Justices order changes in Strip arena tax measure

CARSON CITY - Wording in a sports arena tax measure must be changed before the proposal can be placed on the November ballot, the Nevada Supreme Court has decided.

But Jason Woodbury, lawyer for the Arena Initiative Committee, connected to Caesars Entertainment, said the decision announced Wednesday did not keep the proposal off the ballot or require that the petition be circulated again.

His committee will seek clarification of the decision , but Woodbury said voters statewide still will decide whether to approve a 0.9 percentage-point sales tax increase within a three-mile radius of the Strip to raise funds to build the $500 million arena near the Imperial Palace.

In the decision, justices said the petition's 200-word description - circulated by Harrah's in 2010 - did not properly tell signers that if voters approve the tax, then the arena could be constructed only on land owned by Harrah's, now part of Caesars Entertainment.

"Because it fails to reveal the ramifications to the competing arena proposals and fails to inform voters of the precise location of the proposed arena, we conclude the initiative's description of effect is deceptive and materially misleading," they said in the 7-0 decision.

Several other arena proposals were being considered by the Clark County Commission at the time the petition was circulated. It was signed by 97,000 voters.

Gary Thompson, a spokesman for Caesa rs, said his company is reviewing the decision and declined comment.

The Supreme Court referred the case back to District Judge James T. Russell of Carson City. His fellow judge, James Wilson, earlier had ruled the petition could be placed before voters.

In anticipation of the petition appearing on the November ballot, legislators prepared an alternative ballot question last year that asks voters whether they oppose having a different sales tax rate in part of Clark County. If voters support their question over Caesars' plan to levy a sales tax increase on or near the Strip, then the arena tax plan would be dead.

The Supreme Court directed Russell, or Wilson if he is assigned to the case, to make a new decision consistent with its findings. The judges were ordered to clarify in the description of effect that the arena could be constructed only on Caesars property.

When judges, including Wilson, have changed such descriptions in the past, they have required the petition to be circulated again. State law requires petitions to be circulated again even if only one word is changed.

While aware of that law, Woodbury said the "court interprets the law." The court placed a footnote at the end of the petition that said an effort by an opposing group to remove the petition from the ballot was denied.

Stacey Escalante, a representative for Nevadans Against Special Taxation, said the decision is a victory for her group and taxpayers. She said that under the law, petition signatures are invalid if the description of effect is changed.

Woodbury will offer Russell suggestions on how to change the description of effect language.

He said the judge could require the entire new description of effect to be placed in the November ballot question. So could Secretary of State Ross Miller, who prepares language for ballot questions, he said.

"It is up in the air now whether they include it all (the new description of effect) on the ballot," Woodbury said.

The plan by Caesars has been to use the tax revenue to build an 18,000- to 20,000-seat arena to attract a National Basketball Association or National Hockey League team to Las Vegas.

Caesars has proposed to donate a 10-acre site behind the Imperial Palace that is valued at $182 million for the arena.

Under language of the initiative petition, the Clark County Commission would have to choose a donated Strip location for the arena in unincorporated areas of the county if it wanted to use the sales tax money.

Lawyers for MGM, which opposes the Caesars plan and created a group called Taxpayers for the Protection of Nevada Jobs, had argued the petition language would require the County Commission to take the site near the Imperial Palace even if it believed there are better locations for the arena.

All but three of Nevada's 63 legislators approved the competing question in June. Gov. Brian Sandoval signed the bill.