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April 18, 2014

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Race is on to build Las Vegas’ next big crowd pleaser

Stadium & Arena Renderings

Artist rendering of the proposed downtown/Cordish arena. Launch slideshow »

Las Vegas may seem frozen in time, what with one would-be Strip resort — Echelon — showing only as a barely started steel skeleton and another — Fontainebleau — a towering, empty building.

Las Vegas’ construction gusto has been suppressed by the recession; the biggest developments in town are two large observation wheels.

But once either of those is completed, a passenger high above the Strip may well look down on the construction of a sports and entertainment palace of one sort or another.

It may be a sports arena downtown, next to the Smith Center for the Performing Arts. It may be an arena rising alongside the Strip behind Harrah’s and Imperial Palace, next to the observation wheel known as the Linq. It could well be a 50,000-seat, enclosed stadium at UNLV. Or it could be an arena on the south end of the valley, in Henderson.

The ramifications of an arena, and more so a stadium, would be significant, not just in terms of the benefits of a large construction project and the jobs it would bring, but the permanent jobs and other economic activity that would be generated by it. The arena projects, each in the 20,000-seat range, could be the catalyst in Las Vegas landing a professional basketball or hockey team while also accommodating boxing matches, concerts and other large events. The UNLV stadium project could have the biggest impact, not just in elevating the stature of the campus but by hosting 10 to 12 huge events a year that could draw hundreds of thousands of more tourists to town.

So don’t let the absence of big-scale construction in town fool you. Behind the scenes, competing developers on four fronts are maneuvering to start construction on what will be Las Vegas’ next big crowd pleaser. Here’s the rundown:

Downtown/Cordish arena

Downtown/Cordish arena

Artist rendering of the proposed downtown/Cordish arena. Launch slideshow »

Audio Clip

  • Mayor Goodman talks about the chance that more tourists than locals will use stadium
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Five years ago, then-Mayor Oscar Goodman staged a press conference with representatives of Real Estate Interests Group of Michigan and brashly proposed a $9 billion development with a 22,000-seat arena, three casinos, 6,000 hotel rooms, 1,500 condos and 1 million square feet of commercial space near Charleston Boulevard and Main Street.

The Blue Daydreams LLC project, more widely known as Project Neon Lights, collapsed with the economy.

But the idea of a downtown arena never died.

The latest is for Baltimore-based Cordish Cos. to build a $412 million arena/entertainment complex on about 13 acres at Symphony Park, near the Smith Center for the Performing Arts.

After the City Council signed a deal in November 2010, Bill Arent, the city’s economic and urban development director, said Cordish was “committed” to giving the city its financing plans in the next 12 to 18 months.

In March, Cordish presented renderings, but the firm has yet to reveal its financing plans.

The company did not respond to requests to update progress on the proposal.

The city would presumably have some role in the financing and effectively play the role of a co-developer, though details have yet to emerge. Other would-be stadium or arena projects are factoring the use of tax district financing to leverage long-term bonds as primary funding sources.

Arent cautioned against reading too much into how little information has been made available to the public.

He described the city and Cordish as “probably the most conservative” of the groups trying to put together an arena/stadium project.

“We don’t want to announce a schedule until we’re going to move forward,” he said. “We did a similar thing with the Smith Center. We didn’t announce the partners, contractor and lead architect until we had everything figured out.”

But make no mistake, Arent said, the city and Cordish are working on those plans, the most important of which are financial.

Arent talked broadly about possible financing schemes, such as the one that backed the Smith Center — the city leveraged a special vehicle-rental tax as a way to issue more bonds — but he wouldn’t elaborate.

“The short story is, that information is proprietary and we haven’t disclosed that to the public,” he said. “Ultimately, funding is going to drive (the arena). Most arenas are built with private and public funding. We’re trying to see what makes sense and trying to tap into as much private capital as we can.”

Arent won’t speculate on whether the Cordish project will be the first arena/stadium proposal to break ground in Las Vegas.

The city has successfully nurtured several large projects, including the Smith Center, World Market Center, a new City Hall and the Mob Museum.

Las Vegas Arena Foundation (Caesars)

Las Vegas Arena Foundation

Artist rendering of the proposed Las Vegas Arena Foundation project. Launch slideshow »

Audio Clip

  • Bruce Woodbury talks about why the Strip needs a new arena
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Planning is virtually complete for the $500 million arena that Caesars Entertainment wants to build east of Harrah’s and the Imperial Palace casinos.

Now the company is facing a legal sticky wicket to facilitate funding.

To develop the project, Caesars created the Las Vegas Arena Foundation and then donated land to it on which to build the arena.

When finished, the arena is projected to bring in an estimated $20 million in new taxes annually due to the increased economic activity — about $240 million per year — it is expected to generate.

But the project faces some legal questions that have involved the state Supreme Court.

Caesars wants to create a taxing district within a three-mile radius of the arena. This would not include parts of the area that include the city of Las Vegas, meaning people making purchases within the radius north of Sahara would not pay the extra tax.

Customers within the district would pay an additional 0.9 percent tax on purchases. The annual revenue yield is expected to be about $30 million. That money will be used as leverage to obtain bonds for long-term financing.

In June, the state’s high court ruled that because Caesars did not specify exactly where the arena would be positioned, the 220,000 people who signed a petition favoring the tax were improperly informed.

Still, the Supreme Court said the measure could go on the ballot.

Days after its decision, however, the justices decided to take another look at the case.

Former County Commissioner Bruce Woodbury, who is chairman of the Las Vegas Arena Foundation, said “95 percent of the tax would be paid by tourists. The average citizen would pay less than a dollar.”

The taxing district would have to be approved by voters statewide and then win the approval of the Clark County Commission — which has been loath to raise taxes of any kind in this economy but may bless a funding plan that has won support of voters throughout Nevada.

UNLV Now

UNLV Now

Artist rendering of the proposed UNLV Now project. Launch slideshow »

Audio Clip

  • UNLV President Neal Smatresk talks about the importance of sports for the university
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The people behind the massive project on the UNLV campus believe they have everything in place — short of a few final approvals — to break ground.

The 150-acre UNLV Now development calls for a 50,000-seat domed football stadium, housing for students and faculty, plus a retail district. Each component on its own can be a game-changer for UNLV: The stadium would elevate its athletic program — and in turn, the university’s reputation; campus housing for between 5,000 and 10,000 students would make UNLV more attractive to out-of-state students, and a retail/entertainment district would enliven the campus in the evenings and on weekends.

An early estimate put the cost of the project at $2 billion, but the developers aren’t talking about the costs.

UNLV Now is a collaborative effort between UNLV and developer Majestic Realty Co. They have enlisted architects, traffic engineers and finance experts and are aiming to win master plan approval by the university system’s Board of Regents this year.

Then, project developers hope a bill will pass quickly in the state Legislature — they’d like for it to happen in February — allowing construction to begin in the fall of 2013.

The bill would ask that the UNLV Now project be allowed to collect retail sales taxes from the retail/entertainment district. There is widespread support for the project and no known opposition.

As public property, UNLV doesn’t pay most property, sales and entertainment taxes. Project developers want to keep the same tax exemptions for property and entertainment taxes but be allowed to levy retail sales taxes at the same rate private businesses must charge. The developers would keep that tax revenue to help fund the project.

That steady revenue, in turn, would be used as leverage to secure long-term bonds, which would finance much of the project.

UNLV Now would occupy a big chunk of the western side of the campus. Some of the land is leased from Clark County, and county sources say the county would allow UNLV Now to use the property.

Millions of dollars have been spent on traffic, engineering and other preliminary issues, said Craig Cavileer, president of Silverton resort and Majestic’s representative on the project.

“You’ve got to get all the designing and planning, the electrical, mechanical, traffic, an FAA consultant and others to be sure you have a master plan with retail, which has its own life, and student housing; then you’ve got the stadium component,” he said.

“We have to make it work for Major League Soccer and international soccer, for football and concerts and corporate events, multiple NCAA bowl games, UFC and boxing matches — someone even mentioned international cricket — which are all different products,” he added. “This has never been done before. It doesn’t exist.”

Majestic Realty Co. developed downtown Los Angeles’ Staples Center in the 1990s and is competing to develop a stadium in Los Angeles as a home to an NFL team. Ed Roski, who founded Majestic and is co-owner of the Los Angeles Lakers basketball team and the Kings hockey team, said sports teams are an important part of the fabric of a city.

Cavileer talks about Majestic’s success in Los Angeles and says he envisions relatively similar results for the area around the UNLV campus, some of which is old and tired.

“What will happen, which is what happens every time, is there will be a demand by people who want to live nearby to renovate or tear down less-than-attractive products,” Cavileer said. “You’ll see the entire area transformed.”

Las Vegas National Sports Complex

Las Vegas National Sports Complex

Artist rendering of the proposed Las Vegas National Sports Complex in Henderson. Launch slideshow »

Audio Clip

  • Developer Chris Milam talks about recruiting a NBA team
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This project, which would be largely financed by Chinese interests, calls for an arena, to be followed over time by three stadiums, on 485 acres of land near the M Resort in Henderson. The proposal is viewed skeptically, given that it needs the participation of the Henderson City Council and because the developer, Chris Milam, has proposed other stadiums in the Las Vegas Valley that did not reach fruition.

About a year ago, Milam said he wanted to acquire the Triple-A Las Vegas 51s baseball team — and that he would build a stadium near the Strip where they could play. But the deal for the 51s never happened.

For his newest proposal, Milam has deposited $1 million in an escrow account to purchase land from the Bureau of Land Management to meet a Henderson deadline in the spring. In June, he was the only bidder for the 485 acres, agreeing to pay the BLM $10.5 million. He put down $2.1 million and needs to come up with $8.4 million more by Dec. 4.

He told the Henderson City Council in June, “In a very real sense, this project is financed now.” He said a Chinese company that makes surveillance equipment was “providing the majority of the money in a construction loan.”

According to city documents, CSST Smart Cities International and Milam’s Silver State Arena LLC have agreed to a memo of understanding, which states he may borrow $650 million at a 20 percent interest rate.

After Milam pays the BLM, Henderson would need to make arrangements to sell bonds for long-term financing for the first phase of the project, an arena suitable for an NBA team.

Milam’s spokeswoman, Lee Haney, provided the Sun with the name of the project’s architect, contractor and traffic consultant.

While supportive, Henderson officials are cautious, as evidenced by some provisions they laid out. They include giving the city the right to buy the 485 acres if Milam hasn’t made significant progress on financial and other details by March 2013. The city also has a stipulation that if Milam flips the property to another buyer for more than he paid for it, the city gets the profit. The provision is meant to keep him from doing so.

Milam doesn’t expect a delay. He told the Henderson City Council he hoped to begin construction in four months.

Handicapping the proposals

Which arena will get built?

Which arena or stadium proposal do you think is the most likely to be built?
UNLV Now — 63.4%
Las Vegas National Sports Complex (Henderson) — 14.7%
Las Vegas Arena Foundation (Strip) — 13.3%
Downtown arena — 8.6%

This poll is closed, see Full Results »

Note: This is not a scientific poll. The results reflect only the opinions of those who chose to participate.

The UNLV Now proposal seems to face the fewest obstacles, especially given that it is the only one that calls for the immediate construction of a 50,000-seat stadium. Such a facility would not compete with the arenas and in addition to benefiting UNLV would likely have a much larger economic impact on the region.

It faces no organized opposition to stymie approval in the state Legislature, and the funding plan would have the least effect on local pocketbooks.

Among the arena proposals, the Strip project sought by Caesars appeared to have the inside track until the state Supreme Court agreed to consider concerns about the legality of the petition drive that would send the proposal to the state ballot. Caesars, which collected more than 200,000 petition signatures during the recession doldrums of 2010 to qualify the proposal for the ballot, may be compelled to do it again.

Milam’s lackluster track record has generated skepticism about a Henderson arena, despite his bold proclamations of moving forward.

And the Symphony Park arena proposal? Its backers are playing it so close to the vest, it is hard to gauge the likelihood of it becoming a reality.

But this much seems clear: There is an appetite for both an arena and the UNLV stadium, and construction of one or the other, if not both, seems inevitable.

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  1. Lots of folks with their hands in YOUR back pocket. All a bit on the shady side - maybe study all of their collective failed projects and figure out what not to do and then in ten years make a decision.

  2. I'm skeptical.

  3. I think a little common sense would pick the ideal location. The strip is tooooo crowded as is. I would say Henderson would be a good location out by the M. Have some decent access right now to accomodate traffic.
    UNLV would be okay, but again too crowded in that area of town.
    I really don't think there should be more than one built and I really don't care what Oscar and his mayor wife think either all though they promote a lot more than the mayor we have in Henderson.

  4. Only the success of a UNLV football program is going to give any meaning to this stadium. It depends on your perception of UNLV football, and what it means to you. This stadium should be an on-campus stadium with the centerpiece UNLV football, which has languished precisely because of the lack of an on-campus site.

    I can't understand any site other than the on-campus one. Ok, go ahead, build on other sites, but that means you don't care about UNLV football, which will achieve national status if an on-campus site is built. "I guarantee it."

    This national status will do for LV what Tark's Rebels did years ago, and there's no excuse at this point why this could not happen. UNLV has a talented head coach and staff. They are bringing in talented players. LV is a big market and the media would love to come.

    If this stadium were built on-campus, UNLV could well vie for the national championship. It's just a matter of how much you value UNLV football, and, well, UNLV, itself.

    Work out the transportation issues, best you can, but don't let those issues trash an on-campus stadium.

  5. The UNLV proposal is by far the best. It would put UNLV on the map, the retail component will be a boon to the area, and vehicular access is convenient and ample. The Caesars Entertainment idea is unworkable based on its need for tax subsidies, and the downtown area is redeveloping just fine without a stadium.

  6. The UNLV Arena should be built immediately. Currently, as soon as a Large Arena is needed, you have to leave Las Vegas. The UNLV Arena would ensure that Major Fights, Concerts, Rodeos, Awards Shows, etc.. would have a Permanent Home in Las Vegas. UNLV recruiting of National Talent football players would be much easier, considering many other top universities have Arenas from 60,000 to 100,000 seats. Additionally Booster Clubs eventually become powerful groups and could help wield influence in UNLV having a Medical School.

    As for the other Arenas - Do not build one in the Middle of a Parking Lot. It will generate little additional revenue. Both the Caesars location behind the Strip and the downtown Location would work. Especially if the Monorail would go to the new UNLV arena (and on to the Airport) and to downtown (New and Old). You could even allow the MGM Monorail to connect at the MGM and carry passengers all the way to the Bellagio (requiring a walk-through connection to the Cosmopolitan) .

    So this is another opportunity for Planners to shape the region for 20 Years or more. Will they blow it again, or will they finally develop a comprehensive Master Plan that is best for Locals and Tourists by including a non car centric plan.

  7. Just to rain on every sports lover's parade, I want to point out that the vast majority of residents of Las Vegas cannot afford tickets to major league sporting events, and many do not care about sports. (I find UNLV officials' desire to be a sports dominated college particularly SICKO given what happened at Penn State, but that's another issue.) I spent 30 years in California working with its "redevelopment tax increment financing" and in my experience the rich are helped by those sorts of deals while the poor and middle class are hurt. For example, could someone tell me how LA residents were benefitted by their tax increment dollars going to pay for fancy brick sidewalks and palm trees in front of what is now the Marriott on Figueroa Street?

    California has now made tax increment financing ILLEGAL because it was a huge drain on the state's and counties' revenue stream in a time of great economic pain.

    The key for all of these stadium deals is in protecting the poor, the working class and UNLV students, making sure that these people are not ripped off in terms of payment of increased sales taxes or indirect payment of increased property taxes to support these stadiums. Increased sales tax around the UNLV arena will increase the cost of students books and meals. Clark County public transit s*cks and most UNLV students can't arrive by bus...yet UNLV's proposals would have students paying a huge tax for the privilege of parking in a parking structure which will sit on the college's asphalt parking lots. Increased sales takes around the Caesars arena will require all employees in that 3 mile radius to pay more for their lunches each day, and deter the employees of those businesses from shopping where they work. God forbid an existing supermarket serving poor or working class clientele ends up in one of these special tax zones.

  8. The other point to be considered is that putting a 50,000+ person stadium near the Strip, at UNLV or at the St Rose/15 intersection will massively screw up traffic, requiring mega millions of dollars in public money to expand roads to solve the traffic problems. You know darn well that the stadium developers will not pay for those traffic de-congestion road improvements over the long haul and the necessary mega-million dollar road improvements will be paid for at public expense.

    The traffic jam problem is a particular concern at the St Rose/15 Freeway stadium because of its prospect to make it hard for Californians to get into and out of Las Vegas. Californians are the life blood of Las Vegas casinos, and many of them will decide not to come here on a weekend if they are faced with a huge traffic mess created by 25,000+ stadium goers cars every time they come into town.

    Over the years, LA Councilman Hal Bernson had serious economic studies done, and the LA City Council learned that there was no net gain to the City or to the public if public dollars were used, in any way, to finance a football stadium for LA. So the sports loving developers made Councilman Bernson an offer to leave town, which we couldn't refuse, and now LA taxpayers are going to see much of their publicly owned Convention Center ripped down, and a 90,000+ person partially-publicly funded stadium jammed into Downtown at a place where there is not enough road capacity or parking to handle it. That political accomplishment is thanks to the construction industry unions who manipulate the LA Mayor, LA City Council and 2 Governors. City of LA residents will receive no long term benefit whatsoever from that stadium, except for part time jobs for ticket takers and popcorn sellers, like we see at the Thomas & Mack. The same will be true here.

    I would remind all Nevadans that Houstonians are still paying for the Astrodome's mortgage and upkeep, even though it is an abandoned leaky mess no longer used. The reason developers have such a tough time getting private mortgage financing for large stadiums is because the bankers see that the numbers don't work. That's why one sees all this boosterism for public financing aka tax increment financing of Las Vegas stadiums.

    To me, the only wise way to issue "municipal bonds" to finance a stadium in the Las Vegas area is to make them exactly like the Las Vegas Monorail bonds, i.e. no financial recourse to the public purse and no raising taxes if the venture cannot pay all of its costs. The Monorail bond holders lost all their investment, and frankly no public agency in Clark County, or its taxpayers, should wind up "on the hook" for paying stadium bonds or operating costs for any stadium. The public in Houston was suckered by the sports boosters, and we should be smarter than them.

  9. And, of course, there will be increased law enforcement costs necessary to deal with the stadium(s) and the traffic they create. I remind Clark County Supervisors and other stadium boosters that those of us who live southwest of the 215/15 intersection have TERRIBLE service from METRO, despite the existence of a new substation at Rainbow & Warm Springs. Everyone in the know acknowledges that Metro will not respond to burglary in progress calls, or active vandalism calls from neighbors seeing criminal activity in "the New Southwest". My own daughter came home one evening to find her next door neighbor's front door open, the house ransacked and the neighbor and neighbor's child not responding to shouts of "Hello". My daughter called Metro to ask for help, fearing her neighbors were knocked unconscious somewhere in the house by armed burglars who have been plaguing her area of $300,000 houses. Metro didn't bother to show up for close to 4 hours. The owner of the house later told my daughter that his tenant and the child were abducted as part of a 'child visitation dispute' by the ex-boyfriend/father of the child, who is a Russian gangster from LA. Yet despite the terrible service tazpayers in the New Southwest receive from Metro, I guarantee that if a stadium is built in Metro's jurisdiction, at PUBLIC expense there will be Metro officers directing traffic, providing security, and neglecting the rest of their jurisdiction despite Metro's "customers" paying BILLIONS of dollars in real estate taxes on their nice newer houses, plus a special sales tax, to finance Metro. Taxpayers in Henderson likely will have the same experience.

    The new political excuse/slogan local politicians is that "Creating Jobs". That slogan just code language for ripping off the average citizen for the benefit of a narrow group of people, and using their tax dollars to benefit the rich and the construction unions.

    The only fair way for any of these stadiums to go forward is for there to be a very aggressive attorney appointed to negotiate "deal terms" to directly protect the residents who neither want nor will benefit from such a stadium. All of these stadiums should be an absolute no-go if every economic, safety and traffic issue affecting the public is not fully addressed and paid for by the stadium developer and the teams or events which use the stadium AND NOT BY THE TAXPAYER. Middle class, working class or poor, homeowner or tenant, we are all taxpayers who the political class are obligated to protect, first and foremost. Of course, I cannot even count to 3 in terms of the number of County Commissioners or City Council members in Las Vegas or Henderson who are 100% trustworthy on "protecting the taxpayer" issues. Yes Democrat elected officials, I am talking about you in particular.

  10. The on-campus site would be great but the accessibilty is horrible. The roads aren't adequate and the airport is right nextdoor. A downtown or south of strip location would be better.

    As to making UNLV a football contender, I can't imagine as a taxpayer subsidizing a NCAA/BCS system as feasible. It's bad enough that we contribute to the NCAA's system of free labor in exchange for billions with our basketball team. I love seeing the kids play but this facade the NCAA portrays is a farce. At a certain level the teams should be sponsored by the school but be a business because that's what it is.

  11. Read this book:
    http://www.amazon.com/Free-Lunch-Wealthi...
    And just say no to the wealthy ripping off the taxpayer.

  12. I will not vote for or support an arena being built with ANY public dollars, as we ALL know that we pay for and whichever property builds it, will reap all the profit and we will be stuck with another tax..upkeep and maintenance..NO DAMN ARENA!!!!!

  13. Notice that there are NO studies on traffic flow or transportation from either UNR or UNLV Transportation Research groups.

    Notice that there are NO business plans or financial analyses from either UNR or UNLV business schools.

    Forget about academics and what is taught because it has little application in the world of profits. Instead, use Majestic Realty as the expert on transportation and business. That one of the strongest examples of what the Board of Regents thinks about the value their own educational system.

  14. Not with my tax dollars, I want fire, police, and city services. I don't want it spent on reduced tax rates for the rich and robbing of the general fund for "downtown redevelopment", aka the "Goodman Arena"
    Let the citizens vote yes or no