No subsidies for private businesses - PERIOD!

  4. Privatizing profits and socializing the expenses.

  5. No public funds, period.

  6. If they want to use my tax dollars, they need to find a way to increase my income by an equal amount.

    If the tax payers fund it they are on the hook for the bottom line. They will be responsible for any deficits. Accordingly the tax payers should receive any profit that results.

    Let's try something new and novel. Lets reverse the deal the taxpayers usually get. Let the developers pay for it and any losses while the taxpayers get any profit and benefits.

  7. If the city and the tax payers want to do this then cut the middle man out of the picture he is not needed. then the pay back would be shortened considerable. How ever has anyone looked at the media contracts who gets what.
    Here's a better deal put it on the ballot for the people to vote on.