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Downtown Las Vegas businesses aren’t buying arena funding proposal


Some of downtown Las Vegas’ most influential players are lining up against a surprise proposal for a publicly subsidized sports arena, at least the way the deal is currently structured.

On Tuesday, city officials released potential terms for a $390 million arena that would include about $239 million in public subsidies, including $52 million in special improvement district assessments paid by downtown casinos and businesses.

The funding arrangement was included in a term sheet attached to a proposed four-month extension of a deal between the city and Baltimore-based Cordish, a developer that has had exclusive negotiating rights for the project since 2010.

The City Council is scheduled to vote on the extension Wednesday. If approved, Cordish would be obligated to do more project feasibility studies.

Most of the reaction to the proposal has been skeptical even though the pending vote wouldn’t commit the city to any subsidies just yet.

“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,” said Andrew Donner, a downtown developer.

Donner, who is the real estate partner for the Downtown Project, a $350 million real estate, small business and technology investment effort backed by Zappos CEO Tony Hsieh, said the arena should be privately funded.

“We are a private developer spending our own money,” Donner said. “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, which represents about 75 downtown businesses, said there has been little to no communication with businesses on the arena proposal or funding ideas.

“There is really no window of time for the business community to learn anything at all about this proposal,” she said.

Murphy said businesses have already been discussing the possibility of a special improvement district, but the group was thinking there could be other uses for the money besides an arena.

“During that time nobody ever came and said, ‘Let’s use it to pay for an arena,’ ” she said.

Derek Stevens, owner of The D and Golden Gate casinos, said there’s not enough information available for him to determine support or opposition.

“The devil is going to be in the details on this one,” Stevens said. But he added that if Fremont Street casinos would be asked to pick up the tab for any funding shortfalls, “there is no chance if that is the case.”

Councilman Bob Coffin, whose ward includes part of downtown, said he hasn’t seen anything so far that would prompt him to support the proposal as currently structured.

“I can’t support it unless it is very favorable and I don’t think the numbers are working for us,” Coffin said.

Councilman Ricki Barlow, whose ward includes the area near Grand Central Parkway and Bonneville Avenue where Cordish wants to build, said he supports’ the project, including 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, who added the city has been in communication with hockey, basketball and soccer franchises.

Barlow said he is optimistic the proposal can be crafted in a way that gets support from downtown businesses.

“That is what the extension is about so we can basically come to some level of agreement,” he said.

Mayor Carolyn Goodman, a longtime arena proponent, said Wednesday through a spokesman that she hadn’t yet seen the proposal and wouldn’t comment.

The Cordish proposal is one of several arena or stadium projects in various stages of development in Southern Nevada.

The University of Nevada, Las Vegas is considering an on-campus stadium for the football team and other events. MGM Resorts International and AEG are working on a $350 million, privately funded arena on the Strip.

A spokesman for MGM said the company opposes public subsidies for arena projects, including the downtown Las Vegas proposal.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com. Follow him on Twitter at @BenSpillman702.

 

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