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December 21, 2014

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A look at 3 proposed arenas as legislators mull financing of competing projects

Lawmakers rushing through the final hours of the legislative session are mired in debate of a bill that could give one of three competing arena projects millions in tax dollars.

The legislation, Senate Bill 501, not only pits three powerful development companies against each other, but two key legislators.

Senate Majority Leader Steven Horsford, D-North Las Vegas, eager to pass legislation with the potential for creating jobs, is the bill’s primary sponsor, throwing the full weight of leadership behind the proposal.

But Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, who has a reputation for scrupulously analyzing any legislation that diverts tax money to private interests, could be in charge of the bill’s passage through the Assembly. And she hasn’t seemed too friendly during the three days of hearings she’s conducted into the legislation.

“If it wasn’t for this committee we all would’ve given away the farm and you all wouldn’t have been happy,” Kirkpatrick quipped in the middle of an hours-long hearing with developers from each project.

Generally, the bill would allow each developer to use the state and local taxes generated by their project to finance its construction.

As the bill winds through the process, here’s a snapshot of the projects vying for the funds:

    • Stadiums
      /Las Vegas National Sports Center

      The Las Vegas National Sports Center

      Developer: Texas-billionaire Chris Milam
      Lobbyist: Former state Sen. Terry Care
      Project description: Milam is proposing a three-phase project that would include a 9,000-seat ballpark for a Triple-A baseball franchise; a 17,500-seat arena to attract an NBA or NHL team; and a 36,000-seat Major League Soccer stadium on 63 acres west of Interstate 15, near Mandalay Bay.
      Tax revenue sought: $4.8 million a year in property taxes; $1.8 million a year in sales taxes; $13.6 million a year in live entertainment tax.
      Pitch: Milam said he is prepared to have shovels in the ground by the end of the year on the ballpark if the legislation passes. Each phase of the project is designed to expand to accommodate a major league team, which Milam says he is in talks to bring both MLS and NBA teams to Las Vegas.
      Red flags: Major obstacles exist to bringing professional-league teams to Las Vegas and past efforts have failed. The possibility exists that only the ballpark, which would become the Las Vegas 51s’ new home would end up being built. Milam controls the site but does not own it, and other proposals are being considered for the land.

    • Downtown arena

      City of Las Vegas

      Developer: Baltimore-based Cordish Co.
      Lobbyist: Former Assemblyman David Goldwater
      Project description: A 20,000-seat arena in downtown Las Vegas, next to the Smith Center for the Performing Arts.
      Tax revenue sought over 30 years: $135 million ($21.4 million in sales tax; $50 million from special assessments on private parking spaces in the district; $64 million in live entertainment tax.)
      Pitch: The arena is proposed as a redevelopment project to revitalize the blighted downtown area. Project developers anticipate 180 concerts a year at the site, which they believe will become the community’s “play room.” The developer is seeking only 75 percent of the tax increment generated by the project.
      Red flags: The Cordish Co. is asking the city to back its financing with general obligation bonds, which would put city taxpayers on the hook if revenue from the project doesn’t generate enough to cover the financing. Cordish also is seeking a $1,000-per-space special assessment on all private parking spaces within 3,000 feet of the project. The World Market Center, which has 5,000 private spaces, estimated that would cost them $5 million.

    • Proposed UNLV Stadium
      Photo by Sam Morris

      UNLV NOW

      Developer: Los Angeles-based Majestic Reality and Ed Roski.
      Lobbyist: Mark Fiorentino
      Project description: A 150-acre mixed-use development, including student housing, retail, educational facilities and a 40,000-seat events center to house UNLV’s football and basketball teams.
      Tax revenue sought: $33.2 million in sales and payroll tax over the four-year construction period; $28.3 million in sales, live entertainment and payroll taxes a year after construction.
      Pitch: The project would bring UNLV football to campus, provide the campus with much-needed student housing and campus amenities.
      Red flags: UNLV’s project has drawn few critics because it would revitalize the campus and generate revenue. The way the bill is written, however, it would allow only one project to go forward, which could put the public-policy goal of improving UNLV at risk. As with the other projects, some elements of the deal remain speculative. Also, as with all of the other projects, dedicating part of the state’s tax revenue stream to a special district such as this could handcuff lawmakers, preventing them from making changes to the tax structure in the future.

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