Race is on to build Las Vegas’ next big crowd pleaser
Race is on to build Las Vegas’ next big crowd pleaser
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
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)
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
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
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.
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.
Sunday, July 15, 2012 | 2 a.m.
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
Audio Clip
- Mayor Goodman talks about the chance that more tourists than locals will use stadium
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)
Audio Clip
- Bruce Woodbury talks about why the Strip needs a new arena
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
Audio Clip
- UNLV President Neal Smatresk talks about the importance of sports for the university
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
Developer Chris Milam talks about recruiting a NBA team
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.
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.
