Published Thursday, Oct. 31, 2013 | 5:08 p.m.
Updated Thursday, Oct. 31, 2013 | 6:45 p.m.
The UNLV Campus Improvement Authority Board will begin seeking applications next month for an experienced consulting company who will help study how state, university and business leaders can build an on-campus stadium that they hope will bring hundreds of millions of dollars to the Las Vegas economy.
The 11-member stadium authority has been charged by the Legislature with studying and recommending a cost, scope and financing plan for a UNLV football stadium that will host several major events each year. The consulting company, which is expected to be hired by mid-December, will serve the role of a project manager and help the stadium board deliver a comprehensive report to state lawmakers by Sept. 30.
At their second meeting Thursday, the stadium authority’s board of directors reviewed existing studies, and began a discussion on what next steps need to be taken to create a stadium project that has the backing of both the university and the resort industry. A previous two-year effort to build a campus stadium, dubbed UNLV Now, fell apart earlier this year after the resort industry publicly questioned size and cost of the stadium.
“We need to have good, thorough conversations about what makes good sense for the university and the resort industry as a whole,” stadium authority board chairman Don Snyder said. “This is an incredibly important process.”
Authority board members, comprising university officials and resort industry representatives, listened to several presentations by economists and stadium experts on the need for a stadium in Southern Nevada. Las Vegas is one of three major metropolitan areas that does not have a major modern, covered stadium. (The other two cities are Los Angeles and Orlando, Fla.)
There are two main reasons why Las Vegas doesn’t have a stadium, according to Robert Lang, the executive director for the Lincy Institute and the UNLV director of Brookings Mountain West.
Las Vegas doesn’t have a professional sports team that could drive the construction of a new stadium. However, the city also doesn’t have the ability to keep a share of local tax revenues generated, because Nevada takes most local tax money and redistributes it across the state.
Lang doesn’t see the lack of a professional sports franchise as a particular hindrance toward building a UNLV stadium; however, Nevada’s tax system is. If state, university and business leaders can come up with a good financing plan, a UNLV stadium project has the potential to turn Las Vegas’ economy around.
Lang pointed to Las Vegas’ chief economic competitor, Orlando, which shares a similar entertainment and tourism industry as Las Vegas — except it’s primarily for children. The central Florida city is making a significant investment — in excess of $100 million — in a new sports and entertainment district that features a new Major League Soccer stadium and partnerships with Disney.
“We’re alone with Orlando where the principal economic driver is tourism,” Lang said. “That’s why the assets we build in tourism are so critical … The case for the stadium is that it’s a key asset that will anchor Las Vegas’ core economy.”
How much of an economic impact will a UNLV stadium hosting 15 additional events each year have on the region’s battered economy?
About $393 million in additional tax revenue and direct revenue from lodging, food, retail, gaming, transit and sightseeing. And that’s a conservative estimate, according to Mark Rosentraub, a University of Michigan sports management professor who conducted an economic impact study for the UNLV Now stadium project.
“Moving football to the campus at a state-of-the-art facility will, in the long run, benefit the region’s economy and university.”
Nevada System of Higher Education Regent Michael Wixom noted, however, that economic impact studies assumed that financial models, and the projections behind them, are accurate and work for Las Vegas. The local attorney argued the board will need to test several stadium financing models to ensure that taxpayers aren’t left on the hook for a half-finished or largely empty stadium.
“By and large, stadia have been successful for private entities, but not so successful for the public,” Wixom said. “How will this formula be different? What makes (this stadium project) different?”
That’s where the experienced consulting company comes in. The firm will help guide the stadium authority through different financing models and feasibility studies to determine what size, cost and features the UNLV stadium should have.
In particular, the firm would look at the stadium’s revenue model, such as naming rights and what events may realistically relocate to Las Vegas because of a new UNLV stadium. Looking at the revenue, the company would figure out how many seats and amenities the UNLV stadium should offer. The failed UNLV Now project, which would have featured the world’s largest video screen at 100-feet long, was estimated to cost about $900 million.
“If you’re going to spend money to build a facility like this, the numbers and assessments behind them need to be validated by more than one person,” said Gerri Bomotti, UNLV’s senior vice president of finance. “We need a fresh take on the stadium’s economic impact.”
Besides looking at the economics and feasibility of a UNLV stadium, the consulting firm would also vet stadium authority board members’ concerns about the project, such as the “crowding out” effect.
Salt Lake City’s tourism sector actually lost money during the 2002 Winter Olympics, because many tourists want to avoid the crowds and other issues that come with major events. Rosentraub said. That “crowding out” effect could take place in Las Vegas if the UNLV stadium attracts several mega-events that could crowd out existing events.
Rosentraub advised that stadium officials would need to coordinate with the Las Vegas Convention and Visitors Authority and Las Vegas Events to manage any new events in Las Vegas.
All this talk about events and their economic benefit to the region had stadium authority board member Kim Sinatra wondering whether a UNLV stadium would have any benefits for the university.
“My perception of this project was it would be the centerstone of what UNLV could be in the future,” the Wynn Resorts executive said, addressing UNLV President Neal Smatresk. “Are you happy with this big commercial enterprise in the middle of your campus?”
Smatresk replied that an on-campus football stadium would help UNLV become more of a traditional, residential college. A new stadium, located near the corner of Swenson Street and Harmon Avenue, would attract more students, create more on-campus buzz and help host more alumni events that could boost university donations. The stadium’s proximity to the Las Vegas Strip would benefit the resort industry.
Although there are concerns about traffic issues and safety on campus, the UNLV stadium will host 15 events other than football games and a smattering of smaller events. The university can handle that, Smatresk said.
“Bluntly, the campus can’t put this kind of money into a stadium. We need support,” Smatresk said. “We help the region with what we think makes sense for the entire region. The region helps us provide our campus with a terrific venue. It works for us and everyone involved.”