Stadium’s supporters think big for Henderson site

Backers of a plan to put a major sports stadium in Henderson offer visions of a cutting-edge facility that brings jobs, cash and excitement to the Las Vegas Valley.

The plan calls for buying public land and using revenue from bonds backed by taxes and surcharges generated by the stadium and private investment to build a nearly $2 billion project capable of hosting major league soccer, basketball, hockey, baseball and football franchises.

City officials like the sound of the developer's promises that the project would generate as many as 10,000 temporary and permanent jobs without putting taxpayers on the hook if revenue doesn't cover expenses.

But author and stadium deal expert Neil deMause, author of the book "Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit," sees a proposal similar to stadium projects around the country that generate money for professional sports franchises and stadium developers but don't turn a profit for local governments that support them.

"It looks like a typical stadium deal, which is to say pretty awful," deMause said after reviewing a draft agreement between aspiring stadium developer Chris Milam and the city of Henderson.

Neither Milam nor a spokeswoman who has represented him at public meetings returned calls or emails seeking comment on the proposal .

The Henderson City Council voted 5-0 earlier this month to request that the Bureau of Land Management sell about 485 acres near Interstate 15 to Milam's company, which would build multiple facilities that could house major league basket­ball, hockey, soccer, football and baseball games. Milam would then hand the finished project over to the city to own and operate, save for parking, which Milam would control.

The council also approved a Master Project Agreement with Milam's firm that lays out preliminary financing and legal obligations for both sides.

"For something of that magnitude there has got to be some assistance there," city spokesman Bud Cranor said about why the city has agreed to partner with Milam on a project.

However, Cranor and other Henderson officials insist taxpayers won't be on the hook for the project, even if it doesn't make money.

Mayor Andy Hafen says the risk will rest with bondholders who purchase the bonds backed by revenue generated by the project.

"The best way I can explain that is kind of like the monorail," Hafen said, referring to the financially troubled elevated rail system on the Strip. "We taxpayers are not on the hook for those bonds. It is the bondholders who lose out."

The deal attempts to recycle provisions that were part of a proposal the Legislature rejected in June when Milam wanted to build a grouping of sports facilities at Russell Road and Interstate 15 near the Strip.

Some of those include government-issued revenue bonds, special tax districts to divert money toward bond payments and a 12 percent to 16 percent tax on food, beverages and souvenirs sold in the stadium.

Milam also would raise private money for the project, but the plans so far don't lay out a breakdown of how much of the funding would be private and how much would be through bonds backed by taxes.

"It is a classic 'have your cake and eat it too' plan," deMause said. "Normally the point of having taxes is a development has expenses that come with it. You have got to have police and fire and roads and sewers. Here, instead of paying for that, (Milam) wants to keep the taxes."

The financing propositions are included in a 17-page Master Project Agreement between the city and Las Vegas National Sports Center LLC.

In addition to arrangements that would divert property and sales taxes into stadium financing, the proposal calls on the city to request that the BLM offer Milam the land through a direct sale, meaning no other bidders would have a shot at the property.

There is no guarantee BLM officials would even approve such a plan, let alone on the aggressive timeline Milam proposes.

"That may be requested, but that doesn't necessarily mean that is what is going to happen," BLM spokeswoman Hillerie Patton said of the process. "Would it be prudent for us to sell the land directly? That is the overarching guideline."

A timeline presented to the city with the project agreement shows Milam closing the BLM land deal in April 2012. But Patton said such sales take about 12 to 18 months to complete. That means even if BLM officials approved a sale Milam wouldn't take control until sometime between late September 2012 and March 2013.

Henderson is the fourth location in the Las Vegas Valley that Milam has proposed for a major sports venue, each one seeking some sort of government-backed funding.

Other locations where he has tried and failed to complete a project include downtown Las Vegas, a site on the Strip near Sahara Avenue and the site west of I-15 near Russell Road.

"We get it. He wants someone to build him a sports center so he can benefit from whatever is going on in that sports center," said Alan Feldman, a spokesman for MGM Resorts International, which owns 10 resorts on the Strip and has criticized proposals seeking public money for sports arenas. "I don't know exactly when this proposal becomes a joke."

Feldman said the only current stadium proposal in the area that might be worthy of public support is a proposed football stadium on the University of Nevada, Las Vegas campus.

"Our company would wholeheartedly support a football stadium on the UNLV campus so long as the university system isn't put at undue risk," he said.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-229-6435.