Judge refuses to reject arena petition

CARSON CITY — District Judge James Todd Russell refused Tuesday to throw out a petition being circulated by Harrah’s that calls for a sales tax increase to finance the construction of a $500 million sports arena near the Las Vegas Strip.

Russell said Taxpayers for Protection of Nevada Jobs lawyer Scott Scherer did not prove that the petition violated the "single subject rule" that has been used to disqualify most ballot petitions in recent years. The taxpayers group is headed by MGM Resorts International.

Although language explaining the intentions of the petition was not as clear as he would have liked, Russell said it was sufficient for people signing petitions to understand.

Harrah’s and a group called the Arena Initiative Committee need to collect 97,003 signatures by Nov. 9 to have the Legislature consider its proposal next year. They want lawmakers to impose a 0.9 percentage point increase in the sales tax rate within a three-mile radius of the proposed sports arena to cover most of the costs of the project.

They hope to attract a National Basketball Association team and/or a National Hockey League team to the 18,000-seat plus sports arena.

Harrah’s has proposed a 10-acre site, valued at $182 million, behind the Imperial Palace as the arena location.

The petition itself, however, does not specify where the arena would be located. That decision would be made by the Clark County Commission.

Language in the petition, however, would prevent the commission from choosing a site where the land has not been donated for the project, or that falls outside of the heart of the Las Vegas Strip resort corridor.

If lawmakers do not act on the sales tax proposal within 40 days of the beginning of next year’s session, then the issue would be placed before voters on the general election ballot in 2012. Because the petition seeks to change state sales taxes, Deputy Secretary of State Matt Griffin said all Nevada voters would cast ballots, even though the tax would be limited to the three-mile area around the sports arena.

Following the decision, MGM Resorts senior vice president Alan Feldman said his group will decide in coming days whether to appeal to the Supreme Court. Most decisions made by district judges in ballot initiative cases are appealed.

Harrah’s lawyer Todd Bice said the goal of the petition is to have tourists, not locals, pay virtually all the costs of the arena construction.

Scherer contended language in the petition should be changed because it does not tell people the arena would be restricted to Harrah’s site.

"They have hidden the fact it excludes all other sites," said Scherer, noting there have been three other proposals for sports arenas in Las Vegas.

"Harrah’s says it will provide land at no cost," Scherer said. "They have a business reason to provide that land."

He complained that "the lawyer who can draw up the sneakiest language wins."

But Bice contended the petition would not require the sports arena to be built on Harrah’s property. He said there are an "infinite number" of sites along the Strip where the arena could be built, although some would require "knocking down buildings."

Although the petition would require donated property for the arena site, Bice said that language was inserted because many entrepreneurs suddenly will want to build the arena if it is publicly financed.

"If you aren’t willing to put skin in the game, you don’t get tax dollars," he added.

Russell’s only beef with the petition language was it did not define what the meaning of a "Gaming Enterprise District" where the arena could be build.

Bice said state law limits descriptions of the effects of petitions to 200 words.

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.