Thursday, Aug. 2, 2012 | 12:04 p.m.
A ruling Wednesday evening by the Nevada Supreme Court will indefinitely stall the effort to build a 20,000-seat arena near the Las Vegas Strip, says the chairman of the group developing the project.
The Caesars Entertainment-backed arena suffered a major setback when the court invalidated roughly 200,000 signatures collected in support of a ballot initiative to raise the sales tax to fund the $500 million project.
The initiative would have raised the sales tax by 0.9 percent in a tourism district within a three-mile radius of the arena, which would be built on land donated by Caesars.
The ruling means the effort to place the initiative on the statewide ballot this year is “at the end of the road,” said Bruce Woodbury, chairman of the nonprofit Las Vegas Arena Foundation, which was formed to develop the arena.
“I’m not optimistic that there’s any further light at the end of this tunnel. We’ll have to talk about whether we can regroup and what to do next,” he said.
Woodbury said lawyers would review the decision to see if there are further grounds for rehearing the issue, but with Election Day fast approaching, the window to get the initiative on the ballot is shrinking.
The Supreme Court’s ruling, reported Wednesday night by the Sun’s Jon Ralston, comes after months of legal wrangling and fierce opposition to the proposal from the rest of the gaming community, including MGM Resorts and Boyd Gaming.
Caesars has been working to bring a stadium to the Strip for several years. An attempt to pass the sales tax increase through the Legislature in 2011 was met with hostility and fierce lobbying, said Woodbury, forcing arena proponents to turn to the ballot initiative, which began collecting signatures in 2010.
A total of 221,874 signatures were certified in support of the initiative, far more than the required 97,002, but a suit by the Taxpayers For the Protection of Nevada Jobs, a nonprofit backed by MGM Resorts and Boyd Gaming, challenged the validity of those signatures.
In a June 19 ruling, the Supreme Court ruled that the petition’s description of effect — a 200-word summary of the proposal — was misleading because it didn’t make clear that passing the initiative would effectively kill other competing stadium proposals in the area.
The Supreme Court then kicked the case back to the lower courts to reword the description of effect. On Wednesday, the Supreme Court agreed with an argument put forward by Taxpayers for the Protection of Nevada Jobs that under Nevada Revised Statute, any changes to the description of effect would invalidate the already collected signatures.
Scott Scherer, an attorney representing Taxpayers for the Protection of Nevada Jobs, said his group took issue with the way arena supporters went about gathering signatures.
He said the ballot initiative, which included specific provisions on how and where a sales-tax funded arena could be built, was written specifically with the Caesars arena in mind and prevented any other competing proposals from benefiting from the tax increase.
“It would not have permitted any of the other proposals to take advantage of this particular initiative,” he said. “We don’t think they would have gotten enough signatures if the impact on competing arena proposals had been disclosed.”
Stadium and arena proposals in and around Las Vegas have been bandied about for years, but none have come to fruition.
“Every competing proposal would not qualify under the language of the initiative,” Scherer said. “The competition from a taxpayer-supported arena is also going to have an impact on people being willing to spend private dollars on an arena.”
Caesars Entertainment feels Las Vegas needs an arena to stay competitive as an entertainment destination, and the ballot initiative provided the most direct way of funding one, said Marybel Batjer, Caesars vice president of public policy and corporate social responsibility.
“We feel strongly that in order for Las Vegas to remain the entertainment capital of the world, we have to got to have a new arena, and it’s best that it’s on the Strip where 40 million people come to visit every year,” Batjer said. “If you take a look at the arenas that have been built throughout the country in the last 10 to 20 years, every one has needed some public funding to be financed.”
Batjer said Caesars is disappointed with the court’s ruling and it’s unclear what’s next for the arena proposal.
“We’re obviously still digesting it,” she said. “We believe very strongly in the effort that was put forth by the Las Vegas Arena Foundation board, but we’ll have to make a lot of considerations (before moving forward).”