Would-be stadium developers win extension, but council’s caveat looms large

By Conor Shine

Wednesday, Oct. 1, 2014 | 6:45 p.m.

The Las Vegas City Council appeared to throw a lifeline today to the embattled downtown stadium proposal by granting a two-month extension to keep working out financial details. But demands by the council that public funding be stripped from the $200 million project could mean it’s already doomed.

After four hours of debate, the council voted 6-1 today to give the development partnership of Findlay Sports and Entertainment and Baltimore-based Cordish Cos. until December to work out a final development agreement for the stadium. Councilman Stavros Anthony was the lone vote in opposition.

The approval came with the caveat that the developers reduce or outright eliminate the roughly $80 million in public funding included in the current financing plans.

Here’s why that could be problematic:

Most stadiums use public funding

Most professional sports stadiums around the country are built using at least some taxpayer dollars. A study by Forbes showed the public paid an average of 46 percent of the total costs of 11 soccer stadiums built from 1999 to 2003. Under the current terms, Las Vegas would cover 41 percent of the stadium’s $200 million construction cost.

After Wednesday’s meeting, a Cordish representative was unsure if the stadium can be completed without public dollars.

“The numbers speak for themselves. Public investment is required in these deals. That’s just a fact,” said Zed Smith, Cordish’s chief operating officer.

Smith said the stadium’s narrow margins — one favorable projection showed a $2.4 million net annual profit — means the project won’t work without some public funding.

Recent negotiations have cut the public’s share of the stadium’s risk by shifting debt to the private developers. But the total amount the city would be asked to invest hasn’t changed and it’s unclear how much lower that figure can drop before developers walk away from the project as financially unfeasible.

Council members remain adamant

Although the six council members voted in favor of Wednesday’s extension, a majority still oppose the project unless the financing terms are changed.

Lois Tarkanian, who was positioned as the swing vote on a divided board headed into today’s meeting, said she would vote against any proposal that included public financing because of constituent opposition. She joins Councilmen Anthony, Bob Beers and Bob Coffin who had previously expressed their opposition.

“I don’t think it’s impossible,” Tarkanian said of the demand that public financing be stripped from the project. “If it can’t be done, then it can’t be done.”

$250 million for other developments, but not the stadium

One new revelation from Wednesday’s meeting was a pledge from Cordish to invest $250 million to develop Symphony Park parcels around the stadium should it be built. The investment could include retail, offices and residential, Smith said.

Several council members questioned why some of that $250 million Cordish earmarked for nearby developments couldn’t be shifted to cover the public’s share of the stadium’s costs. But Smith said such a change is unlikely.

“We look at these out parcels. That’s the real opportunity for us. We expect a real return on those dollars,” he said. “To take $50 million from that with the slim margins we’re currently operating under just doesn’t make sense.”