Just build it already: Why Las Vegas can’t land a pro sports team

The clock is ticking. Las Vegas is either going to build a sports arena—and attract professional sports here—or it’s not

Andrea Levy

Olympia Group arena proposal

LOCATION: Las Vegas Boulevard South and Cactus Avenue

CORPORATE SPONSOR: Olympia Group, Las Vegas

PUBLIC FACE: Olympia Group CEO Garry Goett

PRICE TAG: $600 million

PUBLIC MONEY: Sales and use tax

THE PROPOSAL: The 20,000-seat arena is proposed as home to NBA basketball and NHL hockey. The 240-acre site owned by Olympia Group, offers plenty of room and is a potential draw to the far south end of Las Vegas Boulevard.

HURDLES: Project appears to have lost traction amid the flurry of arena proposals. The site is several miles from the Strip and downtown properties.

UNLV NOW

LOCATION: West of Thomas & Mack Center, on 150 acres next to campus

CORPORATE SPONSOR: Majestic Realty Co., Industry, Calif.

PUBLIC FACE: Majestic Chairman and CEO Ed Roski

PRICE TAG: Unknown

PUBLIC MONEY: UNLV land, special tax district

THE PROPOSAL: The 40,000-seat domed stadium would be home to UNLV football and UNLV basketball with the potential to host major league sports. It would bring football to the UNLV campus and be part of a larger project that includes retail and residential. The developers are responsible for Los Angeles’ Staples Center and are part of owners of the L.A. Lakers and L.A. Kings.

HURDLES: Potential airspace issues involving the Federal Aviation Administration. The project could eliminate the McCarran International Airport traffic egress on Swenson Street.

Las Vegas Arena Foundation/Caesars Entertainment arena

LOCATION: East of Imperial Palace, on 13 acres owned by Caesars Entertainment Corp.

CORPORATE SPONSOR: Las Vegas Arena Foundation, Las Vegas—a nonprofit corporation formed specifically to develop an arena on land donated by Caesars Entertainment.

PUBLIC FACE: Foundation President Bruce Woodbury, a former longtime county commissioner

PRICE TAG: $500 million

PUBLIC MONEY: 0.9 percent sales and use tax for the resort corridor

THE PROPOSAL: Would bring a 20,000-seat venue for NBA basketball and NHL hockey to the heart of the Strip. Backers say it would host concerts and other events.

HURDLES: Initiative vote wouldn’t occur until November 2012; gaming giant MGM Resorts International is leading a legal challenge against the plan.

Downtown arena proposal

LOCATION: Las Vegas Boulevard and Stewart Avenue, on part of 20 acres identified for an entertainment district.

CORPORATE SPONSOR: Cordish Co., Baltimore

PUBLIC FACE: Las Vegas City Hall, but Mayor Oscar Goodman has said he would support any group that could get an arena built.

PRICE TAG: $500 million

PUBLIC MONEY: City land, special tax district

THE PROPOSAL: An 18,000-seat venue that would be home to NBA basketball and NHL hockey. The arena would be part of a downtown entertainment district. The design team built Ballpark Village at St. Louis’ new Busch Stadium.

HURDLES: No major league tenant has been identified.

Las Vegas National Sports Center

LOCATION: Downtown Las Vegas, on 70 acres northeast of World Market Center in the vicinity of Symphony Park

CORPORATE SPONSOR: International Development Management LLC, Austin, Texas

PUBLIC FACE: Chris Milam, president

PRICE TAG: $1.57 billion

PUBLIC MONEY: City land, improvement district

The PROPOSAL: A three-venue complex:

• Silver State Arena, capacity 17,500, a proposed home of NBA basketball, NHL hockey, UNLV basketball

• Silver State Ballpark, capacity 9,000 (expandable to 36,000), a proposed home for AAA baseball (Las Vegas 51s) and UNLV baseball. It could expand to house Major League Baseball.

• Silver State Stadium, capacity 50,000 (expandable to 75,000), a proposed home for UNLV football, Las Vegas Bowl, major league soccer, UNLV soccer. Could expand to house a National Football League team.

HURDLES: Rival developer Cordish has rights to the site, but the companies have had exploratory talks. The developers have no major league tenants on the horizon.

We’re at the home of the Wrangler National Finals Rodeo!” Boyd Polhamus’ booming voice asserts. “Let it be here for forever! VIVA LAS VEGAS!”

Boy, do I agree with Boyd, one of rodeo’s most popular announcers.

The capacity crowd at the Thomas & Mack Center, filled to its 18,000 capacity, goes wild.

This is where it happens. Las Vegas. Rodeos, NASCAR races, rugby tournaments, awards shows, NBA exhibition games, Celtic festivals. We own New Year’s Eve, too. All of it. Bring it on. The NFR consumes the city for nearly two weeks, with rodeo events and parties flowing out of the Thomas & Mack into such diverse venues as showrooms at Gold Coast and South Point, the ballroom at Golden Nugget and even the sports book at Mirage. Fremont Street Experience and the Pub at Monte Carlo are happy to buck out some stock (metaphorically speaking) to rejoice in an event that is truly citywide.

Let it be here for forever, indeed. In Las Vegas, if we want it, we take it. If someone else wants it, we keep it. The NFR is a chief example. The event has been hosted in Las Vegas since it was wrested from Oklahoma City in 1984, lured by the strong personalities (and even stronger checking accounts) of gambling icon Benny Binion and then-Las Vegas Events President Herb McDonald. Late November in Vegas used to be the Cannonball Period (as in, what you could fire down the Strip and not hit anybody). Now it’s our favorite annual festival—even if it means donning a Resistol for 10 straight days.

But what does it say about Las Vegas, still appealing enough to lure nearly 40 million tourists to the region in the teeth of the worst recession in more than half a century, that it can’t improve its hand and build an arena? Not just to hold the NFR and many of the city’s great events in place, but to finally convince a professional sports team to call Vegas home and give our city a genuine major league identity.

Not much, frankly. Over the past two years, Las Vegas has welcomed a pair of multibillion-dollar resort projects to the Strip—the awesome CityCenter and the uniquely chic Cosmopolitan. Combined, the two are worth maybe 20 new arenas. Enough revenue has been invested in the Strip in the past two years to have built a dozen Cowboys Stadiums.

But no arena has been built. It’s certainly not for a dearth of ideas. Over the past 15 years, a dozen arena and/or stadium plans have been proposed to Las Vegas’ tourism and elected officials. But instead of construction, we’ve seen contention. Even civilly, our city’s leaders—elected and otherwise—cannot agree on where to put this splashy new place, how to pay for it and how to ensure everyone is happy and (of course) compensated.

The arenas Las Vegas uses to feature its concerts and sporting events are aged: MGM Grand Garden Arena (built in 1993), Thomas & Mack (age 28) and Mandalay Bay (finished in 1999).

The city is beginning to feel pressure from other municipalities eager to pick over its treasured events. Cowboys Stadium in Arlington, a Dallas suburb, is, by its very existence, a threat because it can host the types of concerts, awards shows and sporting events that bring millions in revenue to Las Vegas. That includes big fights, which have long been a Vegas hallmark.

Cowboys Stadium has held two boxing matches featuring Manny Pacquiao, the sport’s smallest cash cow whose bouts are huge business for MGM Grand and the casinos that broadcast his fights on big screens. MGM Grand Garden seats 16,000 and sells out for Pacquiao; Cowboys Stadium drew more than 51,000 for its first fight, a Pacquiao-Joshua Clottey bout, in March 2010. His most recent bout, against Antonio Margarito in November, drew nearly 42,000.

The lure of Cowboys Stadium and its enormous video screen is powerful. Predictably, this has caused some jitters among Las Vegas tourism officials. The NFR could, conceivably, move to Dallas if it gets a better deal from Cowboys Stadium. That might be unlikely—Cowboys owner Jerry Jones says he’s more interested in Cowboys in helmets than cowboys in hats—but Las Vegas faces formidable competition for boxing matches, and losing the Academy of Country Music Awards show to Big D is also a real possibility.

To pull the show from MGM Grand Garden Arena in 2013, Texas plans to tap into its Major Events Trust Fund, fed by a sales tax on tourism-targeted industries, to reimburse cities for a portion of the cost of staging such events. In fact, its stated goal is to draw events to Texas that are usually held in other states.

Call it poaching and that’s just jim-dandy in the Lone Star State. The fund has reaped huge profits. Arlington received several million dollars in reimbursement from the state after hosting this year’s Super Bowl at Cowboys Stadium, which infused more than $600 million to the region, a Super Bowl record. The investment from the state, given to Arlington, was a little more than $30 million.

Jones envisions a Pacquiao fight (if that fight were to involve Floyd Mayweather Jr.) attracting 110,000 to the facility occasionally called Death Star. The 2010 NBA All-Star Game drew about that attendance, record attendance for a basketball game at any level.

The fray ceased, for a time. Late last year, the haggling and hammering among the state’s two most influential casino companies gave way to some Old Vegas diplomacy.

That’s when Bruce called Alan.

Bruce wanted a meeting. Alan considers Bruce a true gentleman, so he invited him to his office for a face-to-face confab.

“I’ll always take a meeting with Bruce,” Alan says.

Bruce is Bruce Woodbury, former chairman of the Clark County Commission. Woodbury is president of the Las Vegas Arena Foundation, a nonprofit corporation assembled to develop an arena on land on the east side of the Strip donated by Caesars Entertainment. He’s also the Bruce Woodbury of the Bruce Woodbury Beltway, the Bruce Woodbury who sits on the board of the Las Vegas Monorail. That guy.

Alan, he’s Alan Feldman, MGM Resorts International’s senior vice president of public affairs. Similar to Bruce, he’s highly respected in the community for being a stand-up guy, an articulate spokesman and a generally trustworthy individual.

The two met, with Alan also inviting a couple of MGM Resorts executives to the meeting: Government affairs officials Sara Rayme and Denice Miller.

They listened as Bruce, in a most gentlemanly manner, laid out a proposal that even he couldn’t sell.

The idea was to invite MGM Resorts to host events at a proposed 18,000-seat arena, which would be built on 13 acres just east of Imperial Palace. The arena would stand in the epicenter of Caesars Central in the middle of the Strip, surrounded by a quintet of properties against which MGM Resorts directly competes.

In the spirit of communal goodwill, Bruce offered a couple of spots on the Las Vegas Arena Foundation board to MGM Resorts officials. But of course, to a company trying to fill its own arenas at MGM Grand and Mandalay Bay, the idea made about as much sense as UNLV playing its home football games at UNR.

“Basically he asked, ‘Join us, join in,’” Alan recalls. “But our point is should we be taking public money and putting it in a private project? Let’s be clear: If Caesars wants to build that arena on their property with their money, come on down and compete. But the notion of building an arena with public money, especially where we stand economically as a state, just borders on (pause as he selects just the right word) unconscionable.”

Bruce calmly, but clearly, disagrees. He’s president of the Las Vegas Arena Foundation, not the Caesars Arena Foundation. He argues that the 0.9-percent sales tax that would be levied on the resort corridor near the project would benefit all resorts, not just those owned by Caesars Entertainment.

“We want to provide a venue for events that we wouldn’t have otherwise,” he says. “Anyone could sponsor an event at this arena, which is within walking distance of a huge number of hotel rooms owned by various properties.”

After about 30 minutes, the two sides agree to disagree. Once more in the Vegas battle of arenas, politics trumps personalities.

No arena has been built in Las Vegas since South Point Arena was finished by Coast Resorts (then a subsidiary of Boyd Gaming before Michael Gaughan took over the hotel) in March 2006. In a city dotted with billion-dollar resorts, how can this be?

The reason can fit on any casino marquee: Politics.

Consider the absence of a single civic voice to speak on behalf of the greater public good when addressing the various arena and stadium proposals. The Las Vegas Convention and Visitors Authority, the region’s powerhouse marketing organization, is sidelined at least in part because of the corporate competition the arena issue presents.

The board of Las Vegas Events, which organizes and promotes such wide-ranging and profitable Vegas events as the National Finals Rodeo and NASCAR Weekend, is filled with resort officials who have skin in the arena game. Aria President and Chief Operating Officer Bill McBeath is joined on the LVE board by Caesars Entertainment Western Division President Tom Jenkin, Gaughan and Palms owner George Maloof.

This is not a uniformed group, to put it mildly.

The differences on the arena issue between McBeath’s and Jenkin’s companies have been outlined. Gaughan’s arena was built entirely with private money. Maloof, whose family’s Sacramento Kings have been battling fruitlessly to build an arena with public funding in the River City, says no arena could be built in Las Vegas without at least some taxpayer assistance. He’s also fast to add that now is not the time, given the state’s financial crisis.

Think that high-power collective could agree on a single position regarding an arena in Vegas? You’d get better odds on the lowly Kings winning the NBA Finals. Even if the group could agree on a public position, What’s clear is that if an arena requires public money, Las Vegas Events will remain neutral.

As for the city’s mayor, Oscar Goodman is chairman of the LVCVA board of directors and sits on the LVE board. Such widespread appeal is one reason Goodman won his third and final term with 86 percent of the vote.

The self-dubbed “happiest mayor in the universe” has, naturally, backed the downtown proposal sponsored by The Cordish Companies of Baltimore, whose sports-entertainment projects include Ballpark Village in St. Louis and Philly Live in Philadelphia, each a retail, restaurant and entertainment complex.

In 2009, Cordish entered into an exclusive agreement with the city to build an 18,000-seat arena at Las Vegas Boulevard and Stewart Avenue, on the 20 acres behind City Hall. Not much has transpired since. The mayor says, rightfully, “Whoever puts a shovel in the ground first, wins,” and has even backed off publicly supporting any project—he’s just rooting for any new venue that would benefit the entire region.

When (and if) that turn of the shovel happens, Goodman will be long termed out, his objective of landing a major league sports team unsatisfied.

And what of this late-arriving International Development Management proposal, in which IDM is working with Cordish to develop a 17,500-seat arena, 50,000-seat stadium and 9,000-seat baseball park at Symphony Park? The renderings are mind-blowing. The project’s viability? Too soon to tell. IDM has fallen short in its efforts to build Silver State Arena on the old Wet ’n Wild site on the Strip across from Circus Circus.

The various factions can agree on one thing: Las Vegas will not be home to any NFL, NBA, MLB or NHL team absent a new arena or stadium. None of the half-dozen venues built with private money on or near the Strip (among them MGM Grand Garden Arena, Mandalay Bay Events Center, Orleans Arena and South Point Arena) is suitable for such a team. Nor is the Thomas & Mack Center, whose weaknesses as an outdated arena were so exposed during the 2007 NBA All-Star Game that NBA Commissioner David Stern said the league wouldn’t return until the arena is renovated—and that’s just for an exhibition game.

As for the open-air options, Sam Boyd Stadium is not a top-rate facility even for college football, and its location off the Boulder Strip, more than seven miles from the UNLV campus, has caused logistic nightmares during highly attended events (such as the night several thousand fans waited hours for cabs to show up at the stadium after a U2 concert in November 2009).

What may be the most intriguing proposal for a multi-events facility today is rooted in our city’s galvanizing public institution: UNLV. Titled “UNLV Now,” it boasts arena credibility both locally and nationally as it’s fronted by Ed Roski and Craig Cavileer.

Know them. Roski is chairman of Majestic Realty Co., a part-owner of the Los Angeles Lakers and L.A. Kings whose company helped build the Staples Center in Los Angeles. He also owns the Silverton resort, whose president is Cavileer, who has been part of Majestic’s operation since 1993 and the hotel’s president since 1998.

Cavileer is all about Vegas. So is his résumé. He’s a member of the UNLV Foundation, the Nevada Ballet Theatre’s board of directors and the Smith Center for the Performing Arts Leadership Committee.

“We have to reinvent the way the university looks at gaining revenue,” Cavileer says of the financially bleeding institution of higher education. “There needs to be a way for UNLV to be more self-sufficient.”

Say this for the Fortress of Self Sufficiency: It’s unlike any project in the country.

The centerpiece of a 150-acre mixed-use community is a proposed variable-capacity domed stadium just west of the Thomas & Mack Center. The size of the venue is not yet known (Cavileer has said it could hold anywhere from 55,000 or 36,000 or 42,000), but plans show it can shrink to about 7,000 seats (the capacity of Orleans Arena), its interior collapsing and expanding like a giant accordion. Its chief occupant would be the UNLV football team, desperate to take on the image of a winner. A new stadium would help coach Bobby Hauck in his efforts to replenish the program’s onfield talent.

In its renderings, the cereal bowl-shaped facility appears to sink into the earth, a novel way to duck beneath possible flight restrictions presented by the airport. The structure would be in the direct path of the airport’s runway alignment.

There will be traffic issues, too, as the egress from McCarran on Swenson Street would be wiped out, but that’s another problem for another time.

The chameleon-like venue could host events including football, soccer, rugby, rodeo, boxing, concerts, even table tennis or beer pong, it seems. Cavileer says if the district is not approved and an arena is built elsewhere in the valley, the potential of lost revenue to the university would be from $7 million to $10 million per year.

If completed as planned, the project would also energize UNLV’s chronically lethargic alumni population in Vegas and elsewhere. As expected, the school’s firebrand president, Neal Smatresk, is excited about the proposal to the degree that he presented the plans to the Board of Regents.

But whenever Cavileer talks of the project, he’s quick to point out that it’s not merely a stadium proposal. With great zeal, he describes a village that will change the image of UNLV from that of a commuter campus to a self-contained community. Three thousand housing units would be available for UNLV students—kids who might well have graduated from Clark County School District high schools and are fired up about living at UNLV—and more than 600,000 square feet of retail space are folded into the project.

Cavileer estimates up to 10,000 students would live on-campus in this RebelVille, and there would be a burgeoning Greek society on campus.

“These will be pretty contemporary apartments, more like condominiums, actually,” says Cavileer, who envisions nearly 200 events a year combined at a renovated Thomas & Mack Center, Cox Pavilion and the new multiuse stadium. “We want to engage students, get them to be excited about UNLV, which is a product they can get into. You’ll have all the camaraderie in the stands, all the spirit, and they’ll say, ‘I get to live on campus.’”

It’s all in the spirit of developing a university community, which is the idea that helped sway the state Board of Regents when it awarded Roski and Cavileer an exclusive 150-day negotiating window with the university to finalize a deal that would make the project a reality.

That window drops in June. Expect the process to take a lot longer than 150 days, and for the Board of Regents to decide whether to extend that period so the two sides can have a fair shot at a formal agreement. UNLV Now is another proposal strong on renderings, but short on specifics.

No cost has been specified. No detailed financial model has been revealed. No timeline is set. Air-traffic and road-traffic concerns linger. It’s not even certain that the big stadium will be domed. There’s no evident rush to arrive at those nuggets of minutiae, either. But, importantly, the project would create an estimated 2,000 jobs, and an educated estimation is it would cost around a half a billion dollars.

“It takes a long time to plan these projects,” Cavileer says. “Every time we have a meeting, there’s a new idea.”

When would the project begin construction, ideally? Between 12 and 24 months, Cavileer says.

In one way, the proposal is actually benefiting from its early and expected lack of clarity. Without a specified means of financing, there can be no criticism of how to raise money to fund the project. Without a doubt, Roski and his company will be paid and will receive the land as a donation from the university, but how will the university make out financially? It would likely need to lease the spaces for all those retailers, and also partner in name rights for the big building.

The project would likely meet resistance from MGM Resorts, for one, if it attempts to forge a sales tax on the region surrounding the UNLV campus, which would be a repeat of the sales tax the Caesars Entertainment group is pushing to help fund the arena behind Imperial Palace.

“It’s too early to get a full final position,” Feldman says. “It leaves as many unanswered questions as answered. We would totally support something that enhances the urban character of UNLV, to improve the football program and bring other events that would benefit the community. That’s a good thing. But what needs to be asked, among engineers and operators is, can it be built? Is it actually physically possible?”

A genuine concern, that. Some observers in Las Vegas who have studied the arena issue for years swear the project isn’t at all feasible.

Cavileer does offer, “Nothing like this exists anywhere in the world.” The project’s designer, Populous, seems up to the task. A company with interests in the U.S. and overseas, Populous has developed all variety of sports and entertainment venues around the world, including Gillette Stadium (New England Patriots), Heinz Field (Pittsburgh Steelers) and Reliant Stadium (Houston Texans).

Though he says it’s too early to anticipate the wish of a professional basketball or hockey team actually playing in the proposed UNLV Now structure, Roski is convinced the flexible facility will benefit the entire region, beginning with Las Vegas Boulevard.

“If you get a fight in here that brings 40,000 people, that helps everybody on the Strip,” he says.

Take Manny Pacquiao in that fight, even though he’d be near the end of his boxing career when he steps into any kind of boxing ring on the UNLV campus.

Meanwhile, Las Vegas’ biggest indoor facility, the Thomas & Mack Center, will not host another NBA All-Star Game until it’s given a good scrubbing (renovation of the Thomas & Mack is a component of the UNLV Now proposal, actually). There seems no appetite for public funding for any arena proposal, given the state’s budget shortfalls. Rather than attempt to push a sales tax initiative through this year’s state legislative session, the Caesars group is instead putting it on the ballot for 2012—hoping an economic recovery has actually taken hold by then and voters are feeling more adventurous about investment.

“I think there’s a good chance to get people out to vote for it,” Woodbury says, optimistically. “We have an awful lot of people who signed petitions. We’ll have to see how everything looks next year.”

For those who wonder why taxpayers would be asked to help finance an arena on property owned by a resort company accustomed to building billion-dollar resorts, there’s an explanation. Public funding is deemed necessary for big arena projects to cover loans that companies take out to finance their investment in the project. That figure factors into the equation the same way a homeowner’s interest rate affects his or her monthly mortgage payment.

Without public money, arena owners have a difficult time covering both operational expenses and loan payments, which are commonly known as debt service fees. For example: If an owner finances a $400 million arena at a 10 percent annual debt service rate, that’s a $40 million per year debt payment any private entity would be challenged to meet. It’d be like asking the Venetian to build the Phantom Theater every year. An annual infusion of public money helps keep the facility operators in the black.

“We’re never going to get the first-class arena we need, that there should be, if there isn’t any public money involved,” Woodbury says. “We want to reach out and make our project neutral. We’re like Switzerland.”

Perhaps Switzerland, steeled by Woodbury’s congeniality, can actually win this war. But there’s a lingering question that’s almost too scary to pose: What if Las Vegas can’t make a new arena happen?

Seems a preposterous notion. What if the city that has always been able, is unable? The city that can, can’t?

We’ll have fallen short. You can’t build a marketing campaign around, “Dang, We Tried.” Not in Las Vegas.

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