The private developer team pitching a publicly subsidized soccer stadium for Symphony Park is talking with Las Vegas City Council members behind the scenes about a revised funding plan to reduce the city’s financial risk for the $200 million sports venue.
Two City Council members confirmed that The Cordish Cos./Findlay Sports & Entertainment — the city’s soccer stadium partners — has proposed cutting the amount the city is being asked to borrow for the stadium that Cordish/Findlay say is needed to attract a Major League Soccer expansion franchise. The city is competing against Sacramento, Calif., and Minneapolis for the last MLS expansion slot.
Under the current proposed deal, the city would borrow nearly $115 million through bonds, with Cordish/Findlay paying the city $3.5 million in annual rent and either $500,000 or $1.5 million in nonsoccer revenue annually to help Las Vegas pay its annual bond debt of up to $8 million annually over 30 years. The city would also contribute $3 million annually from hotel room tax revenues.
Several City Council members and residents complained the city would be harmed financially if the developers didn’t pay rent or make payments.
But now there are new options being discussed privately to alleviate the city’s risk.
Council Members Ricki Barlow and Bob Beers said under the new revised deal, Cordish/Findlay has privately suggested the city borrow $45 million to $50 million based only on its annual $3 million contribution — instead of the $115 million — while the developer team would pay the balance in its own new $65 million-$70 million loan.
Under this new revised option, Cordish/Findlay would not pay rent or any payments to the city.
“It’s their first attempt at sweetening the deal,” said Beers, a fierce stadium deal opponent who expresses his opposition on his blog.
Barlow, a stadium supporter, put it this way: “I wouldn’t say it’s sweetening. It’s negotiations … We’re still looking at the numbers.”
Barlow said he refers to Cordish/Findlay’s new suggestions as “Option B.”
Acknowledging the revised funding plan, Cordish Chief Operating Officer Zed Smith told the Las Vegas Review-Journal Wednesday morning, in part: “A major step forward in this regard is our commitment to a new financing structure that significantly lessens the City’s public funding of the stadium while retaining a viable business model.
“It should be noted that the revised financing structure calls for materially less public investment than comparable MLS deals across the country and does not increase taxes for the citizens of Las Vegas.”
Later on Wednesday at a public stadium information meeting at City Hall, Smith also confirmed the revised funding model.
Another option is Cordish/Findlay would like the city to issue revenue bonds instead of general obligation bonds for its share of the proposed stadium financing. If the City Council approves a nonbinding stadium deal at its Oct. 1 meeting, then the proposal would go before the Council for a final agreement vote in December.
At that final December vote, if the deal includes general obligation bonds, the City Council would be required to vote 5-2 in a supermajority to ratify. But if the deal includes revenue bonds, then only a 4-3 majority is needed for Council approval.
The current proposed stadium deal includes language to allow Cordish/Findlay to “consider issuing private debt subject to mutual agreement. If this option is used, then the stadium would be owned privately.”
That would differ from the current proposed deal, which says the city would own the stadium and Cordish/Findlay would be responsible for operating the venue.
These options are being discussed behind closed doors while the city stages public stadium information meetings for city residents to offer comments on the current deal. Cordish/Findlay is negotiating a revised stadium deal because the city’s seven-member governing board is split.
The city’s annual $3 million contribution for the possible stadium comes from hotel room taxes, which generated $6.5 million for Las Vegas for fiscal 2015. The city currently uses that money for parks and recreation capital projects and improvements.
Cordish has attempted to build a sports venue and attract a major league team for nearly five years in downtown under an exclusive agreement with the city, while Findlay partnered with Cordish only this year in hopes of luring an MLS team.
Council Members Stavros Anthony, Bob Coffin and Beers oppose the tentative stadium funding deal, while Mayor Carolyn Goodman, and council members Steve Ross and Barlow support the deal. After saying she wanted to hear more from residents, Councilwoman Lois Tarkanian said last week she would vote no.
That’s why Cordish Vice President Blake Cordish and COO Smith have joined Justin Findlay of Findlay Sports to bounce options off City Council members. For example, Cordish, Smith and Findlay met Beers and Coffin at 7 a.m. Tuesday at Angel Park.
“We, in partnership with the city, have a very brief window to demonstrate to the league that we can deliver a viable financing plan for a world class stadium. It would be unfortunate for the city to take itself out of the running of this national competition at this critical stage,” Smith said.
During a stadium information session in Anthony’s ward on Tuesday evening, Smith talked in general terms about the effort to reduce the city’s risk.
“We’re looking at shifting that risk from the city and moving it to ourselves,” Smith told a small audience of about 20 residents.
Residents are also split about the soccer stadium project. Some say it would be an economic boost and is needed to lure a big-league team to Las Vegas, while others say the private developer team should pay for the facility without a city subsidy.
Other components of the financing deal include $44.25 million from Cordish/Findlay, $14 million from the city in infrastructure costs and $22 million in star bonds from revenues generated by a tourism improvement district.
City Manager Betsy Fretwell said negotiations are fluid and it’s inappropriate to discuss deal options until after all six city stadium information meetings are staged. Five of the six have been held.
The latest session was Wednesday at City Hall, where organized labor and soccer fans attended to support the stadium. Clark County Commissioner Chris Giunchigliani was the sole speaker to oppose the stadium deal. The final stadium meeting is 6:30 p.m. Thursday at the Development Services Center, 333 N. Rancho Drive, Great Basin Room 5th Floor in Tarkanian’s ward.
“Assuming the process advances, the City Council will have final approval of development agreement,” Smith said. “Falling short at this critical juncture would be the equivalent of passing on an opportunity to kick a game-winning penalty kick.”
Contact reporter Alan Snel at firstname.lastname@example.org or 702-387-5273. Follow @BicycleManSnel on Twitter.