New downtown plan tied to new city hall

A company that might build a sports arena in downtown Las Vegas is a more serious contender than a previous would-be developer, but the project is still linked to building a new city hall, Mayor Oscar Goodman said Thursday.

It's a restatement of one of Goodman's themes: Building a new city hall would spark a wave of development downtown, which in turn would bring jobs, businesses and enough revenue to pay for the new city hall.

The idea has its detractors, and even supporters on the Las Vegas City Council have acknowledged that the city hall proposal exposes the city to risk.

Next week, the Las Vegas City Council is expected to approve an agreement with The Cordish Companies, which will study whether building a 20,000-seat arena, an entertainment district and a hotel-casino makes sense on roughly 19 acres the city owns around the intersection of Las Vegas Boulevard and Stewart Avenue.

"If this site isn't vacant, then I don't think there's a deal," Goodman said of any eventual plans to build the project.

Cordish is a Baltimore-based developer with retail-entertainment projects and casinos across the country. That sets them apart from the backers of a previous arena proposal, REI Neon, which did a good job assembling land for a project but couldn't make it viable, Goodman said.

"I don't think they'd be wasting the time unless they were very, very serious," he said of Cordish. "They don't have time to play games."

They have two years to study the arena project's feasibility, a period that can be extended by a year if necessary.

Meanwhile, the council expects to vote on the next steps in building a new city hall before the end of the year.

The project hit a snag over the summer when officials sought financing for the new building and couldn't get a low enough interest rate to make the project affordable.

Since then, a new program called Build America Bonds has started. It subsidizes the borrowing costs for local governments, making capital projects less expensive.

Las Vegas plans to use "certificates of participation" for the new city hall. It's similar to bond financing but carries a higher interest rate because there is no specific source of revenue pledged to repay the debt.

According to an analysis by the city, building a new city hall would require borrowing $205 million. Payments would start four years later at $974,000 the first year, $1.9 million annually for the next three years and eventually adjusting to $15.7 million yearly payments.

The city could refinance the debt after 10 years.

That's where the risk comes in. The expectation is that at least one of several planned projects, including the reopening of the Lady Luck, the completion of new office towers or an arena with a hotel-casino, will be done in time for the new revenue to carry that debt load.

Contact reporter Alan Choate at achoate@reviewjournal.com or 702-229-6435.