Council nixes business tax to fund stadium
Last week Las Vegas City Council voted 4-3 to give the Cordish Companies of Baltimore four more months to complete its funding plan for a proposed $390 million arena in Downtown Sin City. Officials also nixed a proposed business tax that would have raised more than $50 million for the new sports arena.
In what the Las Vegas Review-Journal described as a “bloody victory for the pro-arena faction,” the vote also revealed a deep schism between lawmakers and the Downtown business community, which has shown scant support for the project at Symphony Park.
Developer Andrew Donner is among the business leaders who object to a publicly subsidized sports arena. “We are an absolute advocate of an arena, but we are absolutely against this whole special improvement district and the businesses downtown paying for it,” Donner said at a city council meeting prior to the vote. Donner is part of the Downtown Project, a $350 million real estate, small business and technology investment effort supported by Zappos CEO Tony Hsieh.
“We are a private developer spending our own money,” Donner argued. “We haven’t asked anyone else to help us. We haven’t asked the city to back any bonds for us.”
Terry Murphy, president of the Downtown Las Vegas Alliance, griped that the business community has been kept in the dark about the Cordish plan. “There is really no window of time for the business community to learn anything at all about this proposal,” Murphy said. “Nobody ever came and said, ‘Let’s use (a special improvement district) to pay for an arena.’”
Cordish has had exclusive negotiating rights for the project since 2010.
According to the amended plan, Cordish would contribute $151 million in equity, the city would issue $187 million in bonds to be paid off by arena revenues, and the $52 million budget gap would be plugged with additional private equity.
Councilman Ricki Barlow said he supports the project and the public subsidies. “I think it is a win-win for the entire state when we are talking about the opportunity of an arena that could ultimately support some form of professional teams,” said Barlow. “That is what the extension is about so we can basically come to some level of agreement.”
If it’s built, the new arena won’t be without competition. The University of Nevada Las Vegas is also considering an on-campus stadium for its football team and other events, and just signed up CSL International, a consulting firm from Dallas, to help it firm up its plans. And MGM Resorts International and AEG are working on a $350 million privately funded arena on the Las Vegas Strip.
MGM also opposes public subsidies for arena projects, and dissent continues to echo around City Hall.
“I can’t help but feeling like a betrayed spouse or partner, not just once but several times,” said Richard Worthington, COO of the Molasky Group development company and a Downtown Las Vegas Alliance director. “The time for this project has come and gone.”
Lobbyist Russell Rowe of Boyd Gaming, which owns the Fremont, California and Main Street Station casinos, said the company is “frankly shocked at how this has come about. If Cordish wants to come here and build an arena downtown we welcome them. But don’t ask the public and the people in this community to fund it when we are trying to figure out how to fund more cops.”
Mayor Carolyn Goodman shot back, saying, “We have been gamblers forever. How can we just put our tail between our legs and not go forward?”
