Henderson arena dispute may take ‘a long time to resolve’

Henderson Mayor Andy Hafen said he is confident "that the city will come out on top" in its dispute with the developer of a major sports arena near the M Resort.

"I'm sure it's going to take a long time to resolve this," Hafen said Friday in a telephone interview from Boston, where he is attending the National League of Cities' annual conference.

Developer Chris Milam notified Henderson officials this week that Las Vegas National Sports Center LLC was terminating the project agreement. In his letter, Milam said the city-backed project "is not viable," but he also said the company is "fully committed to achieving development of the arena complex."

Milam hasn't come forward to explain what that means. On Thursday, Henderson City Attorney Josh Reid accused Milam of making "fraudulent representations" and asked the Bureau of Land Management not to transfer the 480-acre property to Milam's Silver State Land LLC. Reid also expressed his concern that Milam has been marketing the land for residential development.

In June, Silver State was the winning bidder in an auction of the BLM land. The $10.5 million bid came with a $2.1 million certified check, and the BLM received payment for the balance on Wednesday, the same day Milam sent his letter to the city.

"It appears that he tried to close on the land and terminate the agreement simultaneously," Hafen said.

Milam had promised to break ground by year's end, assuming he finalized a loan for $650 million from a Chinese company. He had said the first phase of the project would consist of a 17,500-seat arena.

BLM spokeswoman Hillerie Patton said the agency has received Reid's letter asking it to halt the land transfer but has not responded. "This is not something we've really dealt with. That's why we definitely need to get everything all figured out."

Hafen said he hopes the matter will not land in court but added, "We'll do whatever we have to do to protect the city's interest."

Milam has proposed other stadium or arena projects in Las Vegas, but none has come to fruition.

On Wednesday, the Nevada Supreme Court upheld a $1.1 million judgment against him in connection with an unrelated failed business deal with former Hard Rock Hotel owner Peter Morton.

In that case, Milam was accused of lying to business partners about the source of his stake in a proposed $1.2 billion condominium project.

Hafen and other members of the Henderson City Council said they do not regret entering into an agreement with Milam despite recent developments.

"We knew the history going into this, and we just knew that we needed to have all of our i's dotted and t's crossed," the mayor said. "I know that's a cliche. We just knew we needed to have the city protected in all respects."

Hafen said city officials would not have entered into the agreement if they did not think the project was viable.

"There's still a lot of questions that need to be answered and a lot of work that needs to be done," the mayor said.

Councilman John Marz, who was appointed in January, said he believes members of the council "made the correct decisions at the time based on all of the information that was presented to them."

Marz was on the Henderson Planning Commission when the arena project was approved. "I was in support of it on the Planning Commission based on the same information," he said.

Both Hafen and Marz said they now are less certain of what comes next.

"The future of that piece of land is pretty well up in the air right now," Marz said.

On Monday, Reid sent Milam a letter asking him to stop marketing the land for residential development.

Reid indicated he had received marketing material obtained by another developer that said, "If the arena or stadium are not developed, additional mixed-use and residential will be developed."

According to the letter, the material contradicted statements, made by Milam's representatives to City Council members, that the property was not being marketed for purposes other than an arena.

"I'm not sure what his goal is at this time," said Councilwoman Debra March, who represents the area where the stadium would be located.

March said she is not worried about the city losing control of the land.

"We certainly control all of the entitlements, and nothing can happen on that site unless they have the necessary approvals," she said.

She said the council has no interest in having a residential project on the site because it would compete with the nearby Inspirada housing project, which has emerged from bankruptcy.

March said a sports arena has the potential to create many jobs and help diversify the economy.

"Nothing's been provided to me to demonstrate that the project is not viable at this time," she said.

Councilman Sam Bateman, a lawyer, said the city has spent no taxpayer money on the arena deal.

"I'm comfortable at this point that our citizens haven't been taken advantage of," he said.

Bateman said he has not talked with Milam and does not know what he is thinking.

"It's hard to say what we're going to do based upon a two-paragraph letter at this point," the councilman said.

Hafen repeatedly has said that none of the city's money will be used for the project.

"It will be all developer-driven," he reiterated on Friday.

Review-Journal reporter Ben Spillman contribute to this report. Contact reporter Carri Geer Thevenot at cgeer@reviewjournal.com or 702-384-8710.